"City Lodge Hotels is no longer in survival mode. After weathering the Covid storm, group occupancy has climbed back above 57%, average daily rates have risen by 10% year on year, and earnings before interest, tax, depreciation, amortisation and restructuring or rent costs (ebitdar) margins are steadily recovering towards their pre-pandemic range. The company has emerged leaner, with a clean balance sheet, a refreshed portfolio of refurbished hotels, and the ability to generate consistent free cash flow.

"Yet despite this progress, the market continues to value City Lodge at just four times ebitdar and about 1.2 times revenue — a valuation more fitting for a distressed asset than a revitalised hospitality group with national reach and strong brand equity. While global peers trade at multiples of six to nine for similar economic profiles, City Lodge appears frozen in a post-Covid shadow that no longer reflects its fundamentals. The story has changed, but the valuation hasn’t."

Read the full article here: https://www.businesslive.co.za/fm/money-and-investing/2025-09-04-leaner-leaner-city-lodge-gets-th-booking/