Hospitality group City Lodge has reported the highest occupancy rates at its hotels since Covid-19, boosted by renewed economic activity and travel, refurbishment of its marquee establishments, and the overhaul of its menu to meet consumer demand.
The company on Thursday reported a 34% surge in cash generated by operations in the six months ended December, while revenue went up 12% in the period under review to R1.14bn.
CEO Andrew Widegger said the company capitalised on improved economic trends in South Africa and B20 and G20 tailwinds to deliver a 4.2% point increase in occupancy to 61.6% over the period.
“Room rates continued to beat inflation, with the average rate increasing by 4%, which had the complementary result of a 10% increase in room revenue. The growth in occupancy, aided by the newly refreshed menus and restaurants in some hotels, has enabled food and beverage revenue to grow by 17% in the six months under review,” Widegger said.
Room rates continued to beat inflation, with the average rate increasing by 4%, which had the complementary result of a 10% increase in room revenue.
— CEO Andrew Widegger
“While consumer and business spending remains constrained, there are distinct green shoots and positive sentiment in the South African economy, aided by the hosting of the B20 and G20 summits last year, which has helped deliver promising GDP growth. As the government of national unity (GNU) moves forward with its agenda, there has been an increase in government spending.”
A rise in occupancy levels was broad-based across provinces in South Africa. However, the brightest spots were Gauteng, KwaZulu-Natal and Eastern Cape.
Within the Southern African Development Community, City Lodge said Mozambique and Namibia’s performance beat expectations, as the hotels achieved strong trading improvement in both room and food and beverage sales.
Early beneficiary of upswing
“Hospitality is an early beneficiary of positive investment activity, and the renewed economic activity across the country over the last six months has delivered the highest occupancy since pre-Covid-19, at 61.6%, which is 4.2% points ahead of the prior period,” City Lodge CFO Dhanisha Nathoo said.
In its 2025 annual report, the company outlined plans for new investment in quality, technology and guest experience, saying this will help it stay relevant in a rapidly changing hospitality market and keep the doors open to travellers choosing between a hotel room, Airbnb and a homestay.
City Lodge operates 58 hotels across Southern Africa.
“The group completed five refurbishment projects during the period under review, which included bedroom refurbishments at City Lodge Hotel Johannesburg Airport, Courtyard Hotel Gqeberha and Courtyard Hotel Sandton,” Widegger said.
“The restaurants and commercial areas at City Lodge Hotel Umhlanga Ridge and City Lodge Hotel V&A Waterfront were completed, and newly branded in-house dining offers, which are bespoke to each hotel, were launched.
“We are also optimising our hotel portfolio with Courtyard Hotel Arcadia permanently closed in December 2025, as the hotel was in the process of being sold for a gross consideration of R37.3m.
“In addition, the City Lodge Hotel Newtown lease will be expiring in May 2026, and the group has opted not to renew the lease. The hotel is scheduled to close on March 31 2026. Both hotels had been loss-making.”
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