The owner of boutique hotel chains Malmaison and Hotel du Vin dropped into the red last year due to a dip consumer spending and higher overheads.
Frasers Hospitality UK Holdings, which runs 34 hotels, fell to a loss of £187,000, compared with a pre-tax profit of £7.3 million in the 16 months prior.
Sales were flat in the year to September, at around £145 million, according to documents filed with Companies House.
The hospitality sector is going through a “sustained period of difficult trading conditions with pressure on sales from increased competition and dwindling consumer confidence resulting in lower overall spend,” said chief executive Guus Bakker.
“Cost pressure continues to come in from increases in raw material costs from exchange rate movements, wage inflation with National Living Wage increases and business property rates with the changes in valuation rules applied by the UK government.”
In the face of these challenges, the group said it remains satisfied with its financial performance, Travel Weekly’s sister title The Caterer reported.
Frasers, which belongs to Singapore-based Frasers Property, bought Malmaison and Hotel du Vin from private equity house KSL in 2015 for £363 million.
Frasers, which employs more than 2,500 staff, said it was still pressing ahead with a four-year programme to revamp all of its rooms after spending £18 million on refurbishments in the year.
Hotel du Vin opened its 19th hotel earlier this month in Stratford-upon-Avon and there are 15 Malmaisons with further properties due to open over the next two years in Bournemouth, Edinburgh and York.