Scots island resort hotel joins trailblazer in paying living wage

0 Auchrannie Resort managing director Linda Johnston, who helped set up the hotel in 1988 A hotel on a Scottish island has become only one of two such businesses in Scotland to transform itself into a real living wage accredited employer. The award-winning Auchrannie Resort in Brodick on Arran – which is Scotland’s first employee-owned hotel – joins the Scalloway Hotel on Shetland, which introduced the change in January 2016.

The move means all staff at the Auchrannie Resort aged 18 or over will be paid the real living wage of £8.75 an hour – higher than the UK government’s national living wage of £7.83, which applies only to employees aged 25 and over.

The resort was established in 1988 by Iain and Linda Johnston as a 12-bedroom country house hotel.

But it has now expanded to include two four-star hotels, a spa, 30 five-star self-catering lodges, two leisure clubs, three restaurants and a play barn. Gordon Hay, the hotel’s business development manager, said the pay hike would bring a host of benefits to the hotel and the island.

The pay increase, which will cost the hotel £260,000 in its first year, is partly financed by efficiency targets.

The hotel is in the early stages of operating along the “John Lewis” model whereby the 180 staff will receive an annual profit-share dividend.

“We want to set an example to other businesses,” Mr Hay said. “We also want to demonstrate to young people that hospitality is not necessarily a low-paid industry.

“We are keen to work with local education authorities and colleges too. Another reason for doing this is to attract more people on to the island to work.

“Arran can be seen as a bit of a remote option.

“Also, the wage increase has the potential to stop people thinking that when they turn 18 their only option is leaving the island. We are offering them an alternative and saying there is no reason to rush off.”

Mr Hay added the hotel becoming a real living wage employer was unconnected to it becoming employee-owned.

Scotland has more than 400 living wage employers.

Willie Macleod, executive director of Ukhospitality Scotland, said: “This kind of decision cannot be taken lightly by hospitality businesses when wages are our members’ single biggest overhead cost. In a labour intensive industry, even slight changes to payroll costs have considerable effect on margins.

“This means an immediate shift to the accredited living wage is not commercially possible for all businesses at a time when other overhead costs are increasing at a rate faster than inflation.”