City Lodge Hotel Group has published its Integrated Report for 2021 (from July 1, 2020 to June 30, 2021), a grim year for the hospitality industry in South Africa.
The group saw its nett loss deepen in the 2021 period to R804,6m. This was more than double the R355,9m loss in 2020.
Operating costs in 2021 were R507,8m, 43% less than operating costs in 2020.
Over the 2021 year, the group’s room occupancy (over its open hotels) was 26%. In 2020 this figure was 38%.The national hotel room occupancy average over the 2021 year was 28%.
But, the City Lodge Group is not daunted.
The report is themed ‘Getting back to living’, and this, City Lodge says, reflects the direction of the tourism and travel industry, business and leisure. “After the initial shock and uncertainty of early 2020, we quickly pulled together as a group. Teamwork and innovation led the way to embracing the new status quo. While we remain vigilant in the face of each new wave, we have worked hard to keep our doors open and our guests safe and happy,” says the group’s CEO, Andrew Widegger. “We used the quieter time to implement several innovations in enhanced health and safety protocols, exciting new food offerings, digitalisation, environmentally friendly solutions and a range of special offers that allow guests to access our top-of-the-range services for less, such as our WKND Special and #YourPrivateOffice offerings.”
And there is reason for much more optimism among hotels, since the reporting period closed off on June 30. The tourism landscape for South Africa has changed dramatically, with Europe, the US and, most recently, the UK allowing their residents to take holidays in South Africa without the need for quarantine on return. The UK shift is a real game-changer, and the day saw stocks in City Lodge surge to a 52-week high on October 4, along with several competitors. Another boost for all hotels was the announcement by President Ramaphosa on October 1, that COVID restrictions were to be taken down to alert level 1. This made events, weddings and get-togethers more viable.
One of the innovations the group introduced was a Best Available Rate (BAR) initiative, which went live in June 2021, in order to optimise revenue yields. Now, it will leverage analytics and machine learning to inform its pricing decisions, with a new Business Intelligence (BI) tool to help analyse key clients, track new business and personalise offerings for guests, corporate clients and agents. It will also assist in gauging the success of CLHG marketing initiatives.
The group will trial the new BI tool at 25 hotels. It uses machine learning based on historical, environmental and macro- and micro-economic information. “Considering the unusual conditions brought on by the pandemic, the Artificial Intelligence (AI) tool is still learning to understand the operating environment. However, it provides hotel managers with valuable insights into potential peaks or troughs in demand, helping them to determine the BAR,” said the report.
