Long-term planning at private hotel operator Macdonald Hotels has led to short term cost, with a net loss for the year of almost £30m.
Despite turnover increasing 4% and hotel operating profit 9% on a like-for-like basis, capital expenditure of £68m in the year which ended 29 September 2005 walloped profit.
This included the £13m buy of Telecoms House in Manchester.
Although profit before interest was £17.8m in the year, £4.9m relating to the write down in value of the Bear hotel, Woodstock and Kilhey Court hotel near Wigan, combined with bank charges and interest costs of £48m, resulted in a net loss of £29.9m.
Gordon Fraser, MacDonald's finance director, said: "We have invested heavily in developing a portfolio of quality asset with unparalleled upside in our industry, but that enhancement has come at a short-term cost."
MacDonald, which has 65 hotels, will open a 215-bedroom hotel in Manchester and a 275-bedroom hotel in Bristol during 2007.
Fraser said the company was working with financial services company Deloitte on a sale and leaseback deal for 23 of its properties.
By Chris Druce