Refurbishment costs eat into Choice's profits

Choice Hotels Europe's (CHE) refurbishment programme, combined with increasing energy costs has eaten into the company's profits, it said today.

Extensive work at 18 of its properties meant group turnover for the six months to June 2005 fell 1% to £37.2m (2004: £37.6m).

Despite this decline, a fall in occupancy, inflated energy costs and an increase in the national minimum wage, gross operating profit was largely unaffected at £10.8m (2004: £10.9m).

However, the group's food and beverage revenue was 6% lower than last year's and CHE has started a strategic review of its food operation as a result.

CHE's chairman Peter Catesby called the results satisfactory, given the reduction in saleable rooms due to the refurbishment programme.

Catesby said: "The future outlook is good, especially as the London market appears to be recovering from the recent terrorist attacks."

The company operates 59 owned, leased and managed hotels in the UK, France, Germany and Belgium.

Its brands include Comfort Inn, Quality Hotel, Clarion and Sleep Inn.
By Emily Manson

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