It is an astonishing set of statistics, but during the 2022 and 2023 calendar years combined, Balbirnie House took bookings for 414 future weddings. Our sincere gratitude to everyone who has made bookings for their special day at Balbirnie House. Onwards we go, one very special day at a time.
Over and above, and beyond the scope of weddings, the hotel continues to provide the backdrop for private and corporate special events, afternoon teas, dinner, and residential stays.
Given we are so busy, anyone might be wondering why we are publishing new accounts today, which define a loss? This blog sets out why this is the case. Fundamentally the costs of operating in the entire Scotland hospitality sector are now more extreme and more expensive than ever before, and they are also now more expensive than operating in hospitality in England!
The harsh reality of exactly where things now are across Scotland's hospitality sector today, January 2024? Read via: At least 10,000 hospitality businesses operating without financial assistance.
The 2024 calendar year began with multiple very emotive business closures across the span of the UK hospitality sector, over on twitter (follow our progress on X here) multiple owners of restaurants in England in particular were stating at the beginning of January that they were of the categorical opinion that they could quite simply not afford to keep trading, as they envisaged that it is truly and absolutely impossible now, to make enough money to break even, let alone deliver any operating profit. The doors to those many businesses therefore were closed. With circumstances now very sadly seemingly worsening elsewhere in hospitality, by the day.
It is certainly the case that since 2020, the hospitality sector has been contending with a truly perfect storm of trading challenges. The financial hangover circumstances from the pandemic (in Balbirnie's case that was a previously well documented £1M hit in the first 3 months of closure alone), have subsequently met additional necessity for new CBILs support loans. Hospitality then saw a tripling and the rest of gas and electric energy costs, within which our in-house Environmental Taskforce continues to deliver new efficiencies as far as is possible to do so. There have been huge inflationary increases everywhere, and very significant increases with interest costs. Prevailing tourism vat at 20% is also considered extortionate by the entire hospitality sector, and all trade bodies and their requests for reductions are ignored thus far by both governments. Wage levels understandably keep increasing as always as well.
Check out the image archives, Balbirnie House in the Hotel News 4 years ago, how time flies! -
Fast forward and it is worth mentioning today however, that the England hospitality businesses which have already closed, have also successfully experienced the very significant benefit of 75% reductions with business rates, now fully applicable across the England span of two years. And still those businesses could not afford to continue?
Scotland however has not had any of these same reductions with business rates, and given the sum in question for a cash flow benefit for Balbirnie over two years would have been a quite staggering £172,500 I was recently asked to supply Balbirnie-specific information on this point for an article for The Courier. To go a further comment in the interim, whilst working in the Scotland hospitality sector today, it actually feels like the Westminster government is doing the very opposite of supporting the hospitality sector, and Scotland's government is in these terms therefore actually doing significantly even worse.
There are many Scotland hospitality operators who have already ceased trading. Perhaps Scotland's government considers it best for many hospitality operators to close, and thereby deliver no taxes at all? The lack of government support is astonishing. It is not platitudes that the Scotland hospitality sector needs, it is direct and ongoing financial assistance.
Is is against the above backdrop that we strive to continue with the task of stewardship of what we do, doing everything possible for present and future clients. And despite all challenges, we are fully optimistic at Balbirnie House, as to the future ahead. Balbirnie is rather unique as a hotel, in that we have a future diary which is already very, very well booked ahead.
Whilst normal countries have ways of financially supporting, incentivising and encouraging cultural heritage buildings, Scotland sadly does not. We work at Balbirnie House with an insurance value re-instatement estimate at £25M, with absolutely zero such government assistance, and the task of paying for all upkeep, maintenance and improvements, is our own welcome responsibility as well.
