Scotland NC500: Royal Hotel is set for refurbishment

The 103-room hotel, on the market at an asking price of £1.8 million, will undergo a programme of renovation with new owner Melville Hotels.

“With buying somewhere like the Royal, and with it not having anything done for such a long time, we’d like to try and do 20 to 25 rooms this winter and that is a quarter of the hotel done,” said Mr Melville. “Then you try and do a quarter every year and do it over four or five years.”

In the coming weeks there will be a “minimal refurb” before a summer stint and then an October shutdown before a fit-out team moves in for the winter.

“This year the guests won’t see where we’ve had to splash the cash because it is all behind the scenes,” he said. “Basically, there’s no roof in the kitchen, so you are up at £40,000 for that before we can even open. That £40,000 could’ve probably got me half a refit on ten rooms.

“So, the money spent this year I’m afraid the guests won’t see it, it will be back of house so that the staff have a better operational side. Walk-in freezers, walk-in fridges, that sort of thing.”

READ MORE: Melville buys Royal Hotel Thurso

The Royal in Thurso, which also has a 120-cover restaurant and a bar, joins the Royal Dunkeld, MacDonald Hotel, Kinlochleven, Grey Gull Hotel, Loch Fyne and Loch Long Hotel in Arrochar in the portfolio. Mr Melville has a rolling renovation programme for the properties.

“I’ve got my own small team who have worked with me for 20 years now. Originally we started buying properties and doing them up and selling them, now we buy hotels and my team basically three-quarters of the year is going round my hotels, living on site and painting them up.

“So, we have our own team for the en suite refurbs and bedroom refurbs.

"The money stretches a lot longer because we have our own guys.

“When I talk to other hoteliers, they are up at £12,000 a room refurb right now. We are less than half of that for the same refurb.

“The GMs [general managers] are really happy come the winter when I say right you’ve got £50,000 what do you need, they know that is equivalent to £100,000 or £120,000 to the average GM.

“Basically, we put the hotels on a cycle. Normally, the hotel has 100 bedrooms and a new bathroom should last you ten years, so you would do ten bathrooms a year and then in ten years you go back to the start."

READ MORE: Historic pub and inn on Scottish island up for sale

The most recent hotel was bought for an undisclosed sum from MGM Muthu of India and marketed by Drysdale and Company, and crowns the group on the country’s top tourist route, a handful of hotels since the journey started.

“The first one was Loch Long, just 45 minutes from Glasgow. That was an 80-bed we got off Lochs and Glens about seven years ago. That is us finished our final en suite, at an average ten or 12 a winter.”

Mr Melville has drawn from another business, which includes Kilts and Kocktails in Sauchiehall Street and the Bay Horse in Bath Street, as he has steered the hotels, and pointed the business towards leisure trade rather than coach trade.

“We have a high Glasgow trade in the leisure slot. I’ve got some cocktail bars in Glasgow so I’ve sent cocktail lists down, we’ve got hot tubs outside and stuff like that and the leisure trade has now become more prominent than the coach trade, which probably is your ideal scenario, being more leisure than coaching.

“The coaching is your backfill as such.

“We are at the stage we would like to hold some of the coaches and let the leisure come in. I see a lot of places in the NC500 are going a lot of leisure now and being bold as such and saying to the coaches, nah.

“They get a lot for what they pay for, let’s face it. A GM will tell you they know they’ll get a better spend and a better GP [gross profit] off the leisure trade.”

READ MORE: £20 million luxury hotel plans unveiled

He continued: “We went from Loch Long round to Loch Fyne round to the Grey Gull Hotel, just a small 27 bedrooms. The whole 27 bedrooms have been done and we are now bringing the levels higher by adding granite and marble into the bedrooms now, and hot tubs outside overlooking the loch.

“Then we went up to Dunkeld which we bought during Covid, which was something. It worked out perfect because the common areas in that hotel needed scaffold and platforms and we could not have opened that hotel without doing that, so we did it during the lockdown.

“Then we moved over just last year to Kinlochleven. We are right on the West Highland Way. We only have 11 bedrooms there but we have a dozen pods outside.

“Because it is such a small amount of bedrooms we did them really high end.”

Inside, “we are really impressed with the en suites, they are stunning,” he said, and outside “he views down there are spectacular”, adding: “The bar must have the best view in Scotland looking right up the loch.”

He is now preparing to expand the hotels business.

“We already have our eye on a few things which will be maybe next winter.

“We tried to buy in Ullapool before and it never came about. There’s always the number one place, Fort William, that’s where you aspire to, isn’t it?”

Q&A

What countries have you most enjoyed travelling to, for business or leisure, and why?

I’m a frequent Spain traveller for a couple of reasons, short flights for frequent short trips and the sun obviously. The Canaries for winter sun. I never do a big long holiday but try and do lots of weekends away. Generally just to chill sleep eat and relax. 

When you were a child, what was your ideal job? Why did it appeal?

As a kid I wanted to be a mechanic. I had the thought of repairing my own cars as my dad’s was always breaking down. 

What was your biggest break in business?

My biggest break was probably meeting a very unassuming guy at a party who turned out to be the owner of a chain of hotels (Strathmore) and helped me immensely. And still does.

What was your worst moment in business?

Covid and the Scottish Government's thoughts on business are constant worst moments.

Who do you most admire and why?

My dad was the man to admire. 

What book are you reading and what music are you listening to?

Not currently reading anything apart from live spreadsheets lol [laugh out loud]. 

I can listen to most music, to be honest. In the gym it’s GBX.  In the car it’s Radio Clyde or something easy listening. 

I box as a hobby and it really helps me.