Janet Parker

Leisure Industries Editor

CITY Lodge Hotels is well on its way to introducing significant black shareholding to the company — empowerment shareholding that will exceed the Tourism Black Economic Empowerment Charter’s 2009 target of 21%.

The group said last week that it had made “considerable progress” towards introducing a 15% direct black shareholding in the ordinary share capital of City Lodge Hotels. “By excluding mandated investments, as defined in the trade and industry department’s draft amended codes of good practice on black economic empowerment, from the company’s existing shareholding structure, it is envisaged that the transaction will result in City Lodge achieving effective direct black shareholdings in excess of the 2009 target requirement of 21%,” the group said on Friday.

While announcing its preliminary results in August, the group said it intended to introduce a black economic empowerment component to its shareholding structure. More recently it said its empowerment initiative aimed to embrace the principles of broad-based black economic empowerment ownership, as envisaged by the department's codes and the requirements of the tourism charter.

“City Lodge recognises the importance of its role in the transformation of the tourism and hospitality sector and its own bee transaction will involve a strategic black partner, a staff component and a community service grouping,” it said. Another announcement related to the empowerment deal would be made early next year.

Meanwhile, City Lodge chairman Hans Enderle and CE Clifford Ross are confident of achieving satisfactory earnings growth for the 2008 financial year, in part due to hotel occupancies remaining high and new capacity coming on stream.

The buoyant economy and growing demand for value-for-money accommodation saw the group achieve its highest occupancies (82%), during the current financial year.

The group’s performance for its next financial years will be enhanced by contributions from its Road Lodge East London, Town Lodge Roodepoort and the extended Road Lodge Germiston. The beginning of next year will also see two new Road Lodges open (Richards Bay and Centurion). The group’s extension project on existing sites will also feed through to the bottom line.

Writing in the group’s annual report Ross said: “Other sites that meet our strict development criteria are constantly being sought and evaluated to expand the footprint of our four brands across SA. In our view there is still significant growth potential for our brands to grow in line with the growth of the economy and the broadening of economic activity right across the country.”