PEGASUS Hotels of Jamaica’s towering expenses led to a $14.6-million loss in its September quarter reversing the $11.4-million profit made a year earlier.

Its revenues increased a mere one per cent whilst direct expenses jumped 17 per cent to $107.1 million over the review period.

It resulted in gross profit dipping 8.9 per cent to $133.5 million according to financials released this month to the Jamaica Stock Exchange.

Pegasus’ general manager told the Business Observer yesterday that he was not immediately available for comment as he was away and hadn’t seen the results.

However, financials indicate that the hotel recorded negative working capital of $57.8 million up to September as its current liabilities exceeded its current assets. The operations also suffered from a slashing of cashflow and equivalents by half to $60.6 million over the review period.

Pegasus’ challenges include increased competition from The Spanish Court Hotel along with the “continuing global recession” according to its annual report ending March 2010.

During the ensuing financial period the hotel planned to upgrade its luxury suites as well as the hotel’s lobby area. Pegasus in March completed its costly three-year expansion, upgrade and refurbishing of all core rooms which increased the hotel’s fixed assets by 12 per cent to $5.7 billion. The upgrade led the hotel to have a 10-year tax break effective March 2009.

Going forward, Pegasus stated that it expects business traffic to increase and result in higher average rates per room. Pegasus stated in March that the hotel would employ a number of strategies for growth and shareholder value creation including: direct selling activities; offering competitive rate packages; advertising; participating in overseas sales trips, trade shows and tourism promotions; and Internet marketing.