CELEBRATING 25 YEARS OF BALBIRNIE

ELECTRICITY WITH PAINT, at Balbirnie House

This week my wife Gaynor and I visited Archie Forrest, Scotland’s most renowned contemporary Colourist, in his Glasgow studio. We returned back to Fife with 6 framed Multimedia originals of Balbirnie House. These are all now heading into secured storage until the artist is happy with final touches on a further oversize oil painting, which remains sat in place on his easel today. 

Here's the easel, with the edge of the frame itself. 

One fine day in the not-too-distant future, all 7 works will combine together and install in Balbirnie’s Drawing Room, which is to be re-modelled in advance. This is something which we’re going to take our time with and not rush, as that part of the journey is in itself also intended as a most joyful process.

This is where the big painting has been designed to go:

The end result is going to be two individual Multimedia works, and a wall of 4 Multimedia works centred with the main oversize oil painting, which measures a breathtaking 1.75m x 1.5m, the most special project and installation ever seen in Balbirnie’s history. And we’re dating that comment from the year 1777.

The main wall is to be highlighted using a cutting edge overhead lighting feature. The entire 3 room dynamic of our West Room, Library Bar and Drawing Room, is therefore going to become something totally new, in a remarkably transformative way.

This has now been a project which has been 2 years in the making, aligned specifically as commemorating Balbirnie's first quarter century of hotelkeeping, 1989 all the way to 2014, the year in which Archie’s daughter Maya married at Balbirnie House.

The combined installation, is a celebration of all Special Events, a gesture of such sincere appreciation to all who have visited Balbirnie, and a wonderful acknowledgement of all those who have worked here over the years.

After recovering some composure having seen the big oil for the first time yesterday, I said to Archie, 'welcoming those who worked at Balbirnie over the first 25 years back to the house, and walking with them through to the Drawing Room to show them all this, well that'll be quite something'.

Multimedia original for main oil painting:

Artist Biog highlights the memorable phrase, 'Electricity with Paint'. 
Well all we can say, is just wait and see how this has translated into the Balbirnie oil painting. 

We now have images of the main painting, but these won't be used for anything other than showing to our pals, until the Drawing Room project completes.

Walking around the easel to see the oil for the first time? Gaynor exclaimed 'It is sooooooooooo beautiful', and all I can say is that these are memories of a lifetime. The painting is absolutely remarkable, jaw-droppingly beautiful.

To stand in the very place it was created, was an experience we'll never forget.

To see such a painting of Balbirnie left us speechless, even more so, being in the actual place where it was created, let alone beside the artist himself. 

Many future visitors to Balbirnie, will certainly be pausing to view the collection, with much contemplation and joy. Many Special Event clients will clearly wish to have their photographs taken beside the collection.

As an historic note, the main wall of the collection is to be fronted by our existing Drawing Room Trotter desk, which is the only single piece of furniture we have, which is unique to the original Balbirnie House. History and timeless classic, meets the future.

Here's the desk, in current position:

It has also been amazing to contemplate the evolution of the scale of the project. Having agreed at outset that we would have one solitary original to commemorate the 25 years, this was achieved with the Multimedia work which all working at Balbirnie helped us to choose in summer 2016. 

In turn the spirit of generosity and ambition from the artist, expanded to 6 originals, plus the moving from original scope of one A4 size, to the oil of 1.75 metres by 1.5 metres.

Archie Forrest contemplating the wall:

And the way in which aspects have evolved have certainly underlined a real lesson in life from the artist, there’s never any point in setting out half-heartedly to accomplish any important task.

Whilst our initial suggestion was initiated as most heartfelt at outset, the project has evolved so significantly beyond our dreams, as it has been created by so much passion, and it is such a beautiful and vibrant celebration of a totally unique 25 years.

On behalf of all at Balbirnie over all these years, our most sincere gratitude to Archie Forrest. Our eternal thanks, and our blessings counted as always.

