THE chief executive of Crieff Hydro has cited the fall in conference business sparked by the oil and gas industry downturn as profits at the hotel company fell by more than 50 per cent.

Stephen Leckie admitted the company did not anticipate the extent to which the collapse in the oil price would affect its business, noting that had it led to a “significant decline” in conference bookings at Crieff Hydro and Peebles Hydro in its last financial year.

The drop off in corporate trade, alongside the strength of the pound prior to its post-Brexit vote collapse, was highlighted by Mr Leckie as profits at Crieff Hydro fell to £265,048 in the year to February 29.

The company, which expanded its portfolio in August with the multi-million pound acquisition of the Isles of Glencoe and Ballachuilsh hotels in the West Highlands, saw turnover broadly remain steady at £24.3 million.

Mr Leckie said the results reflected a transitional year for the Perthshire firm, which saw it invest £1.8 million in Peebles Hydro, and sister property the Park Hotel, as it continues its quest to restore the fortunes of the Victorian hotel.

Crieff Hydro acquired the Peebles hotels from McMillan Hotels for £10m in early 2014. The hotels saw revenue fall by 3.7 per cent to £4.2m and book an operating loss of more than £700,000 last year, which Mr Leckie said was partly down to the properties being closed for a combined 17 weeks to allow refurbishments to the public areas to take place.

However occupancy rate has grown to 80 per cent from around 50 per cent under the Leckies’ stewardship.

Mr Leckie said: “Last year, for many reasons, was a tough year for us. Turning a hotel around, I think, takes five years. We think it will be five years before we really turn [Peebles Hydro] around.

“We’re three years into it. We have cracked the back of the refurb and now it’s about growing the reputation, so when folk talk about Peebles Hydro they say it’s that place has been done up, rather than it is being done up.”

Investment is continuing to be made at the hotel, where more than half of the rooms have been refurbishment since the Leckies took over.

The company is planning to spend a further £1.1m on the property this year, which will be focused largely on improving bedrooms and public areas. Recent developments include the launch of a microbrewery, Free Wheeling, which is run by an independent brewer.

The brewery, whose beer is served at the two Peebles hotels, joins a gin palace at the Hydro, where more than 100 varieties of the popular spirit are available.

“Now it’s about growing the revenue in the business, that’s the big thing,” said Mr Leckie.

“We do not want to go much beyond 80 per cent [revenue] because we need to get into the rooms to refurbish the bedrooms.”

Away from Peebles, the company sanctioned a £900,000 investment in its flagship Crieff Hydro resort, which saw expenditure focused on upgrading bedrooms and public areas, as well as on its website and IT infrastructure. A further £1.3m will be spent this year on the hotel, which works to a programme of upgrading its bedrooms and self-catering units every eight years.

Crieff Hydro and its sister Murraypark Hotel reported a six per cent rise in operating profit to £877,554 last year, on revenue of £19.9m.

Mr Leckie said the Scottish tourism sector had enjoyed a healthy season in 2016, helped by the depreciation the sterling versus the euro.

However, he expressed concern over his company’s ability to recruit staff when the UK departs the European Union. At present, 23 per cent of its employees at Crieff Hydro, and 18 per cent at Peebles Hydro, come from eastern Europe, compared with an industry average of 15 per cent.

Without access to workers from these sources, the operator said the industry would find it difficult to find chefs and kitchen roles, which involve weekend work. Local people are more interested in roles which offer more standard office hours.

Mr Leckie said the company was working closely with the Scottish Tourism Alliance and the British Hospitality Association to ensure MPs and MSPs are “fighting our corner” in the Brexit negotiations.