IN an industry facing many headwinds, from rising overheads to Brexit-sparked staffing shortages, hospitality entrepreneur Tony Story has seen business move steadily in one direction since acquiring The Kingsmills Hotel in Inverness in 2007.

In fact, trade has been so broadly upward for the Kingsmills Hotel Group over the last 12 years that not only did the firm invest £7 million to launch a five-star hotel in the Highland capital earlier this year, it is also planning another.

The Kingsmills group opened Ness Walk, a 47-bedroom hotel in a Grade B listed building, at the height of the summer, following a three-year development process.

And it will be followed next year by a third hotel in the city, with the firm also casting its eye over potential opportunities on the Isle of Skye.

The company has secured planning permission to transform a building on Church Street, Inverness, where it plans to launch as Kin, a 70-bedroom, four-star hotel. It is hoped Kin will open at some stage next year, following an investment of £8m.

Kingsmills’ expansion comes during a year when economic surveys have repeatedly underlined the dampening effect Brexit uncertainty is having on business investment. Not only that, but hoteliers around Scotland have been reporting a drop in visitors from the European Union (EU) this year.

Thankfully for Mr Story, the Kingsmills Hotel Group has encountered no such difficulties.

If anything, he said, the only discernible fall in visitor number this year has come from the domestic market, with UK-based tourists proving to be less inclined to visit the Highlands for short breaks owing to the poor summer weather. Even then, the fall appears to have been marginal.

“We get a lot of our business from the US, so nothing much changes,” said Mr Story, who ran hotels for such industry giants as Holiday Inn and Millennium Copthorne before launching Kingsmills.

“A lot of them are returning folk, [on] heritage-type trips [tracing] roots and all the rest of it. The bigger number of visitors are doing Europe."

Yet he does recognise that Brexit uncertainty will be coming into the thoughts of many holidaymakers.

“Why place uncertainty in front of folk when it is just an obstacle to buy?”

Noting that between 80% and 85% per cent of guests at Ness Walk have been from overseas since it opened, Mr Story added: “Fortunately, we were pretty much the same the level in August and July as we were last year.”

It would also be wrong to suggest the firm’s operations untouched by Brexit. Mr Story, who is also a former director of Golden Beach Hotels Ghana, said EU nationals account for a large part of his workforce, and worries about their status going forward.

His concern was reflected by comments made recently to The Herald by Marc Crothall, chief executive of the Scottish Tourism Alliance, who said Brexit-sparked labour shortages was still the biggest concern for employers in the industry.

“It is probably the greatest single challenge we have,” Mr Story said. “It’s extremely worrying, because we have an industry that we can continue to grow, but the human resource is becoming more and more limited.

“We have seen a huge decrease in the number of people from Europe to work in Inverness, because of the uncertainty.”

Asked when the downturn began, Mr Story said: “[For] a couple of years, we have seen a decline. Our percentage of employees coming from overseas has declined.

“Some may argue that it is actually good thing – I don’t believe that it is. I think we need to be able to get the highest possible calibre of person that we can into the job, and I really hope that Government will come back from this, “you can come and work here as long as you are earning more than thirty grand”, because that does not help many of the industries in the Highlands that need people to working at less than thirty grand.

“Hotels, restaurants, bars, construction, perhaps fish processing etc.

“It’s a big challenge, and an unnecessary one.”

Asked whether it would be difficult for local people to fill the void if the stream of migrant workers from the EU is completely turned off, Mr Story went on: “Hugely so, hugely so. There are not the number of people living here for us to employ. We have been reliant for many years now on a number of our employees coming from Europe.”

Mr Story added: “A lot of the guys that are coming across from Europe have got great attitude, they have got great education, they work hard, they have got a great work ethic. And it’s not that they are better than folk from the Highlands – it’s just that there are not enough folk in the Highlands to do what we need to do.”

The most recent accounts for the Kingsmills Group show that it made a profit before tax of £1.03m in the year ended December 31, 2018, up from £753,481, on turnover up to £9.2m from £8.96m.

Commenting on the strategy behind his company’s expansion plans, Mr Story said he takes care to ensure the hotels appeal to different markets. “I did not want to create a competitor hotel to Kingsmills,” he said of the approach to Ness Walk. “Whereas Kingsmills is firmly rooted in upper four star, Ness Walk is rooted in five star. And I think that is what has given us the preponderance of overseas visitors.”

He added: “Kingsmills first became a hotel in 1946, and it’s an extended building that was completed in 1785,” he said. “It sits within five acres of its own grounds outwith the city centre. It’s very much a family, slightly-older demographic than what we are aiming for with Ness Walk.”

As for Kin, Mr Story said this hotel, which is still at the very early stages of its development, would be pitched as an “upper-end four-star” offer, while stressing its design would be “demographically different” from Kingsmills.

Mr Story said he enjoys trading in the Highlands and specifically Inverness, which he said has retained a close-knit feel despite being awarded city status in 2000.

"Tourism is our leading industry and is our leading employer,” he said. “We [get] vast numbers of folk into the Highlands, and not just in the summertime. The seasonality tends to be a seasonality or rate, rather than a seasonality of occupancy.

“For example, Kingsmills will run at just over 90 per cent occupancy for the full year, [though] the rate will vary enormously during the course of the year.”

The firm has 185 staff at Kingsmill, and 50 so far at Ness Walk, with the prospect of that rising to 65. At Kin, Mr Story expects to employ a similar number at Kin as it does at Ness Walk.

Brexit may be a concern for now, at least as far as recruitment is concerned, but Mr Story refuses to get downbeat.

“I think these things will sort themselves out over time,” he said. “But in the short-term we are a very attractive place to come and visit from overseas, because we are cheap – as we know when we go and buy our euros or our dollars.

"Under normal circumstances, [that] will help fuel the domestic market and encourage the overseas market.”

Six Questions:

What countries have you most enjoyed travelling to, for business or leisure, and why?

For business it has to be West and Central Africa - it’s the vibe – culture, but above all the people. From a leisure perspective it has to be anywhere I spend time with my wife Anne and our family.

When you were a child, what was your ideal job? Why did it appeal?

Delivering newspapers and working in the family business – newspaper delivery appealed as it paid – the family business did not.

What was your biggest break in business?

Starting our own business which kind of grew like topsy.

What was your worst moment in business?

Still waiting and happy to do so – but I guess anytime we have a disappointed client.

Who do you most admire and why?

My father in law – not enough room on the page to tell you why – save to say at his funeral a cousin said "they broke the mould when they made Iain MacRae".

What book are you reading and what music are you listening to?

Charles Cumming ‘A spy by nature’. If I’m not listening to Radio 4 – which is usual –it is Classic FM