Fairview hotel owner blames travel warning for poor results

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City Lodge said between June and December 2014, total group revenues grew by 20.3 per cent to stand at Sh5 billion, but noted the Kenyan operations did not post strong results.
Despite troubles in the industry City Lodge is still going ahead with its expansion in Kenya and the region.

City Lodge, a South African hotelier, says its Kenyan hotels performed poorly in the second quarter of 2014 due to the travel advisories that have negatively impacted the industry.

The announcement came days after TPS Eastern Africa that owns Serena hotels and other hospitality units issued a profit alert citing Ebola and terror threats amongst other factors.

The listed South Africa hotel chain said between June and December 2014, total group revenues grew by 20.3 per cent to stand at Sh5 billion, but noted the Kenyan operations did not post strong results.

“Total revenue, including the Kenyan operations, which weren’t consolidated in the prior year, rose by 20.3 per cent to South African rand 642.2 million (Sh5 billion). Kenyan occupancies were lower than in the previous year as a result of the perceived Ebola threat and numerous foreign travel advisories in relation to the terror threat in the region,” said City Lodge.

In Kenya, the South African hotel chain operates Fairview Hotel and the Country Lodge, two hotels that were bought for Sh3 billion in a deal concluded in 2014.

TPS Eastern Africa, that owns hotels in the region and trades on the Nairobi Securities Exchange, announced insecurity and Ebola effect will see its net profit for 2014 reduce by more than 25 per cent.

“During the last quarter of 2014, the Ebola epidemic originating from West African countries negatively impacted all African destinations,” said TPS when it issued a profit warning a week ago.

Despite troubles in the industry City Lodge is still going ahead with its expansion in Kenya and the region.

City Lodge is putting up a Sh2 billion three-star hotel at Centum’s Two Rivers mixed development off the Eastern bypass in Runda which will be opened in October 2016.

Ground-breaking for the 169-bedroom hotel is expected to begin by June this year. It is also finalising a deal in Uganda.

“In Kampala, Uganda, a memorandum of understanding— which is subject to finalisation of a financial feasibility study— has been signed for the possible development of a 150-room City Lodge Hotel,” said the firm in a statement.