THE LIGHT AT THE END OF THE HOSPITALITY TUNNEL

Our sincere gratitude to everyone who has visited Balbirnie House since we re-opened. Delivering Bistro al Fresco was a summer 2020 we'll never forget, and when we moved back inside to open 'Food in the Woods' in our Millennium Ballroom, we were truly on a roll, until we were placed under all ongoing and enhanced, accelerating Tier restrictions. 

Thank you to all who have encouraged us, and those who have sent us a never-ending ongoing stream of messages of support. This has literally meant the world to our brigade. 

The scale of challenge across the span of Scotland Hospitality was already epic beyond belief, and then came the announcement last week, of a further 3 week Tier 4 Lockdown, to begin on Boxing Day. 

In breaks between yesterday's sessions running The Pass in our main kitchens, I thought I'd share a few statistics on a thread over on our main twitter feed.

It's easy to gauge reactions, so today's Blog post is an expanded and simplified adaptation of the thread. 

Our initial March 2020 Lockdown was a £1M hit. We are now estimating a further 250k loss, trying our absolute best to trade during all imposed Tier restrictions, in the timeline July 2020 to end December 2020. We estimate that the new 2020 Boxing Day 3 week Lockdown, will cost a further 130k. This now totals a quite staggering 'differential' compared to where we would have been if Covid hadn't happened, of £1.38M ... So let's hope that it's a once in a century circumstance!

As we moved through summer 2020, we were very fortunate indeed to receive Scottish Enterprise PERF (Pivotal Enterprise Resilience Fund) grant assistance of £85,000 - which now equates to 6% of that differential. A drop in the ocean, therefore. 

2020 financial cover has been arranged by company directors. If we completely forget about where we would have been if Covid had never happened, and instead only consider our net position today, this is covered by the loss of previously accumulated cash reserves (which were held for a very, very rainy day), a new £300,000 CBILs loan, and a new £200,000 overdraft facility. 

But there is now light at the end of the hospitality tunnel, specifically as the Covid vaccine rollout has now initiated. 

It is absolutely staggering in all contexts, but we are now holding bookings for 190 weddings at Balbirnie House, in 2021 alone. We cannot wait to resume normal trade. 

Simply put, it's now a case nationally, of what remains of the Scotland Hospitality sector, somehow being able to sustain itself until being able to trade normally again. 

Perhaps it's the case that as vaccinations are being given to those most vulnerable first, then those over 80 years old, then those over 75 years old, and so on, that Tier restrictions can similarly and quickly reduce in a way which is ratcheted to the vaccine rollout? Until then reaching the point where we once again reach totally unrestricted trading. 

Having traded through Tiers, we now know that losses are incurred in our circumstances specifically, for illustrative purposes: 

Tier 1 £500 per day

Tier 2 £1,000 per day

Tier 3 £2,000 per day

Tier 4 (suspended trading) £6,400 per day, gradually reducing after 3 months to £3,300 per day

Whereas as a generality, if we are able to deliver unrestricted trading, we usually generate positive EBITD (Earnings Before Interest Tax Depreciation) with an annual average of between £1,100 and £1,350 per day. And it is possible that this may increase to circa £2,000 per day when we fully re-open, as our diary is so busy. 

Without doubt, we're incentivised to start trading normally again as soon as is possible, so we can also begin to make inroads into the negatives experienced in 2020. It will certainly take us a few years to get back to where we were. 

Scotland's entire Hospitality sector is now awaiting a promised update from Scotland's government, setting out new financial support measures. It is clearly the case, that the sector needs to be supported between now and the resumption of unrestricted trading.

The full overview is very eloquently defined by Marc Crothall in an open letter from The Scottish Tourism Alliance to Scotland's First Minister. 

In the meantime, as we are entering Tier 4 on Boxing Day, we're now going to take the 3 week opportunity to deliver a Takeaway, hereby christened earlier this morning by (Duty Manager) Lewis McNab as "FEAST IN THE FOREST!"

Whilst otherwise closed and operating in suspended trading, our wedding planning department are setting up Zoom Virtual Special Events office beside the 2020 Long Gallery Christmas tree. It's going to be a lovely office! 

Traditionally, the days immediately following Christmas, and into the beginning of The New Year, are always the very busiest of the year for incoming new wedding enquiries. Our very best wishes to everyone who gets engaged over the 2020 festive season. 

Nicholas Russell / MD Balbirnie House