THISTLE Hotels hailed the strength of its regional operations as it signalled an upturn in fortunes could be around the corner.

The Leeds group, which manages hotels in Newcastle and Middlesbrough, said a growth in short breaks across the UK had helped it offset some of the fall in overseas visitors to London.

Turnover was down just seven per cent in the six weeks to August 25, against a 13.6 per cent drop in the first half of the year.

Chief executive Ian Burke said he now expected revenue per available room (revpar) to move ahead of last year's levels in the coming months.

He said: "We have seen a certain improvement in the rate of recovery although we are not in positive territory yet. In London, we have been hit by the decline in international business, but in the regions we have seen a much more robust performance."

Thistle is London's largest hotelier and has 22 of its 56 managed or leased UK sites in the capital.

Operating profits tumbled 44 per cent to £27.6m in the six months to July 14 as the sharp drop in US tourists staying in London hit the group.

Revpar fell 14.3 per cent to £55.39 as the group introduced more discounts to attract customers.

Thistle sold 37 hotels to venture capital operation Gamma Four in March, including its operations in Newcastle and Middlesbrough, to raise £600m to pay off debts and cope with the downturn.

Under the terms of the deal, Thistle Hotels (Management) Limited, a subsidiary of Thistle, will sign agreements to manage the hotels for 30 years.

The deal meant bottom-line pre-tax profits rose to £57.9m against £29.4m in the same period a year ago.