At the Annual General Meeting today, David Newbigging, Chairman, made the following comments in relation to current trading.

“Following the disposal of 37 Regional and London hotel businesses on 4 April 2002 and the retention of management contracts to manage these hotels for 30 years, Thistle`s portfolio currently comprises 18 owned or leased hotels and 38 managed hotels.

Over the first 20 weeks of the current financial year turnover for the 18 owned or leased hotels was £53.9 million, 14.0% lower than last year. Revenue per available room (“Revpar”) for these hotels fell 14.4% to £52.46. Occupancy, at 70.3%, held up well compared with 72.3% in the comparable period last year but the average room rate was 12.0% lower than last year. Thistle`s portfolio of owned or leased hotels are predominately London based, a market which remains particularly affected by reduced international visitor numbers. Weakness in the business traveller segment has resulted in lower average room rates.

Over the same period, turnover for the 38 managed hotels was £50.6 million, 3.2% lower than last year. Revenue per available room for these managed hotels declined by 4.8% to £37.42. 37 of these hotels were owned or leased by Thistle for approximately 14 weeks of the current financial year. These managed hotels are predominantly Regional hotels, which have a stronger domestic clientele and they have performed better than the London hotels.

The outlook for international travel continues to be uncertain. We are confident about growth in occupancy compared to last year over the balance of this year and we expect some increase in room rate which will be reflected in an improving Revpar. The improved asset quality and strong balance sheet is a good platform going forward and for preparing the business for an upturn in the London market in particular. Our focus continues to be on managing the business efficiently and improving operational cash flow while seeking opportunities to improve the return on shareholders` equity.”

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