City Lodge | Replacing the winter sheets
City Lodge Hotels (CLH) occupancies declined to 59% in FY'18 (FY'17: 63%), its second lowest level since FY'88 (low of 56% in FY'11 following the World Cup oversupply). The current low occupancy levels were due to Cape Town's (c.15% of revenues) Water Crisis, and low business and consumer confidence. The low occupancy levels affected business and leisure travel. Additionally, the African operations faced headwinds in Kenya due to the re-run of elections, coupled with excess hotel supply in Nairobi. We believe the Group is well positioned to benefit from a normalisation of occupancy levels in Cape Town and a gradual improvement in the SA economy. We believe the market is fully pricing in a recovery in occupancies.City Lodge Hotels is a holding company. Through its subsidiaries and joint ventures, Co. is engaged in owning and operating of hotels targeted at the business community and leisure traveller. Co.'s hotel brands include Courtyard, City Lodge, Town Lodge and Road Lodge.
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