City Lodge Gains East African Foothold

The City Lodge Hotels group has reached an agreement with the shareholders of Fairview Hotel Limited to acquire a 50% stake in that company, which owns and operates two hotels in the Upper Hill area of Kenya’s capital city, Nairobi. The two hotels are the 120-room Fairview Hotel, an established hotel in Nairobi, and the adjacent 84-room Country Lodge. The company is owned by the Szlapak and Abbema families and is a third generation family business.
The transaction is effective from 1 June 2012, but remains subject to regulatory approvals in Kenya and the South African Reserve Bank’s approval. City Lodge has also formed a joint venture to explore further expansion opportunities in East Africa together with Mark Abbema and Daniel Szlapak, who will be joint CEOs of this operation.

The initial focus will be on identifying potential sites for development in Kenya, Tanzania, Rwanda and Uganda. While the Fairview Hotel will retain its name, Country Lodge will be rebranded to Town Lodge, in line with City Lodge’s intention to increase the penetration of its brand names in other parts of Africa. City Lodge’s entrance into the Kenyan market is its second expansion outside of South Africa, following its announcement earlier this year that it was developing a 106-room Town Lodge in Gaborone, the capital city of Botswana. This hotel is on track for completion in December.

 Currently, the group has 52 hotels in South Africa offering 6,440 rooms across the Courtyard, City Lodge, Town Lodge and Road Lodge brands. Its hotel under development in Gaborone and its stakes in the two Nairobi hotels will take its portfolio to 55 hotels with 6,750 rooms under management.

First Foray into Rest of Africa for City Lodge

 The City Lodge Hotels group has announced its first foray into the rest of Africa, through the development of a 106-room Town Lodge in Gaborone, Botswana.

 It is expected that the hotel – which is based on a land and building lease agreement – will open in December 2012, at a total development cost of around R61 million. Earthworks have already begun on the project.

 The City Lodge group has been investigating African expansion opportunities for several years, but this is its first announcement that a new hotel will be built outside of its South African base, where it already has 52 hotels offering 6,440 rooms across the Courtyard, City Lodge, Town Lodge and Road Lodge brands. Town Lodge is essentially the group’s 2-star brand.

 The group is continuing to analyse opportunities that exist in several Southern African Development Community (SADC) countries and is also looking into possibilities for its brands in East and West Africa.