Real Hotel Company, a UK-wide low budget hotel chain has been placed in administration as the downturn continues to bite.

The company which is listed on AIM operates around 50 hotels under its purplehotels brand and other brands which it holds under license from Choice Hotels International.

It said yesterday it had called in administrator BDO Stoy Hayward to manage its trading subsidiary after ‘actively exploring all financial and strategic options available to the business in the light of its adverse financial position’. In the first seven days of this year the hotel group revealed a 34% slump in sales and it said the rise in vacancy and poor food sales was due to quiet start to year after a slower return to work by corporate customers after Christmas.

The administrators will conduct a review of the hotel group’s assets.

Dealings in its shares were suspended on the 13th January pending clarification of the company’s financial position.