MARCLIFFE Hotel and Spa in Aberdeen has made a loss for the first time in 20 years after a deal to sell to Stewart Milne Group fell through.
The five-star hotel, which has entertained members of the Royal Family, had announced it would close in early 2015, with Stewart Milne Group (SMG) set to demolish the hotel to make way for luxury flats.
Owner Stewart Spence later revealed the deal was off and the hotel would stay open, to much public acclaim. According to Companies House filings Mr Stewart said he decided to remain open because SMG reduced its offer “considerably” and changed the timescale of the proposed development.
The results for the year-ending September 2015 reveal the extent of damage done to the business as a result of the uncertainty surrounding the sale.
Marcliffe made an operating loss of £185,120 for the year ending September 2015, accelerated by £200,000 in redundancy payments to staff.
This compares to an operating profit of £696,401 the previous year, which included £167,000 in redundancy payments.
Revenue was down 43 per cent to £4.34m as regular customers booking elsewhere throughout the uncertainty. The hotel abandoned all marketing activity ahead of the closure and sales from room bookings dropped by 44 per cent as a result of a 42 per cent reduction in occupancy. Restaurant revenue fell by 41 per cent, and spa sales fell by 33 per cent.
Mr Spence said the loss arose mainly due to the terms agreed with SMG. He he was asked to cease trading in December 2014 to allow the hotel to be vacated in February 2015, before the March turnaround. SMG declined to comment on Mr Spence’s claim.
“The hotel is firmly committed to a programme of refurbishment, most of which has now been completed,” wrote Mr Spence in the strategic report.
He added that the outlook for the current financial year was more promising and borrowing facilities were renegotiated in May 2015.
Mr Spence was unavailable for further comment.
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