Accommodation-only supplier has ditched 42 properties in its first year of trading to target a more upmarket product.

The bed bank, which enters its second year of trading next month, said it withdrew the hotels from its portfolio for not meeting quality standards. More than 85% of its hotels are now four or five-star.

Sales and marketing director Paul Riches said the company would target more exclusive properties in future.

“As we enter our second year we want to cement our position in the marketplace by contracting more exclusive properties,” said Riches. “We will be scaling back in some areas that are unprofitable or troublesome. We want to expand the business in a profitable and sensible manner.”

The business expects to hit its first-year turnover target of £40 million and predicts this will grow to £120 million in three years.

The company was launched in October 2006 by chief executive John Kent with backing from Barclays Ventures, which purchased a significant minority stake in the business in a deal worth £15 million.

Expansion is planned next year in new destinations such as Bulgaria in the short-haul market and the Caribbean in the long-haul market.