Kerry-based CNG Travel Group warned today its results for 2005 will be below expectations.
In a trading update, the group said it has also undertaken a strategic review of the business and this has resulted in the decision to exit the consumer leisure sector.
CNG said it has been focusing on the Tzell and Travel Lodging Connector (TLC) core businesses.
Though good progress has been made in integrating the Places to Stay brand the company said it will now seek to dispose of that business along with the other assets in the B2C [business to customer] Leisure Division.
Tzell, the group's travel business in the United States, continues to perform well and broadly in line with market expectations, the board said. It said it sees scope for further expansion and this strategy is on track and will continue.
TLC usage was strong during 2004, but the group said conversion rates to CNG's private hotel stock are still lower than expected. Although bookings through TLC are running at about $1 million per day, conversion to the group's hotel inventory is being adversely affected by strong increases in US hotel occupancy rates.
CNG said this has led to a reduction in the number of room rates available to intermediaries.
The group said it is cautiously confident that the second half of the year will see an improvement in TLC's financial performance to a break even run rate by the year end.
The longer term profit picture for TLC remains positive, it added.