Debt-ridden YHA set to sell hostels

More than one-third of the Youth Hostel Association's (YHA) properties could be put on the market as the association struggles to cope with interest payments on its outstanding debts.

The YHA has more than 220 properties in England and Wales, with a combined value of about £100m, but its £34m of debt accrues more than 1m of interest each year.

The association is considering selling as many as 80 of its poorest-performing properties as part of a new five-year-plan, if they cannot be restructured.

A YHA spokesman said: "Once the YHA has paid off the interest on its borrowings, there are insufficient funds to carry out the required level of investment in our network of properties, and this situation needs to be addressed."

He added: "We need a new strategy to reduce our £34m borrowing, as we would rather be spending [the £1m interest] on upgrading the hostels."

The YHA has 39 properties which are losing money and a further 40 which it describes as "borderline". Other options for the YHA are to retain its existing network but improve marketing, and to enforce cost-cutting measures in an attempt to improve profitability.

A consultation with staff and members ended in July and the new five-year strategy will be announced in December.