Real Hotel Group in crisis talks with lenders as sales slump

The Real Hotel Group, operator of budget hotel chain Purple, has entered crisis talks with its bankers after issuing its second profit warning in four days.

The Real Hotel Group (RHG) revealed a 34% slump in revenues during the first week of January from continuing operations, mainly as a result of a reduction in occupancy and related food sales.

In a statement the hotel group said: "As a result, the group is actively considering its financial position and is in discussions with its bankers which are expected to be concluded shortly.

"Should these discussions not be successful, the group will be forced to consider all options open to it."

RHG has issued a series of profit warnings, and last week reported a 7% decline in continuing revenues to £63m in the year to 1 January. The company added that the fall had accelerated to 20% in the last 13 weeks.

The group exited London last year, selling three hotels in the capital to Whitbread's Premier Inn chain for £18.5m.

According to The Times, Whitbread is tipped to acquire the 11 remaining Purple hotels in the event of he company's collapse into administration.

RHG launched the Purple brand in December 2007 after ending its UK master franchise agreement with Choice Hotels International, the US owner of the Sleep Inn and Comfort Inn brands.

Last month Folio Hotels was placed into administration, although it has now emerged, and Niche Hotels had two of its properties placed into administration before Christmas.

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By Gemma Sharkey

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