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City Lodge's share price jumped 7% after the group released an operational update.
Monthly occupancies at the group's hotels have grown from 52% in July 2022 to 60% in November 2022 to date. The average occupancy level so far this financial year has been 56.5%, according to a voluntary operational update issued by the group on Monday.
Based on current demand, the City Lodge Hotel group is optimistic that occupancy levels at its hotels in December could exceed 2019 levels. Unlike last December, Covid-19 lockdown measures are no longer in place, and international business and leisure tourists are returning.
Click here for City Lodge's share price and other data
The group's enhanced food and beverage offering has resulted in an almost 200% increase in revenue from this section compared to the prior financial year. The group says travellers now prefer hotels which also offer complete meal offerings under one roof. That is why the group's Town Lodges and Road Lodges now offer lunch and dinner options, in addition to a "value" breakfast.
Completion of renovations at its Courtyard Hotel Waterfall City is due in early December, and the refurbishment of the City Lodge Hotel V&A Waterfront will start in April next year.
"Despite demand being slightly dampened by ongoing load shedding, high inflation and interest rates, and their impact on the economy and disposable income, the outlook continues to look positive as life returns to normal and businesses and people embrace the freedom to take every opportunity to travel," states the group in its update.
The group has increased its room rates by 9.5% compared to the previous year, which brought it back to 2019 levels.
The group says it is generating positive cash flows. while it has a positive bank balance of R226 million, it has debt of R300 million.
City Lodge's share price has lost 5% of its value this year.
