JOHANNESBURG - JSE-listed City Lodge Hotels group aims to be more selective as it further increases its African footprint, following initial disappointments and delays with the group’s R1billion expansion into the continent that was launched in 2015.
City Lodge chief executive-designate Andrew Widdeger said the group had decided to narrow countries.
Widdeger said City Lodge still believed that there were still opportunities for it in South Africa.
Widdeger, who has been the group’s financial director since 1994 and will be taking over from current chief executive Clifford Ross at the beginning of next month, admitted that the group’s expectations for its Africa expansion had been dampened somewhat by some tough experiences it had with contractors and other difficulties.
He said this had led to delays in opening its new hotels in southern and East Africa.
Widdeger said the group currently had four operational hotels in Africa, two in Kenya and one each in Namibia and Botswana.
He said that a third hotel in Kenya, where 104 of the total 170 rooms were currently operating, was scheduled to be in full operation by mid-August this year and that hotels in Dar es Salaam in Tanzania and Mozambique would both open at the end of August.
Widdeger said the opening of its hotel in Dar es Salaam would be about three months late and its new hotel in Nairobi in Kenya was about five months late, while its new hotel in Mozambique was initially scheduled to open in the second quarter of this year.
Once these hotels are open, the group will have a total of 61 hotels, 54 in South Africa and seven in the rest of Africa.
Widdeger said business at the group’s City Lodge in Windhoek in Namibia, which opened in October last year, had been slow and occupancies at its hotels in Kenya had been disrupted by the general elections in that country and were down 60percent in the six months to December.
But Widdeger said that its hotel in Botswana had done better than last year.
He said that there were a lot of territories the group was interested in Africa, including Rwanda, Ethiopia and Zambia, but there were so many new hotels being developed in these countries that they decided against entering that market.
But Widdeger said that Zimbabwe was looking interesting, Kenya was a market the group could explore further and it was looking for a site for a Road Lodge and for further hotels in secondary cities in Kenya. It was still working on something for Uganda and believed there could be further opportunities in Tanzania.
Widdeger said Zimbabwe was “firmly on the radar” and they knew exactly where they wanted to build a hotel in that country.
“We know who owns those sites and we’ve started initiating discussions. The elections are now taking place at the end of July and there is a real opportunity there.
“But it may turn out that the elections are a farce,” he said. “If its favourable, we’re in.”
City Lodge shares declined 2.35percent on the JSE yesterday to close at R144.50.