The Great Southern Hotel group needs either fresh investment or a new owner if it is to prosper in the years ahead, a consultant's report has concluded.

Consultant Farrell Grant Sparks warns that the company's financial position could be undermined if the group is not structured correctly.

Aer Rianta - which owns the hotel group - says the report suggests a range of "far-reaching recommendations" and these are being assessed.

Any sale is likely to run into political opposition, with the Minister for Arts, Sports and Tourism, Mr O'Donoghue, a few months ago expressing his opposition to such a move.

But the Minister for Transport, Mr Brennan, has floated the idea of transferring ownership of all the hotels over to Dublin Airport as part of a break-up of Aer Rianta.

He has suggested this might be a way to compensate Dublin for taking on so much of Aer Rianta's debt in the break-up.

The chief executive of Aer Rianta, Mr John Burke, recently said the hotel group was experiencing a difficult year. It is understood a fall-off in American visitors is the main reason.

Last year the group reported an after-tax profit of €3.9 million, but this included the sale of property. Without this the company would have posted an after-tax profit of about €1 million. It is believed the financial position has deteriorated since. Neither the hotel group nor Aer Rianta would comment yesterday on financial matters.

In a statement Aer Rianta said the hotel group was facing "challenging trading conditions being experienced by the hotel industry generally".

It is understood the report says that in order for the hotels to reach their full potential they need fresh capital and a substantial marketing investment.

It says this could be provided by a company taking a stake in the chain or buying the chain outright.

Senior officials in the Department of Transport were given an account of the report's contents recently.

The Great Southern Hotel chain includes hotels in Shannon, Killarney, Parknasilla, Rosslare, Dublin Airport, Cork Airport, Galway's Eyre Square, Corrib Galway and Derry.

The boards of Aer Rianta and the hotel group have been given the details of the report but neither wished to make a comment yesterday.

The statement, however, said that close consultation with staff and with their representatives would take place whatever the outcome.