Thistle hunts cash with hotel selloff

By Christina Golding

THISTLE Hotels is hoping to raise about £100m by ridding itself of under-performing and non-core properties, almost one-third of its portfolio.

After the disposal, Thistle will be left with 60 four-star hotels. The group last week revealed a 34% increase in annual pre-tax profits for 1997, to £80.6m, on turnover up by 10% to almost £320m.

Thistle's 30 provincial hotels contributed just 10% to overall gross profits last year.

Room yield increased by 13.7% to £41.72, but improvement is expected in London following the refurbishment of the Royal Horseguards, Charles Dickens and Hendon Hall hotels, where building work hit occupancies and profits last year.

Paul Slattery, analyst for Dresdner Kleinwort Benson, said that by joining the rationalisation trend already set by rivals Whitbread, Bass and Granada, Thistle would be better placed to concentrate on developing a strong brand.

"They should have done it years ago," he said. "It's a trend that has been going on for a decade, with major companies selling hotels that tend to be old, small and often the worst performers."

But Paul Bartrop of property agent Knight Frank described City views as short-sighted.

"The emphasis on branding means some of the hotels just don't fit," he said, "but they may not be bad hotels. If a group has picked up a tranche of hotels, its central sales team will sell more strongly on what fits into the corporate brand. Those that don't fit can get left behind."

l Thistle is poised to name its new chief executive following the abrupt departure in November of Robert Peel, who has since received a £700,000 payoff.