BALBIRNIE HOUSE AND THE HOSPITALITY MIRACLE!

A few days ago, a single tweet on our main twitter: 

Over 30,000 Impressions!

So I thought it would be relevant to expand on this with today's Blog post, because where I am writing from, in the capacity as Balbirnie's managing director who also has the working responsibilities of finance director, it is undoubtedly the case, that all combined circumstances are certainly a hospitality miracle. 

After the initial March 2020 lockdown Scotland Hospitality was only able to re-open with restricted social distanced trading on July 6th 2020. Many hotels however, said they would only re-open if they could trade in an unrestricted way, and therefore they have remained shut, and still as of today they don't even know when they will be able to re-open. 

Back in July 2020 hospitality thought that it would perhaps be a few further weeks of delay, and here we are now, 9 months later, with still no sight of re-opening dates. 

I cannot begin to say how important it has been for Balbirnie House to have opened on July 6th 2020, and then continued onwards doing anything possible to keep going and fighting for our very survival, because if we had remained closed, I'm absolutely unsure if we would ever have been able to physically afford to re-open. 

To explain, from initial 3 month Lockdown: 

So, if we had closed in entirety, basically, for an entire year - the accumulated loss would have been somewhere approaching £1.6M - and in endeavouring to borrow that entire sum using government-backed lending, we would have needed to satisfy very specific lending criteria, in being able to prove to our bank that we would be able to repay that amount within the 6 years which are provided via CBILs. Proof of ability to repay, via financial forecasting and cash flows, as then signed off and agreed with the professional understanding and opinions of company auditor. If we had fully closed, we would no longer have any future diarised wedding and special event business, so we wouldn't even have been able to start any financial forecasting, let alone defining how we could begin to make an additional annual bank repayment of £320,000 plus Interest!!! 

And these comparisons dear readers, are situations in which many hospitality industry colleagues are now finding themselves in. Closed and unable to afford to re-open. This is why there are already specialists offering help in advising hotel owners how to begin to 're-purpose' their hotels. I would imagine that many smaller hotels will revert back into becoming private houses, and larger hotels will be converted into flats.

And it's not even as simplistic as stating it at what would have been £1.6M, because that's without even additionally factoring what would be needed to be made in terms of reinvestment, in necessary ongoing repairs, refurbishments, and renewals - these never stop at Balbirnie House. In reality, that figure would therefore have been nearer £2M ... 

I am absolutely shocked to the very core of my being to say this, but since the March 2020 Lockdown, many Scotland hotels and hospitality business owners (with Rateable Value above 51k), have literally only received circa £30,000 in financial business support. It frankly defies belief. There has been no equivalent whatsoever of furlough for businesses, and owners have needed to somehow continue to endeavour to pay all ongoing costs. Politicians talk about giving support, the sentiments are expressed, but the reality is truly, absolutely appalling. Near non-existent. And it is against that backdrop that we have somehow traded our way through. 

It is even worse, across the span of the entire wedding industry, many businesses have had nearly zero financial assistance, and many individuals have been basically left to fend for themselves, supported only via Universal Credit. 

Setting aside a late summer week on a secondment project elsewhere, since re-opening July 2020 I personally haven't been able to justify taking a day off work. What I have done is ensure I've maintained IronMan training, getting out in the fresh air every day, with some music on the headphones has given very valuable thinking time, wondering as always what I can do to best support brigade colleagues, and do our collective best for community. 

In the immortal March 2020 words of our (three decade long relationship) highly valued insurance broker Graeme Christie of Marsh Commercial, 'For hospitality, this is going to be the survival of the fittest!' Back then of course, we were only contemplating a closure of 'up to 12 weeks', nobody had any idea it would become a year, and longer! 

So instead of the £1.6M loss, we consolidated our finances in summer 2020 with a new 200k overdraft, and a 300k CBILs loan, took the pain of 4 calendar months of lockdown and loss of all revenue in what are traditionally always financially productive months, and then re-opened into restricted trading, but unable to deliver for large weddings. That was time therefore, for Balbirnie's brigade to think out the box! 

Summer 2020 Bistro al Fresco was amongst the most enjoyable Hospitality we've ever seen at Balbirnie House. We started by saying 'We've got 10 gazebos, there's a dozen of us on duty, and we can only bring more colleagues back to work, if we are busy enough to justify this!' 

Within days we were catering for up to 300 diners per day, with all new systems delivering App safety and records, in conjunction with 2 metre social distancing. We were absolutely staggered at the level of local community support. 

Having also paid the many re-opening costs, we were soon back to actually almost breaking even, from a standing start! In all contexts, that was a quite incredible circumstance.

