CRIEFF HYDRO, the four-star Perthshire hotel, is confident that a £1 million investment will cement its position as one of the UK’s key leisure and conference resorts after shrugging off the economic gloom to deliver a small rise in annual profits.
Over the past year, chief executive Stephen Leckie – the fifth generation of his family to run the establishment – has overseen a package of upgrade work at the resort, which is understood to be Scotland’s oldest registered trading company.
Founded in 1868 as the Strathearn Hydropathic Establishment Company, the firm now employs some 550 people and attracted up to 1,000 visitors a day last year.
Leckie said: “Over the last year we have continued to drive investment in both our team and the resort. Running most businesses in this economic stage of the cycle is a challenge and we are no exception.
“However, looking after our people and our customers first is what has sustained this business since 1868 and that is what we focus on first and foremost.”
Accounts for the year to 29 February show that the iconic resort booked a pre-tax profit of £605,030, up from £601,795 the previous year, although turnover dipped 1.6 per cent to £17 million.
Writing in the firm’s 145th set of annual accounts, the directors admitted that trading had been challenging “on all fronts” during the year, with a 1.5 per cent drop in occupancy. Average daily room rates edged down 0.2 per cent and accommodation yields – the industry measure of revenue – fell 1.8 per cent.
They added: “Though the main holiday periods remained strong, the shoulder months proved more difficult and both leisure and conference markets were rate driven. Our leisure-reliant competitors have followed the same trading pattern, albeit many have had more severe years previously.”
Accountancy firm PKF recently warned that Scotland’s hotels are struggling to build up enough financial reserves for the winter as a pick-up in June revenues failed to make up for a poor early season.
The firm said last month that Aberdeen’s hoteliers continued to enjoy the benefits of the city’s vibrant oil industry, with occupancy up 2 per cent and room yields 6.7 per cent higher than last year.
However, hotels in Glasgow had to cut prices to achieve a 1.4 per cent increase in occupancy, and yields fell by 4.7 per cent.
Edinburgh’s traditionally strong hotels sector continued to feel the squeeze from the weak euro, which means British holidaymakers are heading abroad while foreigners find visiting the UK more expensive. The capital saw both occupancy and revenue fall by 2.5 per cent and 1.5 per cent respectively.
Despite the ongoing crisis in the eurozone, Leckie said VisitScotland, the national tourist agency, was “working very well in pulling customers in” and he also highlighted the recent Disney-Pixar movie Brave as having played an important role in raising the country’s profile overseas.
Crieff Hydro’s directors said the results would have been “significantly worse” had it not been for the promotion of sales and marketing director John Jennett to managing director in April 2011. The move marked the first time in more than 140 years that someone outside the founding Leckie family had come in to run the hotel.