Choice Hotels Europe has returned to profit after five years of losses.

In its preliminary results for the year to 31 December 2004, parent company CHE Group reported pre-tax profits of £0.6m, compared with a loss of £1.9m in 2003.

Operating profit more than tripled to £3.8m.

Chief executive David Cook said: “After three years of having to dispose of assets, reduce our debt burden and stabilise the group, it is very pleasing to be able to talk about product enhancement and development once again.”

During 2004 occupancy grew by 1.5 per cent and average room rate by almost £1 to £38.93.

By this summer, 24 of the group’s hotels will have undergone refurbishment while a rollout programme for the Sleep Inn brand has already begun. The Sleep Inn Tewkesbury opened last month and the Sleep Inn Derby is currently under construction.