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

The Leeds-based group, which has a hotel in Brighton, 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 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 expected revenue per available room 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 hotel group and has 22 of its 56 managed or leased UK sites in the capital.

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

Revenue per room tumbled 14.3 per cent to £55.39 as the group introduced more discounts to attract customers.

Occupancy levels in the capital dropped 5.3 per cent with revenue per room down 15.5 per cent to £54.32.

In the regions, occupancy held at 66 per cent with revenue 2.3 per cent lower at £37.06.

Thistle sold 37 hotels to venture capital operation Gamma Four in March to raise £600 million to pay off debts and cope with the downturn.

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

The group now has cash balances of £364.1 million.

Mr Burke said this was a considerable strength in the current climate.

He said: "The key focus is an operational one in terms of improving profits, seeking to stem the revenue decline and keeping a lid on costs."