Surround yourself with people who are better than you at what you do.
These are the wise words of one of the most successful businessmen to come out of Scotland.
Donald Macdonald, the son of a Harris crofter, found himself falling into the hospitality industry “by accident” after he spent a summer carrying out work experience as a student at Turnberry.
But 50 years later the entrepreneur is still at the helm of a company he established 27 years ago. He now heads up more than 40 hotels across the UK, Ireland, Spain and Portugal, ten resorts throughout the UK and Spain and employs more than 4,000 staff across operations.
And what does he attribute his success to? A whole lot of luck and the support of “good people”.
“If you come into business to make money you never make it,” he said.
“If you come into business because you enjoy doing what you do and you have got great people around you, you will make a lot of money.”
Established in 1990 by Mr Macdonald and colleagues, Macdonald Hotels and Resorts has steadily and successfully expanded from its beginnings in Aberdeenshire to become the UK’s largest privately-owned hotel group. Mr Macdonald started his growing empire by purchasing the Waterside Hotel in Peterhead and Ardoe House Hotel in Aberdeen. Despite the properties no longer being on his books the businessmen still sees them as an important part of his career.
This year the company saw pre-tax profits rocket to £62.4million – from £2.7million a year earlier – as the group made substantial gains from the sale of land and two hotels. Turnover increased by 5% to £163.4million and the company has cut its debt from around £700million to below £200million, which is what it is today. Mr Macdonald believes this was achieved without diluting the overall enterprise value of the business and through a combination of asset trading and non trading and land sales.
The firm also spent nearly £13million on refurbishments, which together with economic factors, are expected to deliver further growth in 2016/17. And plans are already afoot to continue development on some of his best loved properties – including the Macdonald Pittodrie House Hotel at Chapel of Garioch.
Nestled at the foot of Bennachie, the beautiful countryside mansion is set within the grounds of a 2,400 acre estate surrounded by breathtaking natural scenery including woodlands and carefully landscaped gardens. Mr Macdonald said he believes the north-east became complacent for a while in terms of marketing itself as a tourism destination. Surrounded by an protective economic bubble, hotels in Aberdeen and Aberdeenshire appeared to be shielded by the affects of the 2008 recession as venues filled up daily with those coming to the region to work in oil and gas. But now, as the region continues to feel the affects of the crash in oil price, hotel bosses are having to work harder to market themselves.
Mr Macdonald said: “ I think Aberdeen is very, very under rated as a tourist destination. I think it is fantastic here, especially Royal Deeside and the other thing about up here is the quality of the fish, the meat, the game, you know salmon that was before the bottom fell out of the Dee. I think it is a very, very underrated part of the world and we are not doing enough to secure it.
“If you are surrounded by affluence which the Aberdeen economy has been, I mean we went into a recession, I mean the whole of Britain went into a recession in 2008 – apart from Aberdeen. It didn’t affect London and it didn’t affect Aberdeen because they both had their own economy. Our economy didn’t have one hiccup, not one hiccup, but you get complacent because you don’t need to go out an plough the fields and sow the barley and harvest it because you are well closeted. That’s why I feel very, very optimistic about this place.”
The firm has already spent more than half a million pounds on the grounds of Macdonald Pittodrie House in what Mr Macdonald is calling phase one of a multimillion pound redevelopment. Although the hotel and its integrity will remain as it is plans have been drawn up to create a large extension which will be used as the new dining room. It will allow diners to overlook Bennachie and will create additional space for around 100 extra guests to attend weddings and functions. The current dinning room would be transformed into a library.
Plans are also in motion to build around 29 self contained cottages on the grounds as well as a spa and leisure centre at the site of the old squash courts.
The 70-year-old said he believes greatly in investing today to create a destination people will want to go to in the future. He said: “We are spending money here on parts of the estate here that we will not get a return on, like the grounds, but it was so neglected. We have planted hundreds, I said to my wife we won’t see it but the generation after this will benefit and that’s the way to look at it.”
One family member who is likely to see at least the start of the fruits of his labour is Mr Macdonald’s son Ruaridh, the company’s deputy chief executive who joined the company after graduating in agriculture and business studies and marketing from Aberdeen University.
He was part of the Grampian Country Food Group graduate trainee programme before moving into marketing at world famous water producer, Highland Spring.
Despite being delighted by his son’s positioning in the business Mr Macdonald said he had no part to play in him coming on board.
He said: “ My son really came to us by accident. He came to Aviemore and he hadn’t planned to come to us but he was involved in a management buyout of an events company and Gerry Smith (Mr Macdonald’s deputy) came to me and said ‘do you think we should buy that company that Ruridh is involved with?’ I said ‘No Gerry, if the people leave and we buy the business there is no business left. People are the asset.’ Gerry came back a few months later and said to me ‘Can Ruaridh come and work with us?’ I said, ‘I have never discussed it with him and I said I don’t want to get involved in it but if he wants to join us then you sort it out.’ That’s how he came to work in the business and we get on very well together. You have to surround yourself in life with people who are better at what they do than you are.”
During our two hour interview at the Macdonald Pittodrie House Hotel the entrepreneur told me that relationships were so important to him on one occasion he walked away from signing a deal because he had a “gut instinct” it wouldn’t work out.
He said on other occasions he knew “within minutes” of meeting someone that they would make the perfect business partner. “It’s instinctive,” he said. I can’t explain it, it’s just amazing.”
“My father used to say to me ‘tell me who your friends are and I will tell you who you are’.”
Mr Macdonald, a man of great faith, appears to also be humble with his status and takes nothing for granted. “I owe life a lot and life doesn’t owe me anything really,” he said. “I just enjoy people and I think if you get great people round you, you can have a great business. If your people are not right no matter how great your carpets or your wall panelling or photographs are you have a hopeless business.”
The pensioner, who acts as company founder, executive chairman and chief executive, said he is now trying to “wind down” and focus more on the charitable trust he and his wife Christine established shortly after he floated the company in 1996.
He said: “My wife and I set up a charitable trust about 20 years ago. We floated the company in 1996. A few years later we decided that everything we had would go into this charity. My wife spends too much time involved in it and I would like to spend more time involved in it. That’s my ambition. I probably don’t do that much really, maybe no more than two or three days a week.”
But while Mr Macdonald plans to focus more on his charity work his working ethics will remain among all those who he has mentored in the firm so far.
He added: “There is three criteria in the business and profit is the third one. The first one is people, the second one is product and the third is profit. I say it to my people all the time ‘If you do it in that order – get great people, make sure your product is great whether it be the sheets on the bed or the towels people dry themselves with and what made a great hotel 100 years ago will make a great hotel today. That’s cleanliness, nice people and good food and I believe that.”
