Hotels group De Vere, hit by impact of foot-and-mouth disease and the postponement of golf's Ryder Cup, is to focus on lay-offs in a cost-cutting drive.

The firm, warning of an "uncertain" outlook, revealed it was setting aside �1.3m to cover redundancy costs.

The move followed an internal probe ordered over fears, which De Vere admitted have been realised, of a "protracted downturn" in demand from foreign tourists over the summer.

The turmoil stemming from the terrorist strikes on the US, which prompted the postponement of the Ryder Cup, have further affected trade, the company said.

Ad costs

Nonetheless, profits during the six months to September will come in only marginally below last year's, a statement on Thursday said.

"De Vere has actually managed to keep the volume of visitors up well," a company spokesman said.

"The trouble is that has had a cost, in terms of extra advertising, and working hard on sales."

While the firm, which employs 6,000 full and part-time staff, hoped the lay-offs would help save �1.5m a year, it has kept the number of redundancies below 50, the spokesman said.

"The move has applied mainly to middle management," the spokesman said. "That is why the redundancy costs are relatively high."

'Halo effect'

The postponement of the Ryder Cup, which was due to have been held at De Vere's Belfry venue at the end of September, cost the company both in terms of cash and feelgood factor, Thursday's briefing said.

"Contribution from the De Vere Belfry... was �700,000 less than anticipated," the statement said.

"The hotel has now returned to normal trading, but without the advantage of the post-Ryder Cup 'halo effect'."

The venue will, however, host a postponed Ryder Cup tournament next year.

Bidders rebuffed

Overall, turnover at De Vere hotels rose 5.0% over the year to the end of September, achieving an occupancy rate of 75%.

The company also confirmed that it is to retain ownership of its 10 Greens health and fitness clubs, for which it received several bid approaches over the summer.

Other hotels in the De Vere portfolio include The Grand in Brighton, The Cavendish in London, and Oulton Hall near Leeds.

The firm's Slaley Hall hotel, near Newcastle, lost the race to host the 2010 Ryder Cup, but has been chosen by England football team boss Sven Goran Eriksson as the permanent training base for the squad.

In the City, shares in De Vere stood 18p down at 227p in morning trade on Thursday.