Checking into easy: City Lodge Hotels execs get paid big bucks for sterling performance
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JSE-listed City Lodge Hotels, a South African-based hotel group with 59 hotel properties across Botswana, Mozambique, Namibia and South Africa, has handsomely rewarded its top executive teams for steering the group through torrid Covid-19 tough times.
Looking at remuneration, chief executive Andrew Widegger was paid R11.2 million, from R6m the prior year, an 86% leap; chief financial officer Dhanisha Nathoo was paid R4.8m, from R2.8m the prior year; and chief operations officer Lindiwe Siddo got paid R4.9m, from R2.9m the prior year.
According to City Lodge Hotels annual report 2023, released last week: “The world is changing rapidly. The impact on South Africans in particular is palpable. The cost of living is skyrocketing, load shedding is a regular affliction, and deteriorating infrastructure often results in an erratic water supply.”
Its strategy is, therefore, to ease the burden.
“By investing in our brands and business, we create a space where guests can truly ’check into easy’,” states the group.
Bulelani Ngcuka, the chairman of City Lodge Hotels, said: “The past year bore witness to City Lodge Hotels’ ability to recover and rebuild. As the direct pandemic-related impacts began to subside, the business responded dynamically, leading to a rebound in revenue.
“Encouragingly, we noticed a significant uplift in foreign tourists visiting South Africa, accompanied by increased domestic business and leisure travel. Our occupancy rates have shown robust growth, surpassing even pre-pandemic levels, a testament to our ability to respond, adapt and thrive.”
However, he said, there were ongoing challenges. Load shedding, infrastructure decay and rising operational costs remained significant business impediments, while geopolitical issues, such as the conflict in Ukraine, added layers of uncertainty to its supply chain. These factors led to increased costs and delayed some of the group’s planned capital investments. To mitigate these risks, the group is proactively enhancing its operations.
In response to energy and water shortages, City Lodge had bolstered its resilience through targeted measures, such as solar and borehole and filtration plant installations, ensuring long-term sustainability.
Given its improved liquidity position and an encouraging outlook, the board had approved and declared an interim dividend of 5 cents and a final dividend of 8 cents per ordinary share (gross)(2022: nil), enhancing shareholder value after a challenging period.
Looking ahead, Ngcuka said that while uncertainty persisted due to the upcoming national elections and their potential impact on tourism, the group was heartened by recent collaborations between the government and organised business, targeting energy, logistics and crime and corruption – crucial areas for economic recovery and stability.
“With the emergence of new demographics interested in tourism and domestic travel, we find ourselves well-positioned to cater to this market through our diversified brand offerings. Our agility in expanding services for the leisure sector, along with improvements aimed at our regular business and leisure travellers, suggests a promising outlook,” he said.
Widegger said the group had the liquidity to make prudent investments in its future, including the expansion of its food and beverage operations, and expanding its team with skilled professionals to elevate its culinary expertise to meet a variety of tastes and needs.
“Additionally, we’re planning significant, unprecedented capital investments in the coming year, including ten major refurbishments, further solar and borehole installations, and investments in marketing and IT. This sets the stage for a sustainable growth trajectory for the company, and enhanced returns for our shareholders,” he said.
Nathoo said the group’s financial position had significantly strengthened compared to the previous year. Debt funding was R300m as at June 30, from R600m the prior year, and cash balances were R328.3m compared to an overdraft of R59.3 million in 2022 at the same date – a nil net debt position.
Diluted headline earnings were 30.3 cents per share, compared to a loss of 8.6c.
“This year marks a significant pivot from preserving value to creating it as we invest in our growth and resilience,” she said.
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