DEREK QUINLAN’S luxury hotels in London slipped into the red last year, reporting an after-tax loss of £9.3 million (€10.4 million) in the year to the end of June 2008.

This compares with a profit of just under £8 million recorded in 2007 by the five-star Connaught, Claridge’s and Berkeley hotels.

Accounts for Coroin Ltd, just filed with the Companies Office in the UK, indicate that the turnaround was due to a drop in turnover, increased sales and administration costs, a hike in interest payments and a large tax charge.

“The group’s focus in 2009 is on the continual enhancement of its property portfolio,” the directors’ report states, adding that planning approval was received in late 2007 to increase the size of both Claridge’s and the Berkeley. “The directors believe that the worldwide economic conditions will impact trading . . . but that the hotels are well placed to address the situation,” the directors added.

Coroin’s turnover fell by 0.3 per cent to £93.9 million. Its room occupancy rate was 83.8 per cent, down from 84.9 per cent in 2007. Revenue per available room rose by 11.1 per cent to £361.

The hotel group spent £2 million retaining a significant majority of key operating staff in the Connaught Hotel.

“Key performance indicators experienced by the Connaught since reopening support the view that the newly refurbished hotel will trade in the future at levels above that previously experienced,” the accounts state.

Coroin’s interest bill weighed on its bottom line. Interest payments rose to £38.7 million last year from £34.1 million in the previous 12-month period. Net debt increased to £572.3 million from £486.9 million. The debt is due to be repaid on December 31st, 2010.

Coroin took a £1.4 million tax charge during the financial year, compared with a tax credit of £7 million in the previous period.

Coroins directors include Mr Quinlan, Davy boss Kyran McLaughlin and Irish property developer Paddy McKillen. Riverdance promoters Moya Doherty and John McColgan stepped down in July 2008 after selling out to other shareholders in the group.