With Linda and Archie Forrest, in Balbirnie's Drawing Room. 
That was the day in 2015, that the oil painting inspiration was defined.

Nicholas Russell / MD Balbirnie

We have a 5 minute clip about this project, on our YouTube channel: https://www.youtube.com/watch?v=bGUg6Wr-rjo

‘STREETFIGHTER HOTELIERS!’

Our company policy at Balbirnie over many recent years, has been to always work with a very significant retained current account cash surplus. The pace of our ongoing reinvestment at double the rate of industry averages, is then dictated by the cash amount over and above the current account surplus, both existing and envisaged. This also provides security and underpins bulletproof credit ratings.

This is the only way to continue to approach the future.

Writing this blog in January 2016, there are obviously extraordinary challenges facing Hospitality.

-       National Minimum Wage accelerating at a 38.5% increase over a 260 week span, instigated by Westminster Tories without even consulting anybody in UK Hospitality.

-       Tourism VAT at vastly inflated percentages, when compared to all other EU countries, apart from Denmark. If VAT was a matter reserved to the Scottish government, we would now be at 5%, instead of the current 20%, and that would allow tourism and hospitality to begin to reinvent, further increasing eventual tax receipts.

I recall highlighting these two points in April 2016 with David Welch, one of the judges for the 2016 Scottish Hotel Awards, who said in reply, ‘don’t worry, you are a streetfighter hotelier, you’ll find the way to get by!’

Well, all I can say is that Hospitality character best reveals, when tested!

To these two main challenges above, we then add, The Dog’s Brexit. Mass uncertainty, and costs for food and beverage increasing, as things stand in a band somewhere between 10% and 20%.

The competitive threat from Airbnb to the hotel sector has also been dramatically underestimated, according to new research from Morgan Stanley Research.

“Airbnb usage has increased more than we thought it would and cannibalisation of traditional hotels has been higher,” it said.

Penetration rates among leisure travellers increased from 12% in 2015 to 19% last year and are forecast to reach 25% in 2017. Business travellers’ usage has also grown from 12% in 2015 to 18% in 2016 and is predicted to reach 23% this year.

Then comes the additional cherry on the challenging cake, with rises in rates now to be enforced in % terms which are leaving many hoteliers totally perplexed at the calculative methodology.

Those properties which have had minimal or non-existent investment back into the fabric of assets over recent years? Good luck one and all. And as all above combined circumstances converge into reality, many properties simply won’t be able to afford to continue to reinvest.

And regrettably, one of the further casualties of these circumstances, will be the scale of donations provided by Hospitality, for charities and great causes.

So, things are as they are. Those who don’t recognise the challenges, and act upon them, will struggle to survive.

Here are a few thoughts across the span of Hospitality, on how our management team at Balbirnie are going to endeavour to remain ahead of the curve, maintaining ability to reinvest, and continuing to assist so many charities and great causes.

Owner operators, remunerate yourselves in as humble a way as you can, don’t waste time on anything other than saving costs or creating revenue. Future forecast! Helpfully acknowledge that future client purchasing, will be more and more based upon what they can expect to experience. 
And of course, take the time to enjoy your own journey! 

Accountants, run your figures every Monday, know your exact cash positions, supplier accruals, and sales ledgers. Summarise monthly – management accounts, balance sheet, cashflow, debtor and creditor, VAT, PAYE and future core trade analytics.

Chefs and drinks purchasers, use purchasing and procurement mechanisms, get creative, use Scottish produce, screw down deals, pass on great value to customers. Your direct competition isn’t only the other restaurant down the street, it is very much the success of the formulated M &S two dinner meals for a tenner, including wine!

Managers, streamline, automate, digitalise, and now more than ever, get everything into providing our truly amazing warmth of welcome of Scottish Hospitality. The training standards you set, are certainly what you will get.

