The owner of Bradford’s Midland Hotel says the city centre venue is well on the way to becoming AA four-star rated.

Peel Hotels chairman Robert Peel said the Midland could be upgraded now but more work would be carried out to ensure the historic three-star Midland did not just “creep in” to the higher category but achieved it “with a bang”.

So far this year the Midland has shared nearly £277,000 of capital spending by Peel Hotels on upgrading several of its nine hotels.

Mr Peel pledged to continue investing in the Midland next to Forster Square station which was built between 1885 and 1890 by the Midland Railway Company. Work will continue to finish upgrading the hotel’s 90 bedrooms, more than 60 per cent of which have been improved.

The improvement agenda also includes decorating corridors, boosting the external appearance of the Victorian building and roofing and enclosing the car park to make it more private.

Mr Peel said the Midland had seen an encouraging trading year so far with higher occupancy and more function bookings. But he reiterated his complaint that the hotel was facing competition which he regarded as unfair from other hotel groups, such as budget chain Travelodge and Jury’s Inn, whose businesses were being underpinned by banks, enabling them to undercut prices.

He said: “The banks are keeping these and other groups going and that is creating an unfair playing field for businesses like ours.”

In the 28 weeks to August 18 Peel Hotels, which also includes the Cosmopolitan Hotel in Leeds, increased sales to £8.23 million from £8.21m in the same period of 2012.

Operating profit was boosted by 27.2 per cent to £536,982 against £422,230 a year earlier, while earnings before interest, tax and amortisation increased by 6.4 per cent to just over £1.09m from £1.03m. The interim pre-tax profit was up to £202,136 from £45,049. Peel reduced its net debt by £366,066 and has increased the interim dividend from 0.2 p to 1.1p a share.

While the average room rate fell by 0.3 per cent, accommodation revenue per available room (Revpar) increased 1.7 per cent with occupancy up by two per cent.

Mr Peel said the board had decided against buying out an interest swap deal in August at a cost of £329,000 but said the group would benefit by more than £400,000 a year after April when the agreement expires.

He said: “We hope to continue this improvement over the remaining trading periods of the year.”