By way of rough calculation, and remarkably so, we have started 2024 with significantly more business confirmed and booked into our future special events diaries, than we have seen with total turnover in the accounting year now publishing. The task ahead as always, is how to endeavour to give every single visitor a wonderful time in hospitality, and still have enough left to pay all the bills! And stating the obvious, a small amount from every visitor needs to go towards the safeguarding of Balbirnie House as a category A listed 1777 national treasure.
So here we are today, and we've just published our latest annual accounts for the 2022/ 23 financial year which actually concluded at the end of April 2023, 9 months ago. These show that, inclusive of vat and with total financial turnover heading towards £5.5M we were almost 25% busier than in the previous year. We have certainly seen Balbirnie House provide the backdrop for an an incredible number of special occasions over recent years, even more so than in the previous very busy years. It is certainly also the case though, that up until the financial point 9 months ago, in that year our entire operating costs were marginally greater than our entire revenue!
The bottom line is a loss of £186,000 - and our company directors have needed to successfully arrange new financing to cover the losses. We are absolutely and fully appreciative that we have had the ability to arrange new financing, as we are well aware that so many hospitality industry colleagues have not been successful in these endeavours.
Whilst none of us has a financial crystal ball, we consider the future with optimism, and stating the obvious, for prospective future wedding clients making bookings for dates eg two years in the future, there has to be a belief that any business will be able to keep trading. Our focus on this is completely resolute, and not just on keeping trading, but retaining the constant ability to be able to keep on reinvesting back into the fabric of the assets as well. As minted as is possible to do so, for all of the future ahead.
Given accumulated awards history, eight best-in-world awards via Haute Grandeur global hotel awards, including Best Wedding Hotel in the world for the fourth time in 2023, and fifteen time annual recipient Scotland's Wedding Hotel of the Year, this all absolutely brings a further set of dynamics in wishing to keep everything looking at its best possible for the future, befitting the past but also looking into that future, and onwards we go with one very special day in hospitality at a time.
We are accustomed to publishing new revised annual pricing information each year. There is a lead time for circumstances. What happened financially in 2022/23 was driven by pricing and operational decisions taken in 2021/ 22, with final results then delayed by the timeline for publishing accounts. It is always fully, a 3 year story.
Working with decisions at Balbirnie House in many ways, is like turning a supertanker in the sea, it is not an instant thing, it takes time. Decisions now taken today may take at least 3 years to pave their way into published accounts.
In particular, I would like to highlight one section of the 2022/ 23 director narrative in the accounts, and I do so because it more accurately conveys the reality of today, as opposed to the financial circumstances from a year ago:
BALBIRNIE HOUSE HOTEL LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 30 APRIL 2023
The directors are optimistic based on current projections, and with management accounts showing a record-breaking first half of the 2023/ 24 financial year, that financial results to the end of April 2024 may show a return to profit. We suggest that it is conceivable that our company may now finally return to profit, four financial years after the negative financial implications of the pandemic lockdowns. We will therefore consider fast tracking production of our next annual accounts.
The above is self-explanatory. And the combined improvements in prospects today are certainly a result of massive contemplation from our management team, all systems under full ongoing appraisal and review, and with purchasing and procurement in focus as always. (I won't take more of your time with this blog post but if you wish to read more about this, within accounts Strategic Report we set out additional specific reasons as to why we are optimistic as to the future. Balbirnie House Hotel Ltd accounts of course are fully accessible to the general public via Companies House website.)
Hospitality workers are wondering today what it is that governments hope to see in the future? In amongst all challenges, at Balbirnie House we remain completely focused on ensuring that we are doing all that we can, to make sure that the decisions of today are continuing to deliver the stability and trading success of 3 years into the future, and beyond. Many blessings counted that across the span of our company management team, that there is a wealth of experience, a constant willingness to embrace evolution and new technology, and all driven by our desire to do our absolute best in delivering the warmth of welcome of Scotland hospitality.
Our sincere gratitude to all clients past, present and future. And onwards we go with the future.
All best wishes,
Nicholas
MD Balbirnie House
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