City Lodge Hotels posts 12% revenue jump to US$60M as occupancy hits post-COVID high

SOUTH AFRICA – City Lodge Hotels has delivered a robust set of interim results for the six months ended 31 December 2025, with group occupancy climbing 4.2 percentage points to 61.6%, the highest level since before the pandemic.

Revenue rose 12% to R1.14 billion (approx. US$60.1 million) , while cash generated by operations surged 39%, enabling the group to repurchase 6% of its issued shares and reward shareholders with a 33% dividend increase.

Occupancy and Rates: A Winning Combination

Average room rates increased 4%, beating inflation and contributing to a 10% jump in rooms revenue to R898.5 million (approx. US$47.3 million). CEO Andrew Widegger credited “improved economic trends in South Africa and B20 and G20 tailwinds” for driving the occupancy gains.

All regions benefitted, with Gauteng, KwaZulu-Natal, and Eastern Cape leading the charge. Food and beverage revenue grew even faster, up 17% to R233.9 million (approx. US$12.3 million), now accounting for 20.5% of total revenue thanks to freshly refreshed menus and restaurant concepts.

Cost Discipline Delivers Margin Expansion

CFO Dhanisha Nathoo emphasized the group’s focus on cost containment, with total operating costs rising only 9% despite higher occupancies. Operating cost per room sold increased by just 3%.

This discipline delivered Adjusted EBITDAR of R371 million (approx. US$19.5 million), up 16.3%, with margins expanding 1.3 percentage points to 32.5%. Adjusted headline earnings jumped 27% to R139 million (approx. US$7.3 million).

Resilience Initiatives Mitigate Utility Pressures

The group successfully navigated average 13% utility price increases through strategic sustainability investments.

Solar power now operates at 41 hotels, while borehole and filtration systems supply water at 14 properties, keeping property cost increases to just 6%.

Portfolio Optimization and Shareholder Returns

The group repurchased and cancelled 36 million shares (6% of issued shares) for total consideration of R144.9 million (approx. US$7.6 million.

It also optimized its portfolio, closing loss-making Courtyard Hotel Arcadia in December 2025, sold for R37.3 million (approx. US$2.0 million).

City Lodge Hotel Newtown will close on 31 March 2026.

Refurbishments Drive F&B Growth

Five major refurbishment projects were completed, including bedroom upgrades at key hotels and complete revamps of restaurants at Umhlanga Ridge and V&A Waterfront.

These bespoke concepts contributed to the 17% F&B revenue growth and improved gross profit margins to 61.5%.

Regional Performance and Outlook

Within SADC, Mozambique and Namibia “beat expectations” with strong trading improvements, while Botswana shows signs of recovery.

With occupancy reaching pre-pandemic levels and margins expanding, City Lodge Hotels has clearly moved from stabilization to momentum.

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