In designing al Fresco f + b systems which were created for one kitchen and 100 daily diners, managing the process of accelerating to one kitchen and 300 daily diners, this was a lot of hospitality fun, many classic Balbirnie dishes blending with multiple new offerings. I started operating 'The Pass' on day one, this is the area in which we finish food presentation, then tray up ready for service. Very quickly we were rolling at one outgoing tray per minute. First time I've ever worked in shorts!

Into September 2020 and the end of summer meant basically, shifting Bistro al Fresco inside, divided between our Orangery, and 'Food in the Woods' in our Millennium Ballroom, all with 2 metre social distancing. 

This also hit the ground running, and we were on a roll until we needed to close to non-residents after 6pm, and stop selling alcohol unless it was into hotel bedrooms, or what we then created outside, 'The Courtyard Bevvy Zone'. 

All ongoing restrictions then began to hinder basically, everything. December 2020 was the absolute worst of all combined possibilities, huge restrictions, no alcohol sales, inability to trade at night, but with all bills to pay. It therefore went down as our worst operating month in history. And then, it got even worse, 'You need to shut down again on Boxing Day!' Hardly any notice, anything that we could have delivered over New Year, cancelled! 

From a financial perspective, it was then either, here comes 2021 so: 

- Shut the doors, maintain 24 hr security and start losing 5 grand a day again, or

- Offer Takeaway, maintain 24 hr security, and maybe we might end up losing a significant amount less than 5 grand a day. 

So, that's when we stepped on up for New Year, and into another new gear! The Balbirnie House takeaway opened on 27th December 2020. What we didn't say at that point, was that we had been contemplating this for months, and whilst chippie batter recipes are always trade secrets, we had absolutely nailed our new fish batter. To perfection! 

And what happened in the following week then left us completely lost for words. 

- To our astonishment, by introducing Takeaway, we were therefore subsequently able to make our way through January 2021, and 'only' lose 2 grand a day, and that pattern continued through February, boosted by selling 2,750 Monday to Thursday extreme value vouchers, a campaign which has repeated again in March. 

Since re-constructing our finances in summer 2020, we therefore made it to March 2021 without accessing new lending, but have now needed to introduce a further 100k to support cash flow. That 9 months without borrowing more money, that was our hospitality miracle. 

We thank our local Fife community for supporting Balbirnie House through these many challenges, we have been truly astonished to see such ongoing support. 

We thank everyone who has continued to hold wedding bookings. Since the beginning of Lockdown 1, we've only had 12 wedding clients who could not continue to hold bookings, everyone else has stayed with us and kept their bookings, albeit in a 30 phase process of management which has been the most profound hospitality challenge that we have ever seen. Many clients have needed to move dates once, twice, three and even four times. 

Incredibly today, we now have verging 300 future weddings booked. 

As we continue to wait for dates and numbers for unrestricted trading, our future diary and all bookings are at their best in history. To feel that level of support physically there for the future, is what drives determination and the absolutely committed desire to survive, and not only to survive, but to make sure that she ... Balbirnie House ... is ready and waiting for our clients, in as best shape as she has ever been presented to in history. (We are now finalising complete refurbishments of seven of our thirty-four bedrooms and bathrooms, so that when we do open, we are able to open all bedrooms presented to levels which are pristine.) 

We count our blessings that we have been able to keep our wedding planning team in place, to manage all of this incredibly challenging ongoing Special Event process. 

I can't say that things have been easy operationally since we re-opened in July 2020. The challenges we have been through have been the making of many in our brigade, certainly eye-opening as well. We've also seen multiple members of the brigade departing, citing personal circumstances and the generalities of the many mental challenges arising from the pandemic itself. Our thoughts with one and all. 

A massive thanks to our suppliers, many of whom have gone to extraordinary lengths to help us, amongst the angst of their own supply chain challenges as well. 

And a very special thanks to our HSBC Business Banking Relationship managers, Scott Shankland and Steve T Cummings. Together with Mark Gibson, partner at EQ Accountants. 

Many of the unfolding circumstances we are now hearing from prospective new wedding clients are so sad, there are literally no words. It pains me beyond belief to tell you this, but due to near total lack of relevant government financial support for what is going be more than a year, across the span of hospitality and wedding sectors, there are many couples who are now holding wedding dates within hotels and wedding venues which will never be able to afford to re-open. There are many couples who are now very quickly realising that this is very sadly the case. Our thoughts with all those who are finding themselves in that situation, and please do get in touch if there is anything we can do to arrange a replacement future date at Balbirnie House. 

And to conclude on a positive, we cannot begin to imagine the joy, in seeing weddings which have needed to postpone dates, now go ahead. Bring on the dates and numbers! 

All best wishes, 

Nicholas / MD Balbirnie House