A DIRECTOR at a leading Scottish hotel has warned that an end to the free movement of people as a result of Brexit could lead Scottish hospitality businesses unable to fill positions.

Colin Morrison, from the Auchrannie hotel and spa resort on the Isle of Arran has said the potential loss of staff or inability to recruit seasonal staff from the European Union was a concern.

Mr Morrison was speaking as the hotel unveiled a jump in underlying pre-tax profits to £190,000 on revenue up a quarter to £6.7 million – thanks largely to the opening of a extension to its spa resort.

“It must be a concern given we have a reasonably high number of European Union staff, some of whom have been here a good number of years and who are very settled on the island, with families at school,” said Mr Morrison.

“Obviously, the contribution they make here is greatly valued and anything that made it more difficult for them to work here or for people to come and work here from the EU would be difficult for us, as I guess it is for the whole of the hospitality industry.”

In the last year the company, which this year will move to an employee ownership model, had an average of 149 staff, rising to 180 in the summer months.

Mr Morrison added that while he was hopeful EU nationals currently living in Scotland would be able to stay, there was further concern over the ability for EU nationals to take seasonal jobs in the UK after Brexit.

“Our jobs are advertised everywhere and there certainly isn’t the workforce on the island. Employment on the island is high; there aren’t many unemployed,” he said. “On the mainland there is a higher level [of unemployment] but there is then the issue of travel.

“We have a lot of staff accommodation to put people up in when they are here in the summer. It’s difficult to say [if we would be able to fill vacancies]; it’s one of the big unknowns at the moment. We would hope so, but every business is going to be in the same situation should it come to that and Scottish people might be more inclined to find work closer to where they live at the moment rather than living away, like they would if they worked here.”

Crieff Hydro owner Stephen Leckie has expressed similar concerns, given almost a quarter of staff at the hotel are EU nationals.

The period covered in Auchrannie’s accounts, for the year to March 31 2016, does not include the high-season following the Brexit vote, but Mr Morrison said the small number of overseas tourists to Arran meant the impact of lower sterling was negligible.

“Overseas visitors aren’t a huge part of our business, and I think Arran as an island has a far lower percentage than Scotland in general. It’s a bit undiscovered still for overseas visitors,” he said, adding that just six per cent of turnover came from overseas visitors.

As the country nears Prime Minister Theresa May’s self-enforced March deadline for triggering Article 50 and beginning the two year process to leave the European Union, Mr Morrison said any negative impact of Brexit on the economy would further impact the business.

“Any downturn in the economy would potentially hit us... For a lot of our guests it is not their main holiday, so we certainly found in the last downturn, we struggle a bit more to get people here because ours was the extra holiday or the weekend away.”

For the accounting period, there were certainly no issues regarding attracting visitors to Auchrannie, in Brodick, for those breaks. The occupancy rate at the hotel was 88 per cent for the period, with the extended spa seeing 86 per cent occupancy.

As a result, Mr Morrison said more than a £1m of the £1.4m increase in revenue was “directly attributable” to the 20 new rooms, which is ahead of the £725,000 forecast by the hotel. “The rooms were open for 11 months, and [86 per cent] was way ahead of what we were expecting,” he said. “We expected occupancy to build up slowly.”

Work continues apace at Auchrannie, with the business spending £500,000 this winter refurbishing two restaurants and rooms in the original hotel.

Mr Morrison noted that for the first time parts of the hotel have been closed for a period to allow for upgrades. “It’s not usually something we would do but our occupancy levels are so high now it’s very hard to get rooms empty and get work done without disrupting guests.”