By Ian McConnell

Business Editor

SCOTTISH hotelier Paddy Crerar says the UK has “been placed in an impossible situation by what seemed to be a xenophobic drive” to take the country out of the European Union and “deny access to a much-needed labour force”.

The industry veteran, who founded and chairs Crerar Hotels, told The Herald: “I find myself more furious by the day on how predictably short-sighted it was for those who chose to ignore simple obvious facts and the inescapable consequences of the ‘get Brexit done’ decision to halt migration.

“There never was a position, certainly in Scotland, where EU workers were taking jobs or undercutting the wages of the indigenous UK labour pool. The fact was, and remains, that we simply don’t have enough people in our country for the work that needs done without immigration. The UK Government stance on pushing encouragement for unemployed [people] to relocate ‘where the work is’ is child-like in its simplicity – seeking families and communities to abandon what little they may have in their home environment without any sort of provision to support them to do so is wasted words given only as sound bites.”

Mr Crerar said an inability to find enough staff, rather than a lack of demand, had meant Crerar Hotels had to run “light on occupancy” last year.

While highlighting his group’s resilience, and noting it was “paying whatever it takes to make sure” it had people “committed to the business”, he warned that others in the sector would “fold or, at very least, shrink”.

Mr Crerar said: “With pockets of exceptions, locally, Scotland had an effective zero unemployment rate – the Highlands and Islands in particular found sourcing labour and specifically seasonal labour a near-impossible task before Brexit. Now, post-Brexit and following the return home of most of the EU workforce, across the UK it’s now impossible in true terms to source enough labour – skilled or unskilled – to deliver on the services businesses like ours must provide to be a success. Our hotels ran light on occupancy last year not through lack of demand but simply as, irrespective of wage levels offered, we were unable to employ enough people to fully run each business – an experience that we [in] the hospitality sector have all cried tears of real frustration over.”

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The hotelier, who has with chief executive Chris Wayne-Wills been driving heavy investment in Crerar’s remaining seven-strong portfolio of four and five-star hotels and inns following disposals, gave his views on the Brexit effect as the company published results for the year to March 27, 2021.

Mr Wayne-Wills, who became chief executive in April 2020, expressed his view that Crerar Hotels had fared relatively well compared with some competitors in the 12 months to March 2021 in limiting operational losses before interest, tax, depreciation and amortisation to £686,000. The year to March 2021 featured extended periods of closure and restrictions which limited trading when the properties were open.

Crerar Hotels’ turnover dropped to £5.49m in the year to March 27, 2021 from £15.5m in the prior financial year, and its pre-tax losses widened from £1.917m to £2.425m, after £2.595m of support through government grants and the UK taxpayer-backed coronavirus job retention scheme.

Asked about the likely pre-tax outturn for the financial year ending next month, Mr Wayne-Wills replied: “The losses won’t be anything like the losses that we are talking about here [for the year to March 2021]. I think it would be really the year ending [March] 2023 and the year ending 2024 we are really on a ramp-up...to optimal performance.”

Crerar’s portfolio comprises the Loch Fyne Hotel & Spa in Inveraray, the Oban Bay Hotel, the Isle of Mull Hotel & Spa, the Deeside Inn and the Golf View Hotel & Spa in Nairn, as well as Thainstone House in Inverurie and The Glencoe Inn. The group employs nearly 250 people.

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Mr Wayne-Wills highlighted the group’s focus on “low-key luxury” and on quality.

Commenting on the five hotels and two inns retained by Crerar, Mr Wayne-Wills said: “Those businesses were very much the ones we believed could be repositioned, could be a more premium product, and obviously where the market could sustain the types of rates we would charge to deliver that level of service and to be able to reward the teams with industry-leading [pay] and benefits.”

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Noting there were employees at places such as Glencoe earning an average of £15 an hour, and observing this was well above the national living wage, Mr Wayne-Wills said: “It basically costs what it costs to recruit people and get the right people.”

He revealed Crerar Hotels was still seeing “some really good” staycation demand, while also observing a “snowballing” of bookings from international visitors.

Declaring Crerar Hotels was “keen to see international travel return”, Mr Wayne -Wills said: “The North American market is really critical to us…There are bookings coming through from spring and more as we get [to] early summer, post-Easter etcetera – it is almost snowballing as a trend as the year continues. There are different levels of predictions. It is all about those future levels of restrictions and risk and possibility of future variants etcetera.”

Mr Wayne-Wills highlighted Crerar’s investment in spa developments at its Loch Fyne, Golf View and Isle of Mull hotels.

The Deeside Inn, near Balmoral Castle, is undergoing a major refurbishment which is due to be completed in May. The inn is being renamed The Balmoral Arms.

Mr Wayne-Wills said he sees a “bright future for the company”.

In the context of the UK Government’s Brexit, Mr Crerar flagged the importance to business and the economy of growth in the labour force amid the recovery from the pandemic.

He said: “Without labour force expansion, standing still and holding ground is now the challenge when the natural instinct of business and the economy should and must be to look for growth. Today’s business environment is like climbing on ice in wet socks with the team-mate who took your boots and crampons squawking false encouragement like ‘innovate’ or ‘just pay more’. Sure, Crerar Hotels will innovate in every way it can and frankly we are paying whatever it takes to make sure we have people committed to our business.

“We are lucky – we prepared and built resilience for Brexit but we know that many of our hospitality colleagues didn’t or couldn’t. These businesses will fold or, at very least, shrink with the grim and genuinely unwelcome reward for the survivors being, maybe, a chance to find displaced employees willing to join a survivor’s team. We are now living within a ‘Lord of the Flies’ policy or a form of quasi-economic cannibalism – that can’t be good for anyone, even the survivors.”

And he highlighted his frustration with the Brexiters.

Mr Crerar said: “Those standing with puffed chests about ‘getting Brexit done’ have yet to say or show how the UK might benefit. Their infuriating chants are classic ‘bruhaha’ distraction tactics to mask the obvious damage that has been caused and continues to be caused to business in the UK, particularly Scotland – and, more specifically, hospitality.”

Contemplating the impact of the coronavirus pandemic and looking ahead, Mr Crerar said: “Our strategic ambitions are simple. We want to operate the very best hospitality businesses wherever we have a hotel or inn, and to do that we must be the first choice employer in that location. Covid has been a kick in the guts and we had to use capital reserved for development to protect our teams and business during the worst of the pandemic.

“Even with that hard kick we are still very much on plan, if a little delayed, and with the completion of The Balmoral Arms, formerly Deeside Inn [in] Ballater, in May we will have seven hotels and inns at AA four and five-star standard.”