Queens is positioned in the heart of the UK's vast three-star market, which is being squeezed hard by the industry's increasing emphasis on chasing custom through cheap budget lodges in the provinces and high-quality five-star hotels in cities.
The company is also having to grapple with recession- induced low occupancies and price discounting on the Continent. Germany is proving particularly hard, with the problems exacerbated by constructors cashing in on tax breaks and swamping an over-supplied market with new hotels.
Andrew Coppel, chief executive of Queens, acknowledged the difficulties, but remained optimistic that the group's interim pounds 700,000 profit, announced yesterday, was a big step in the right direction, given the pounds 31.6m loss incurred in the same period last year. "We made some useful progress in the first half-year in 1995, particularly as a result of our creditable UK rooms performance," he said.
Analysts' doubts rest mainly on the scope for increasing operating profits, as room occupancy levels were only a shade below the industry average.
Even business travellers, who form around 70 per cent of the company's customers, are posing a problem; on average they are spending less on food and drink in the hotel bars and restaurants, and some restaurants have had to be closed.
The disposal of lower-quality, and mainly smaller, hotels remains a key element of Mr Coppel's strategy to put Queens back on its feet, but repositioning the hotels that remain will be a tough task.Reuse content