City Lodge Two Rivers is among hotels up for sale as South African hospitality firm City Lodge Hotel Group looks to exit the East African market.
Fairview Hotel in Nairobi, Town Lodge and City Lodge Hotel in Dar es Salaam, Tanzania are also up for sale.
In an update shared on the Johannesburg Stock Exchange (JSE) where it is listed, the group disclosed that it had received an offer from a buyer interested in the four hotels.
“Shareholders are advised that following receipt of an unsolicited non-binding offer for the proposed acquisition of City Lodge’s East African operations, comprising of its hotels situated in Kenya and Tanzania, the company has entered into negotiations which, if successfully concluded, may have a material effect on the price of the Company’s securities,” the firm disclosed.
It described bookings at City Lodge Two Rivers, located in the upmarket Two Rivers Mall in Nairobi as below expectations.
Bookings at the Tanzanian unit were deemed sluggish, leaving only Fairview Nairobi with a strong performance.
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The four hotels have a combined 320 rooms. City Lodge Group did not disclose details of the interested buyer or the price they would be looking to get for the assets.
The exit from East Africa will see the firm focus on its operations in Southern Africa. The group runs hospitality ventures in South Africa, Botswana, Namibia and Mozambique.
The potential sale comes at a time when the hospitality industry has been reeling from the shocks of the pandemic.
Restrictions in global travel and operating hours of bars and restaurants saw occupancy rates shrink at hotels around the globe.
City Lodge Hotel Group was not spared, with average occupancy rates declining to 38 per cent in the 12 months to end of June, compared to 55 per cent in the previous financial year.
It recorded a loss of R486.6 million (Ksh3.64 billion), it’s first loss in more than seven years.
“The 2020 financial year was our most challenging operating year in the group’s 35-year history, mainly due to the lockdown protocols implemented by the South African government, and similar restrictions in the rest of Africa countries in which the group operates,” noted Chairman Bulelani Ngcuka.
The Group acquired Fairview Hotel in 2012, before opening City Lodge Two Rivers at the Two Rivers Mall in Runda in early 2018. It ventured into neighboring Tanzania in December 2018 with City Lodge Dar Es Salaam.
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