Revenues from continuing operations have declined 23.4% as a result of the sale of one of our three hotel properties during 2005. For the two hotel properties that the Company continues to own and operate, room revenues in the first nine months of 2006 were up 4.7% over the same period of 2005, from $13.0 million to $13.6 million. The Company’s hotel property in Edmonton has had the strongest start to any year in recent history, with an increase in the number of room nights sold of over 8,100, or almost 10 percentage points of occupancy. While this was partially due to an overall increase in Edmonton business, our property captured considerably more than its fair share of this incremental business. The Company’s Crowne Plaza property in Toronto also performed well, although it fell short of the record levels set in 2005 by 3,867 room nights, or 4.0% of occupancy. Average daily rate ("ADR") increased marginally, from $109.51 in 2005 to $109.62 in 2006. The increased occupancy combined with the increase in ADR resulted in revenue per available room ("RevPAR"), a key industry statistic, increasing by $0.22, from $75.18 in 2005 to $75.40 in 2006. Increasing RevPAR while controlling costs will drive increases in net income at the hotel level and, ultimately, the corporate level.

industry-wide recovery under way, the rate of the Company’s increase in occupancy far exceeded the general recovery in the national market, with the result that by the end of the third quarter of 2004 the occupancy rate of the Company’s portfolio led the national average by 4.3 percentage points, at 67.5%. This gap between the Company’s portfolio and the national average declined to 3.6 percentage points in 2005 and has further declined to 2.3 percentage points for the nine months ended September 30, 2006. The sale of two hotel properties situated in the Greater Vancouver area in 2005 has contributed to this situation, as both properties historically had very strong occupancies over the summer months.

September 30, 2006 the Company’s portfolio of hotels inceased their ADR by only $0.11 over the previous year, compared to a Canada wide increase of $4.97, as a result of which our RevPAR, at $75.40, now trails the Canadian market average by $7.94. As noted above in the discussion about occupancy, the Company sold two hotels situated in the Greater Vancouver area during the third quarter of 2005. One of these properties, located in the heart of downtown Vancouver, had recorded RevPAR in the period up to its sale in 2005 of $82.75, whilst the two remaining properties in the Company’s portfolio had RevPAR of only $71.99 over the same period. RevPAR at these two remaining properties increased by $3.41 from 2005 to 2006.

Despite a reduction of $5.7 million in room revenues, our gross margins on rooms increased marginally from 71.1% in 2005 to 71.2% in the first nine months of 2006. For the three months ended September 30, 2006 gross margin on rooms was 72.4% compared to 72.9% in the same period of 2005.

Of our two properties, one has a particularly strong food and beverage ("F&B") department, and gross profit from F&B from the two hotels, at $1.5 million, was only $0.1 million short of the 2005 figure from three hotels. Gross profit margins on F&B improved from 18.2% in 2005 to 19.7% in 2006 as the higher margins at the Chateau Lacombe had a greater effect on the overall average.

Gross profit for the nine month period decreased from $16.7 million in 2005 to $12.7 million, with gross profit margins remaining steady over the two years. For the three months ended September 30, 2006 gross profit was $4.6 million, or a 56.4% margin, compared to $6.4 million or a 58.7% margin in the same period of 2005. This decline in gross profit margins in the three month period reflects the loss of the Vancouver Hotel Property, which contributed higher margins during the summer months as tourism increased in Vancouver.