City Lodge Hotels releases Integrated Report 2024

CEO Andrew Widegger dives deep into the year’s highlights and what’s next for the group.

Andrew Widegger, CEO at City Lodge Hotels

Q: What stands out when reflecting on the 2024 financial year?

A: What truly stood out this year was how our deliberate focus on reinvestment translated into tangible benefits for our guests, employees, and the broader business. In a challenging macroeconomic environment, characterised by high inflation and subdued corporate travel, we demonstrated resilience by growing revenue by 13% and increasing occupancy by two percentage points to 58%. Our food and beverage revenue also saw a notable 22% increase. Additionally, our BAR pricing strategy continues to optimise rates effectively, delivering value to our guests. Beyond these encouraging numbers, what sets this year apart is the way we invested in both our people and properties, strengthening our foundation. These efforts have not only made life easier for our guests and teams but have also reinforced the long-term sustainability of the business.

Q: Can you talk us through some of the strategic highlights from the year?

A: One of the key highlights has been our strategic reinvestment across several fronts. From completing phase two of our solar installations, where 41 hotels now benefit from renewable energy to enhancing our food and beverage offerings, these initiatives reflect our commitment to sustainability and guest satisfaction. We also completed significant refurbishments, ensuring that our properties not only meet but exceed guest expectations. This ties back to our philosophy of investing in ourselves so our guests, staff, and organisation can experience a smoother, more comfortable journey.

Q: What were your main challenges, and how did the business adapt?

A: We began the year with strong demand, with occupancy rates approximately eight percentage points ahead of the prior year in the first quarter. However, prolonged high inflation, rising interest rates, and continuous load shedding, combined with political uncertainty ahead of the South African national elections, started to weigh heavily on corporate demand and consumer purchasing power. Government austerity measures imposed by the National Treasury in October further dampened demand. While the Western Cape saw the fastest recovery in occupancy and rates, areas like KwaZulu-Natal faced challenges, including the sporadic closure of beaches, the departure of many Durban beachfront businesses, and safety and security concerns. Despite these headwinds, we adapted by focusing on operational efficiencies, particularly in energy management, through expanded solar power initiatives and continued investment in our properties. These actions helped us maintain competitive occupancy levels and grow our food and beverage revenue.

Q: How has the check into easy ethos contributed to the group's success this year?

A: The check into easy positioning has helped us strengthen our brand in a fresh and engaging way. The updated visual identity and the fun, quirky personality we’ve embraced have resonated well with guests and staff. It’s allowed us to stay competitive and create a more memorable and enjoyable experience for our guests. One of the highlights has been our ‘Bedtime Stories for Business People’ initiative. It’s a simple yet innovative way to help our guests relax, and the feedback has been fantastic. Receiving recognition through several awards has reinforced that we’re on the right track with our marketing efforts. These initiatives have enhanced our brand’s presence, helped us connect more deeply with our audience, and contributed to improved occupancy rates. They show that when you focus on delivering a great guest experience, the results naturally follow.

Q: How are you positioning the business for the future?

A: We’re positioning ourselves for future growth by continuing to invest in technology and sustainability. We’re exploring new energy storage solutions, to complement our solar installations, building water resilience through borehole, filtration and water storage installations, and have authorised capital commitments of R459.4m for the 2025 financial year, focused on hotel modernisation and technology investments, including a reengineered loyalty programme. We’re also pursuing expansion opportunities in high-growth areas in South Africa, further strengthening our footprint and delivering long-term value to our shareholders.

Q: Would you like to acknowledge any contributions to this year's journey?

A: Absolutely. Our shareholders have once again shown tremendous faith in our strategy, and I am deeply grateful for their continued support. I also want to acknowledge our staff, who have delivered exceptional service no matter what challenges they may face. Their commitment to our check into easy ethos has been vital in maintaining our high guest satisfaction levels, even as we’ve navigated difficult operating conditions. Lastly, I want to thank our guests for their loyalty and trust in choosing us as their home away from home.