Investor/An insider's guide to the market: Jurys Doyle Hotel Group is now the only hotel stock on the Irish market. With a market capitalisation of €770 million, it equates to 1 per cent of the Iseq Overall index and is similar in size to Glanbia, Fyffes, United Drug and Paddy Power.

Jurys share price has risen by 17 per cent over the past year, outperforming the Iseq Overall index by 8 per cent. So far this year, the share price has marked time and is virtually unchanged from its end-December level.

This is somewhat better than the Iseq, which is down approximately 4 per cent year-to-date. However, if the impact of Elan is stripped out, Jurys has modestly underperformed other mid-cap Irish stocks so far this year.

Jurys has moved well beyond its Irish roots, with more than 3,600 bedrooms in the UK and 760 in the US. Ireland, with 2,700 bedrooms throughout the island, remains a core part of the group.

However, over the past two years, international hotels have performed much better than the Irish estate. In the US, Jurys owns four well located and modern properties in Washington DC and Boston. Both cities have been among the strongest US locations for hotel performance this year. The US hotels account for approximately 11 per cent of group profits and are expected to maintain this position.

The UK is a more significant market for Jurys, accounting for just under 60 per cent of operating profit. Occupancy rates in London are at their highest level in four years, reaching 83 per cent last September, according to the Deloitte Benchmark survey. The regions have not seen such a robust upswing, but were not hit as hard by the fall in international travel and tourism post 2001.

Jurys growth strategy in the UK involves the roll-out of the Jurys Inns brand in the mid or budget sector of the market. This sector is growing rapidly and the more modern "value" offering from companies such as Jurys is taking market share away from the more traditional operators.

Jurys has been adding approximately three new inns each year but has the financial flexibility to increase the pace of expansion to four or five new inns per annum. This strong expansion could see the group with 20 inns by 2007.

Jurys has ample room for growth in the UK given its relatively small market share and the fragmented structure of the overall market. Therefore, in the medium term, it is likely that Jurys will continue to focus on securing rapid growth through the roll-out of its inns brand. In the longer term, a move into mainland Europe cannot be ruled out.

Jurys Irish properties offer upside from restructuring and consolidation. The Dublin four- and five-star hotels have underperformed in recent years, largely due to oversupply in the Dublin market. Much of the new capacity has been in this category and it is estimated that, between 1999 and 2003, room capacity rose by more than 50 per cent.

Management at Jurys has started to try to increase the efficiency of its four- and five-star hotels and it is looking at development opportunities at its valuable Irish properties. It is revamping its Cork hotel and is building its new Croke Park hotel. Ireland still accounts for approximately one-third of group profits and still offers scope for significant revenue and profit growth over the medium term.

At its current price, Jurys is trading on a prospective 2005 price-earnings ratio (PER) of 17, which compares with a PER of 16 for the UK hotel sector and 19 for the European hotel sector. It is, therefore, valued more or less in line with its peer group.

Despite this, Investor takes the view that the shares are worth buying at current levels as the mix of organic growth in the UK and restructuring in Ireland should result in above-average earnings growth over the medium term.

Investor is also encouraged by the fact that the company's finance director recently purchased shares. Whilst investment by insiders in a company is not a sure-fire bullish signal, it does signal that management believes that the shares are attractive.