Crieff Hydro, the major Scottish hotels group with a chain of eight establishments, toasted a 12% rise in pre-tax profit last year.
Performance across the network of owned and managed hotels was chequered with the Peebles Hydro in the red but the Crieff Hydro Resort achieving a 34% rise in profit before tax.
Chief executive Stephen Leckie said the year to February 28 2015 had been one of transition with the acquisition of the Hydro and Park hotels in the Borders town.
He pledged efforts were being made to turn round their performance, including a significant £1.6 million upgrade.
He added: “We bought these hotels knowing they needed heavy investment in people, training and customer offering in overall quality. I think it will take us five years to turn these businesses round.”
Speaking as chairman of the Scottish Tourism Alliance, he added: “Trading is difficult across the country.
“The depression in the North Sea oil and gas industry has thumped the conference market and the low value of the euro against sterling has made this a challenging time for our hotel industry.”
The Peebles hotels are two of four owned by Crieff Hydro group the others being the Crieff Hydro Resort and the Murraypark Hotels in the Perthshire town.
Crieff Hydro also operates four hotels under management through its Freedom Hotels subsidiary the Yorkshire in Harrogate, the Ballachulish, the Isles of Glencoe in Ballachulish and the Oban Caledonian.
The group achieved a 29.6% increase in turnover at £24.4m. Sales costs and operating costs were higher but the group produced a pre-tax profit of £567,583, up 12%.
Revenue at the Crieff Hydro and Murraypark Hotels grew 5.9% to £19.9m, occupancy remained at 84% and average room as well as revenue per available room rates rose by 7-8%.
Pre-tax profit before exceptional items was up 34% at £888,008. Crieff Hydro received capital investment of £1.3m during the year and the same amount is planned for this year.
Peebles Hydro made a loss before tax of £214,195 before acquisition costs of £15,376 from revenue of £4.4m.