Marketeers, if you haven’t yet grasped the phenomenal power of digital, the necessity of in-house retained Data, and capability of online, the bus has already left! But don’t get stuck on computer keyboards and internet devices, fabulous hospitality is always at the very point of personal service.

For all us who dedicate our lives to working in the incredible world of Hospitality, never ever lose sight of one very special thing. The entire adventure on the hospitality rollercoaster, must maintain as being about ensuring that memories are always made of this. All the best from Balbirnie House.

Nicholas Russell / MD and owner Balbirnie House

Former #SHA Hotelier of the Year

TIME FOR SCOTLAND’S HOSPITALITY SECTOR TO RAISE THE GAME

(Article penned for one of Scotland's newspapers. Edited version publishes 27th December)

Bank of England Governor Mark Carney has stated this week that Britain is in the midst of ‘the first lost decade since the 1860’s – and on a 10-year moving average basis, real wage growth has collapsed dramatically over the last decade, at a rate and consistency not seen since the 1860s. Wages aren’t growing because the overall economy itself is struggling to expand.

Writing this article on December 7^th, we’ve seen on our main Balbirnie Twitter feed today, that our local MP Peter Grant is highlighting the ongoing Supreme Court Brexit case, saying ‘an Ardent Brexiter tells committee, unprompted, that the pound has plummeted by 20% since EU referendum’.

So what does all of this mean for Scotland’s Hospitality sector?

At a base level, alcohol pricing is going up by at least 10%. Drinks suppliers haven’t applied that sudden increase yet, as they have recognised our sector has already sold Christmas on pre-agreed pricing. The rise will begin in January.

Food pricing is already accelerating. Broadly speaking we have the rise envisaged in a band between 15% – 18%. We’re rather stunned to say that the vegetable sector appears to be at 25%. Fish and butchery are doing best to hold, but categorically pricing is going up in January. As an extremity, one supplier has quoted a 40% increase in the cost of traditional Smoked Salmon, thank goodness at Balbirnie we have the ability to make our own in-house!

In combined summary these are not costs which Hospitality can pass onwards to customers, in what is as always a highly competitive marketplace.

Additionally, as we see these phased increases, they will also apply in supermarkets. So that means the disposable cash in the customer pocket, has already reduced.

According to latest research from accountancy firm Moore Stephens, a total of 5,570 restaurant companies have at least a 30% chance of going insolvent within the next three years.

The sharp fall in the pound since the Brexit vote has obviously added to the pressure on the sector by increasing the cost of imports for restaurants. The UK imports 48% of its food, and many hotels and restaurants rely heavily on imported food and wine.

Furthermore, UK Hospitality and Tourism sectors are still contending with prevailing VAT at a rate of 20%, despite massive UK-wide cross-party MP support for a realignment to the same ballparks as other EU countries. This ‘rather frustrating situation’ has sadly now been ongoing for many years.

In 2015, Chancellor George Osborne enforced a phased 5 year 38.5% rise in National Minimum Wage rates, actioned without even consulting anyone within the UK Hospitality and Tourism Sectors. This is already in very firm progress, accelerating towards 2020, and it is already causing challenges across the entire span of Hospitality, as that 38.5% rise also certainly can’t be passed onwards to customers.

It is crystal clear that what now already exists, and what lies ahead for Scotland’s hospitality sector, is going to be a test of character. In order to survive and thrive, hoteliers and restaurateurs are going to have to examine every single component of every single aspect of what we do.

It is pertinent that us Scots have a well-deserved worldwide reputation for our canny inventiveness. As we approach the end of VisitScotland’s 2016 Year of Innovation, Architecture and Design, we can certainly look ahead to 2017, with more continuity in relation to Innovation. As always, #ScotSpirit is required in an abundance.

Kindest regards from the geographic heart of our amazing Kingdom of Fife, the happiest place to live in Scotland 2016.

Nicholas Russell / MD and owner Balbirnie House

Former #SHA Hotelier of the Year