CHE cuts its losses, goes for growth

Choice Hotels Europe (CHE) is preparing to expand its chain of Sleep Inns following a reduction in its pre-tax losses.

The group, which last week reported a marginal increase in like-for-like turnover to £75.5m and a £900,000 reduction in pre-tax losses to £1.4m in the 12 months to 31 December 2003, said it was expecting to start construction of the first of six new Sleep Inns within the next few weeks.

CHE added that it was in discussions with a number of developers and was "excited about the prospect of significant growth" over the next few years.

During 2003 CHE also signed its first deals to manage hotels for third-party owners. The group now has seven management contracts in the UK and three on the Continent. It expects to continue to expand the business over the coming years.

The group's UK hotels, which make up 80% of turnover for the company, recorded a 1.8% decline in revenue to £54.8m during the year.

Occupancy across the UK division was down by 1.6 percentage points to 63.5%, with room rate up by 37p to £37.99, leading to a decline in revenue per available room of 1.6% to £24.11.

The group's Continental Europe business, which represents 10% of the total, recorded a 2.5% increase in turnover to £8.1m, while operating profit fell by 27% to £1.3m.