US and British hotels help to keep Jurys profits steady at €22m

A STRONG performance in Britain and America offset a "subdued" environment for four-star hotels in Ireland in the first half of the year, hotel operator Jurys Doyle said yesterday.

The group held pre-tax profits steady at €22 million in the six months to June, while sales increased by 9% to €135m as new hotels got into their stride.

Chief executive Pat McCann said the results were satisfactory and thanked a continuing recovery in London and Washington, coupled with newly-opened Jurys Inns in Glasgow, Newcastle, Leeds and London's Chelsea, for the increase in revenues.

Trading profits from the group's hotels in London surged 29%, while America saw profits rise 30%, excluding currency effects.

The Jurys Inn division, which consists of 15 three-star "budget plus" hotels in Britain and Ireland, delivered a 29% increase in trading profits. The division continued to become more important for the group and now accounts for 47% of operating profits and 37% of turnover, up from 43% of profits and 33% of turnover at the end of last year. Jurys Doyle plans to have 19 inns and 18 hotels by the end of next year.

But the bad news came from the group's home market. While the five-star hotels (Dublin's Westbury and Berkeley Court) held their own and were in line with last year, profits from the four-star hotels tumbled 24%. Mr McCann said there had been little pick-up in corporate and incentive travel business from America, which was a key driver of profitability.

Room occupancy rates held firm, but the group suffered lower yields arising from the need to offer more competitive prices. Mr McCann said the four-star hotels were being squeezed by higher costs.

But he said the group was less reliant on its flagship Irish hotels than it had been five years ago. Ireland now accounts for just 29% of operating profits, while Britain produces 58% and America 13%.

The group plans to close its hotel on Cork's Western Road next February. It will be demolished to make way for a 185-bedroom, 6-floor replacement that will open in late 2006.

The 110 full-time staff will be offered the choice of relocating within the group or taking a redundancy package.

Mr McCann also said no decision had been made on the future of the three-star hotel in Dublin's Montrose. He said the group's other three-star hotel in Glasgow would be sold but only at the right price.

Mr McCann said the new inn planned for London's Heathrow airport would be ready before Christmas. The group will also open a new hotel beside Dublin's Croke Park next year and has signalled the intention to move into central Europe before 2007.

Shareholders will receive an interim dividend of 8.4c per share, 3% more than last year.