City Lodge takes off at airports

The Airports Company of South Africa (Acsa) has awarded the City Lodge Hotels group the tender to operate three new hotels at OR Tambo International in Johannesburg and at the Bloemfontein and Port Elizabeth airports. Construction of the City Lodge at OR Tambo will begin in early 2009, and is due to be completed by April 2010. The 305-room, three-star hotel will be the largest in the City Lodge group, and will be built above a major new car park already under construction.

The 68-room Road Lodge in Bloemfontein and the 90-room Road Lodge in Port Elizabeth are set for completion in early 2010.The three hotels will cost R290- million and are subject to long-term land and building lease agreements between City Lodge and Acsa.

Clifford Ross, chief executive of City Lodge Hotels, said the group was not concerned at the current global economic slowdown. “We are confident that the [local] economy still has a lot of growth and we believe we’re going to grow into that growth,” said Ross.

“There is no gearing on our balance sheet and these are long-term projects. Even if the economy is in a bit of a downturn, we want to be ready for the next upswing.”

Ross said City Lodge was confident of long-term growth prospects beyond the 2010 World Cup: “When we make decisions to build hotels they are 20-30 year decisions. It would be great if we could get them operational by 2010 but that’s not why we’re building them.”

The group said its expansion plans were based on strong ongoing demand for quality and affordable hotel accommodation. The series of airport hotels is part of City Lodge’s plan to increase the number of its hotels from 42 to 52 by 2010.

Other players in the South African hotel industry are also enjoying steady growth in demand for accommodation despite the slowdown.

Hotel and gaming group Sun International said in its 2008 annual report that its premier properties — Sun City, Table Bay and Royal Livingstone — benefited from increased foreign demand which translated into higher occupancies and rates in the year to end-June.

In total, occupancies at Sun International’s hotels and resorts improved to 79%, three percentage points ahead of the previous year.

Sun International chief executive David Coutts-Trotter said that, internationally, the group’s occupancies were driven by holidaymakers.

“The split between business and leisure internationally was business 24% and leisure 76% for the year 2006/7, against 26% business, 74% leisure for the 2007/8 period.”

Locally, business guests are growing in number.

“On the local front, the picture reflects 45% business, 55% leisure for 2006/7, against a split of 49% business, 51% leisure for 2007/8,” said Coutts-Trotter.

The Hilton Hotel in Durban is seeing an increase in numbers of visitors from other African countries.

“The Hilton Durban attracts mostly business travellers. Business has also been increasing from the rest of the continent with 1315 visitors in 2007, and in 2008 the number grew to 1500,” said Gerhard Patzer, Hilton Durban general manager.

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