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Cliveden, the fledgling luxury hotels group, has returned to its roots with the pounds 8.5m acquisition of the Royal Crescent Hotel in Bath (above) from Queens Moat Houses, writes Magnus Grimond. The hotel was acquired for pounds 187,000 in 1979 by a company controlled by John Tham, John Lewis and James Crathorne, three of the principals behind Cliveden, before being sold for pounds 7.5m in 1987 to Norfolk Capital, the hotel group which Queens Moat acquired in 1990.

Cliveden came to the stock market earlier this year with the aim of developing a chain of exclusive hotels based on the stately home formerly owned by the Astor family. The group said Cliveden had raised room rates by an average of 5.5 per cent to pounds 245 since 1987, compared with just 1.7 per cent to pounds 113m at the Royal Crescent over the past nine years. But it had confidence a "material increase" in room rates could be achieved following a refurbishment to be completed by next autumn. Cliveden's shares were unchanged at 74.5p yesterday.

Photograph: Charlie Varley/SW News