Luxury hotel records first loss in decade

Gleneagles Hotel received a £5 million loan to “assist liquidity” after recording its first loss in a decade.

The luxury Perthshire hotel, golf and spa resort was impacted by fewer international groups even before the pandemic took hold in Scotland.

The accounts, which cover a 15-month period to the end of March 2020, show sales of £66.4m and a pre-tax loss of £5.2m.

This compares to sales of £55.3m and a profit of £55,000 the previous year.

In his strategic report, managing director Conor O’leary said the loss was partly due to the 15-month period including three less profitable months twice.

However, he noted Covid-19 also led to fewer bookings at the start of 2020.

“The Covid-19 pandemic led to reduced demand at the start of 2020, particularly from group bookings, which had an adverse impact on operating profit during the period,” he said.

The pandemic led to the five-star hotel closing from March 23 last year until the middle of July. It shut again on November 13 and will reopen on April 26.

During the closures the company utilised the Coronavirus Job Retention Scheme to furlough the vast majority of its 967 staff.

It also received a coronavirus large business interruption loan of £5m to “assist liquidity”.

The accounts state Gleneagles Hotel will not require more funding for at least a year even in the worst-case scenario.

“The directors have modelled a range of scenarios, from full closure throughout 2021 to reopening with a strong summer season with only limited Covid-19 restrictions in place,” the report said.

“These show that the cash flows generated by the company will be sufficient to allow it to operate for at least one year without additional funding being required.”

Mr O’leary said the company had been well supported by its bank and was hopeful of better trading in 2021.

“During the summer of 2020 the hotel was able to achieve reasonable occupancy levels and operate profitably within the revised Covid-19 guidelines,” he added.

“This gives the directors confidence over the company’s outlook for the remainder of 2021.”

A multi-million-pound investment programme is ongoing. This has seen new meeting and event spaces open called The Billiard Room and Parlour; the reopening of the Strathearn restaurant; upgraded club facilities and the development of the hotel’s retail arcade.

The hotel has shown its gratitude to NHS workers. It will donate 365 free room nights every year for the next five years.

Gleneagles will also host the Senior Golf Open next year.

COVID IMPACT: Gleneagles Hotel will reopen on April 26 as restrictions are eased.