JURYS Hotel Group is to set up two new Jurys Inns - one in London and one in Limerick, at a cost of £17.4 million. This will, bring the number of economy inns to seven, on top of the nine hotels it already owns.

It has acquired a one acre site in central London on which it will build a 168 bedroom Jurys Inn at a cost of £10 million sterling (£9.9 million). Jurys will also open a £7.5 million, 151 bedroom Jurys Inn, in Limerick city, creating 80 new jobs.

Mr Peter Malone, Jurys managing director, announcing the expansion, said the group had shown that there is a strong demand for economy inns and is interested in further expansion in the major cities of Britain. Further purchases will be either existing hotels or greenfield sites.

The latest expansion will be funded from internal sources. Gearing is at a low 8 per cent which rises between 25 per cent and 30 per cent if leases on the inns are taken into account.

Mr Barry Sheehan, director, finance and corporate affairs, noted that Jurys is generating strong cash flow which will finance the developments. There may be a "little" amount of borrowing.

The London freehold site is at Pentonville Road and was purchased for £1.75 million sterling from the receiver of a garage company which had occupied, the premises. The whole development will cost £10 million sterling (£9.9 million). This would put the cost per room at £59,500 sterling. The room rate is expected to be in the region of £60 sterling.

Construction is scheduled to start next spring and the opening is expected for a year later. As the receiver was unable to sell it as a garage, he obtained planning permission for a hotel and he then planned to put it up for auction.

Mr Malone said the location is recognised as being an "up and coming" London area where residential values have risen considerably over the past five years. The City is two stops on the Northern Line to Moorgate. The new British Library which is nearing completion and the Sadler's Wells Theatre are within "easy walking distance of the site", he said.

The new Limerick inn is being developed by Edward Holdings, a Galway based company, and is partly constructed. Negotiations' with Edward Holdings have been taking place for some time but, they have now been successfully concluded. The new inn is situated at Mount Kennett, adjacent to the new Shannon Bridge.

The £9.5 million in under construction in Belfast, is on "schedule. With grants from the Northern Ireland tourist body and interest grants from the EU, the net present cost comes down to about £4 million, said Mr Sheehan. "It will take very little occupancy, to make money" according to Mr Malone. The unsettled political situation is not having any adverse impact. "There is still a shortage of rooms" and "there's business there all the time".

Jurys is continuing to trade strongly, said Mr Malone. Profits are expected to rise from £9.5 million to £11.5 million in 1996/97.