City Lodge pins hope on budget speech as occupancy rates fall

City Lodge Newtown, in the central business district of Johannesburg, is one of the company's hotels that is experiencing a dramatic drop in occupancy rates
LOSING BUSINESS: City Lodge Newtown, in the central business district of Johannesburg, is one of the company's hotels that is experiencing a dramatic drop in occupancy rates
Image: SUPPLIED

Hotels group City Lodge said on Thursday that weak consumer confidence continued to weigh on occupancy rates at its SA hotels, adding it hoped the upcoming budget would pave the way for a revitalisation of SA’s economy.

Its profit for the half-year to end December fell 67% to R46.27m, with the company reporting that average occupancies declined four percentage points to 54% in that period.

Total revenue increased 0.2% to R809.3m, with a decrease in SA partially offset by increased revenue in other African countries.

The group had also reported a fall in profit for its year to end-June 2019, citing weak consumer and business confidence, reduced government spending on travel, high unemployment and uncertainty regarding Eskom.

“New catalysts are needed to improve the underperforming SA economy,” the company said.

“It is hoped that the forthcoming national budget announcement, along with efforts to restructure Eskom and other state-owned enterprises, will help revive the economy,” the group said.

In afternoon trade on Thursday, the company’s share price was unchanged at R54.50.

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