Queens Moat Houses (QMH), which made a £3.7m loss last year, is hoping to pull itself out of the doldrums by extending its Holiday Inn branding to more hotels in Germany.
The group has extended an existing agreement with franchisor Six Continents, through which it already has two hotels in the UK, two in the Netherlands and 11 in Germany under the Holiday Inn badge. Under the new agreement, a further 10 hotels will be rebranded.
Development director Stuart Metcalfe said that Six Continents' ultimate fate, be it a demerger or a takeover, would not affect its agreement. Other Six Continents franchisees have voiced concern about a potential takeover.
"Regardless of the outcome, securing the Holiday Inn brand in Germany is key, and we're confident it will add value," said Metcalfe.
QMH saw turnover tumble by 3.1% from £334.9m to £324.4m in the year ended December 2002. It blamed fixed-cost increases, such as insurance and business rates, as a major contributor to its £3.7m loss. In the previous year QMH made a pre-tax profit of £3.5m.
The group's 33 UK hotels achieved a "satisfactory" performance, with occupancy of 73.3% for the year, up by 0.9 percentage points. But average room rate fell by 3.5% to £57.23, resulting in a like-for-like shortfall in yield of 2.4% to £41.94.