The City Lodge hotel group has grown to offer nearly 6 000 rooms in this country but has lagged behind other large groups in moving into other parts of Africa to take advantage of growing demand.
City Lodge was the first chain in South Africa to keep costs and prices down by offering well-furnished rooms with private bathrooms but serving breakfast only, with no restaurant in the building.
It invested outside this country for the first time just over a year ago when it entered a joint venture with the full-service Fairview Hotel in Nairobi. The investment has paid off. At the end of its first year the venture’s contribution is an equity accounted after-tax profit of R13.6 million.
It has been followed by the opening of a wholly owned Town Lodge in Gaborone, the Botswanan capital.
This week chief executive Clifford Ross said progress was being made in plans for more hotels in Kenya and Ghana while opportunities were being investigated in east Africa and several countries in the Southern African Development Community. The hospitality group aimed at having 10 to 20 hotels in other parts of Africa.
Unlike other large groups that were prepared to take over the management of existing hotels, City Lodge preferred to build and own its facilities. However, it was prepared to enter joint ventures in countries where this was an advantage.
It was also expanding in South Africa to meet forecast growth in both business travel and leisure tourism, Ross said. The acquisition of a site for a 90-room Road Lodge in Pietermaritzburg was expected to be completed in the last quarter of this year, with construction to start soon. The group was also finalising agreements for a 150-room City Lodge hotel at Waterfall City near Midrand, with construction to start this year.
Ross said the upward trend in demand had continued in the first six weeks of City Lodge’s financial year This rise in demand was mainly from business travellers at present, but was forecast to be followed by a growth in tourism from new markets as well as from established source markets in Europe and North America.
Business travel has accounted for most of the group’s success, but in recent years it has catered for an increasing number of leisure travellers.
Until recently it continued to provide only breakfast for guests. Its hotels are normally within walking distance of at least one restaurant that delivers meals to the hotel for guests who want to stay in, but it has begun to offer light evening meals in response to demand.
Ross said the Fairview Hotel in Nairobi contained restaurants and was next door to the largest mall in Kenya, which had several more to choose from. These were also available to guests at a Town Lodge adjoining the Fairview.