City Lodge has reported its strongest occupancy levels since the Covid-19 pandemic, as renewed domestic travel, refurbishment investments and improved economic activity lifted trading performance. The hospitality group recorded a 4.2 percentage point rise in occupancy to 61.6% in the six months to December, marking its highest level since pre-2020 disruptions.
Revenue increased 12% to R1.14 billion over the period, while cash generated from operations climbed 34%, reflecting stronger trading and improved cost control. Average room rates rose 4%, outpacing inflation, and contributed to a 10% increase in room revenue. Food and beverage sales advanced 17%, supported by refreshed menus and upgraded restaurant spaces across key properties.
The rebound aligns with broader industry recovery trends. Data from Statistics South Africa show that tourist accommodation income has been steadily improving since 2022, although still below peak levels in certain segments. The group attributed part of the uplift to increased economic activity linked to international events such as the B20 and G20 summits, which supported business travel demand.
Performance gains were broad-based across provinces, with Gauteng, KwaZulu-Natal and the Eastern Cape emerging as leading contributors. Within the Southern African Development Community region, Mozambique and Namibia exceeded internal expectations, delivering stronger room and food revenue growth.
The company also benefited from portfolio optimisation. Five refurbishment projects were completed during the review period, including upgrades to airport and coastal properties. At the same time, underperforming assets were exited, with Courtyard Hotel Arcadia closed ahead of a planned sale and the Newtown lease set to expire in 2026.
City Lodge operates 58 hotels across Southern Africa and continues to invest in technology and guest experience to remain competitive against alternative accommodation platforms such as Airbnb. According to data from AirDNA, short-term rental supply in major South African metros has grown steadily, intensifying competition in urban markets.
The improved occupancy and cash generation suggest the hospitality sector is recovering alongside gradual economic stabilisation. However, consumer spending remains constrained, and sustained growth will depend on continued travel demand, infrastructure reliability and broader macroeconomic conditions.