Hotel group City Lodge is bracing for tough times ahead, with CEO Clifford Ross saying that trading conditions and occupancies have remained under pressure in the first six weeks of its new financial year. On Wednesday, City Lodge reported a 3.1% slide in normalised headline earnings to R362.2m in the year to end-June, with room occupancies retreating to 63% (66% in 2016). The company’s shares were rattled, dropping more than 4% to R135 in late trade on the JSE. With the local economy moribund, Ross hoped that a catalyst would soon emerge to improve sentiment and provide fresh economic growth impetus to stimulate both business and leisure travel. City Lodge financial director Andrew Widdeger said although trading remained tough, City Lodge’s fortunes could turn quickly.
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