The owner of three Highland hotels has revealed a planned investment of up to £30 million across its portfolio is on pause.
Stephen Leckie is chairman and chief executive of the Crieff Hydro Family of Hotels.
As well as its flagship Crieff Hydro, it also operates Ballachulish Hotel and The Isles of Glencoe Hotel, both near Fort William, and Kingshouse Hotel in Glencoe.
In total, the business employs 860 staff across seven Scottish venues including the Ballachulish Hotel and The Isles of Glencoe Hotel, both near Fort William, and Kingshouse Hotel in Glencoe.
‘Making money is tough’, says Highland hotelier
Speaking as the firm’s accounts for the year to February 2023 were published, Mr Leckie said it had been a challenging period.
While turnover rose by almost £8m year-on-year to £36.4m, from £28.6m in 2021-22, pre-tax profits fell to £418,657 from £3.1m previously.
Mr Leckie said the fall in profits was down to cost pressures in all areas, from energy bills to staffing.
He said recently the national living wage rise would cost his business £750,000.
Commenting on the 2022-23 results, he said: “Making money is tough.
“We’re not doing it to buy a yacht in the Caribbean; we’re doing it so we can reinvest.
“We want to spend on our customer experience, on our buildings, training for staff, but if we’re not making money, we can’t do that.
“We have an ambition to continuously improve so we can offer our staff and customers better. If you’re not making profits, it changes the focus.
“We really want to make more money but the waves keep washing over us, ever bigger.
“The business and the whole industry is feeling it.”
Highland hotels owner puts investment on hold
Mr Leckie said spending plans for the hotels have, therefore, been put on hold.
He added: “Plans for investment and growth has to be delayed until one day, we hope, we get in a position where we’re making more money.
“We had plans to invest £20-30m across the company into expansion. We simply cannot do it if we’re not making money.”
Mr Leckie, who is also president of Scottish Chambers of Commerce, said it had been a challenging period for his family.
His wife, Fiona, and their children are involved in running the business.
“It has had its strain on everyone involved,” he added.
“That’s the big challenge about being in business – you’re risking everything you have and sometimes you see no light at the end of the tunnel.
“It is so worrying. You fear for your income, for your family’s income and for your employees.”
Challenges in current financial year
Mr Leckie said while the start to the current trading year had been promising, occupancy rates had dropped since the October school holidays.
He continued: “The challenge is that discretionary spending is down quite a bit which impacts our activities, particularly in Crieff and Peebles.
“Since the summer, rates and volume have dropped right off.
“We had a reasonable first six months of the year, but the profile now has changed completely.”