Macdonald Hotels has welcomed a gradual recovery from the crippling impact of UK-wide hospitality closures during the pandemic.
The group – whose luxury hotels include Norwood Hall, in Aberdeen, and Pittodrie House, near Inverurie – said it had seen a bounce in meetings, events and other corporate business during the first four months of its current trading year.
And total room night sales are up by 20,000, or 14%, year-on-year, the company added.
Staycations in decline
The group is still benefitting from demand for staycations.
But this is now “softening” as a result of the re-opening of flights to global destinations.
Macdonald is one of the UK’s largest independent hotel groups. Its portfolio boasts many operations in the Highlands.
These include Aviemore Resort, comprising Morlich Hotel, Aviemore Hotel, Highland Hotel and woodland lodges.
Macdonald’s Spey Valley Resort, in Aviemore, and Lochanhully Resort, in Carrbridge, both offer self-catering accommodation.
The company has just posted accounts highlighting the impact of two national Covid lockdowns on its business during the year to September 30 2021. Restrictions started to ease from March 28 2021.
Macdonald’s Scottish hotels were closed or partly closed for 40% of the accounting period, while English sites were partly or fully shut for 34% of the time.
I’ve been in this industry for nearly 40 years and nothing comes remotely close to the unprecedented challenges we had to face during the first year of lockdown.”
Gordon Fraser, chairman, Macdonald Hotels
The disruption left privately-owned Macdonald nursing pre-tax losses of £15.16 million.
The West Lothian-based group had made profits of £29.4m in the previous 53 weeks, when the balance sheet was boosted by a £72.7m gain from the sale of four properties.
Turnover for the latest period totalled £66.8m, down from £75.9m in 2019-20.
Macdonald highlighted a narrowing of operating losses to £12.2m in 2020-21, from £36.9m during the 53 weeks to October 1 2020, as a reflection of improved trading.
Chairman Gordon Fraser said: “I’ve been in this industry for nearly 40 years and nothing comes remotely close to the unprecedented challenges we had to face during the first year of lockdown.
“Compared with that, the year covered in the latest results was when we started to see the light at the end of the tunnel.
“Even so, when you consider how long we were still forced to close during the year to September 2021, we can be incredibly proud of how far we’ve come.”
He added: “We were finally allowed to welcome back our brilliant workforce and our valued guests, benefitting from high occupancy and high average room rates throughout the group, including in our Spanish resorts.
“We saw strong trading and cash generation from July through to September 2021, thanks to the staycation bounce in the UK, which enabled us to narrow losses.”
Macdonald also reported a reduction in net debt, from a peak of £700m, to £26m.
This follows the sales of “non-core” hotels in Edinburgh and Manchester post year-end.
Refinancing complete
Mr Fraser revealed the group had also completed a refinancing to help pay for “our largest reinvestment and refurbishment programme in two decades”.
He added: “This major upgrading programme will be transformational for the group and also for our guests and colleagues.
“This ambitious project will, over time, be rolled out to all of our properties, further strengthening our exceptional portfolio of assets.”
Five sites – in Bath, Marlow, Stratford, Ascot and Lymington – are to benefit from the initial upgrades.
This year’s figures expected to show ‘welcome return to profitability’
Mr Fraser added: “Despite the adverse impact of double-digit inflation impacting all costs but mainly payroll and food costs, a massive increase in utility costs and rising interest costs, we expect the results for the current year will show a welcome return to profitability at both a trading and an overall profit level.
“Ebitda (earnings before interest, taxes, depreciation, and amortisation) has increased from £2.5m in the year to September 31 2021 to £11.5m in the year (2021-22) just finished.”
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