Peel investments pay off

Peel Hotels has reported a 93% profits jump in its second year of trading during what chairman Robert Peel described as a "relatively flat" period for UK hotels.

Pre-tax profits increased to £1.4m on turnover up by 121% to £7.4m in the year ended 20 February. Last year the group bought the Golden Lion hotel in Leeds and the Caledonian hotel in Newcastle. It also invested £1m into its Midland hotel in Bradford and has plans to extend the Bull hotel in Peterborough, giving it an extra 42 rooms. Revenue per available room for the four hotels increased by 9.5%.

The group also manages 22 hotels for Grace Hotels, a subsidiary of investment firm Lehman Brothers. Peel said that he was considering "various options" to extend the contract with Grace Hotels when it expires in October next year.

Peel added that he would like to buy more hotels but that prices were too high.

"I am always looking [at hotels], but while demand is relatively flat and prices are too high, you have to ask if a hotel can give an attractive return. The hotel industry has had six pretty good years, but you can't expect it to go on year in and year out," he said.