Challenging, yet profitable year for Crieff Hydro hotel company

By Emma Eversham contact

- Last updated on GMT

Crieff Hydro's owner said profitability had been hit by improvements to all its hotels, but it was confident for the year ahead
Crieff Hydro's owner said profitability had been hit by improvements to all its hotels, but it was confident for the year ahead

Related tags: Profit

The boss of Scottish hotel company Crieff Hydro has reported a profitable year for the business despite challenging trading conditions and a large investment in its properties. 

CEO Stephen Leckie, whose business includes Crieff Hydro Hotel, Murraypark Hotel, Peebles Hydro Hotel and The Park in Peebles, reported a consolidated revenue of £24.3m and pre-tax profits of £265,048 for the year ending 29 February 2016. 

He said: "This was a tough year for the industry generally with the shrinking of the oil and gas sector, which may seem a long time ago now, impacting on conferencing business and the strength of the pound.

"Despite this, Crieff Hydro and Murraypark delivered revenues of £19.9 million and an operating profit up 6 per cent on last year of £877,554. This was achieved through a targeted marketing campaign and focused cost control as we knew from the start that Peebles would not be contributing this financial year." 

He said alongside investment in bedroom and public area refurbishment, the company also installed improved guest WiFi and a propoerty management system. 

Transitional year

The year saw Crieff Hydro invest £1.8m in refurbishing in its two hotels in Peebles while its Crief hotels received £900k worth of improvements. 

Leckie said the work had impacted sales at the Peebles hotels. Revenue fell 3.7 per cent to £4.2m. 

"In Peebles, this was a year of transition," he said. "Both hotels were closed for a combined period of 17 weeks at the start of 2016 to refurbish their public areas, resulting in a creative new look and feel but with an impact on revenue. We've also been refurbishing bedrooms at Peebles Hydro with nearly half now benefiting from a complete makeover and we're doing many more in the coming year.

"Behind the scenes we've invested significantly to modernise and improve the heating, water supply, electrics and fire alarm system. We've also installed a new biomass boiler to replace the steam powered museum piece that's been there for many years and also reduce our impact on the environment. This has taken its toll on profits, resulting in an operating loss of £703,821."

Encouraging

Leckie, whose business acquired two more hotels - The Isles of Glencoe Hotel and The Ballachulish Hotel - in September, said the future was 'looking good' for its Peebles hotels with new bars, including a Gin Palace, menus and activities in place. 

"We always knew we were investing for the long term when we bought the two hotels in 2014 and remain confident they'll prove to be an excellent long-term acquisition. Indeed, this year is looking good and our future bookings pipeline is encouraging too," he said. 

"This is a business full of potential anchored by the stability of Crieff Hydro and these results paint that picture. We're settling into being a larger and more complex business and it's not without its challenges but the great people I have throughout the business makes me confident and optimistic we can fulfil the potential of the fantastic and unique hotels we now own and manage."

Related topics: Business, Hotels, Trends & Reports

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