THE hospitality company owned by renowned Scottish chef Bill Costley has declared it has emerged “fully” from the pandemic, as new accounts show the operator hiked turnover by more than 50% in its most recent financial year.
Costley & Costley Hoteliers, which owns the popular wedding venue Lochgreen House Hotel in Troon, reported revenue of £8.26 million in the year ended September 30, up from £5.35m, as the wedding market returned to full capacity following cancellations and postponements during Covid.
Operating profits held steady at around £1.3m, as the increase in turnover helped offset the removal of government support provided earlier in the pandemic.
And the company, which Mr Costley owns with wife Cath and son Andrew, said trading has picked up following a “disappointing start” to the current year amid the cost-of-living crisis, after the wedding season got into full swing.
Costley & Costley highlighted the difficulties posed by energy prices and other inflationary pressures but signalled its confidence in trading through the current challenges, though Mr Costley said higher costs are here to stay. He also warned the industry continues to be blighted by a “dearth” of staff.
Mr Costley, a classically trained chef who attended cooking school in Versailles, founded Costley & Costley with Cath in 1988, going on to establish a high-end portfolio of award-winning wedding hotels and country inns in towns and villages around his native Ayrshire.
But in recent years he has moved to trim the portfolio while stepping up investment to maximise the guest experience at the venues the company has retained.
During the period covered by the accounts, Costley & Costley sold Doonbrae, “virtually a domestic” property, for £1.3m and Ellisland House Hotel for £1m. And since year-end of offloaded the Brig o’Doon House Hotel, a popular wedding venue in Alloway, to Robert and Vivien Kyle’s RAD Hotel Group, in October.
The disposals leave Costley & Costley with a portfolio comprising Lochgreen, Highgrove House Hotel, Souter’s Inn, and Cochrane Inn, and the company is in the process of a significant capital investment programme across the estate.
Speaking exclusively to The Herald, Mr Costley said the challenges presented by Brexit and Covid in recent years have instilled greater discipline and cost control at the firm.
“We have actually tightened up a lot,” he said. “We have dropped our portfolio quite a bit, and the consequence of that is we are leaner than we were, but more profitable. The last two years have been £1.3m profit. It has been an education for us in the respect it has got us more disciplined, I would say.”
Mr Costley added: “My plan is do two or three [venues] well. I want to do them really great. With selling the Brig o’Doon it sorted our financial side out completely. We have virtually no debt.”
Mr Costley, who said he had not planned to sell Brig o’Doon before receiving the approach from RAD, added: “Sometimes in adversity it turns out for the better. Because of my age now I need to try and think of the future. I would rather pass over two or three businesses that are great. So, we are on course. We have got a beautiful extension currently getting done at Lochgreen, and we are getting all the bedrooms done and a new patio area at Highgrove.”
A major extension is being built at Lochgreen to provide a 70-seat cocktail bar and lounge, which will be ready in around five weeks, and Highgrove is being fully refurbished. A refit is also underway at the Cochrane Inn, which the firm hopes to reopen soon.
Costley & Costley is investing in its properties while the costs facing hospitality industry remain elevated. Mr Costley expressed the view that costs “will stay up” and said the sector continues to face an acute shortage of staff.
Mr Costley, who in the past has been critical of Brexit for its impact on staff availability, said: “There is a dearth of talent in the industry, there is no doubt about it. There are not enough people to go around.
“If you want really professional staff you have to pay through the nose for them. We hope we are at the top end, and at the top end you need to be consistently good, that is for sure.”
Costley & Costley currently employs between 160 and 170 staff, which is down compared with its pre-pandemic headcount.
Asked to comment on current trading, Mr Costley said weddings business was strong at Lochgreen and that the golf market was holding up very well, with Americans still flocking to Ayrshire for its famous links courses.
But he said the cost-of-living crisis has had an effect on the domestic market, with midweek trade affected as a result. He also said there continues to be less corporate travel as many people are still working from home.
Mr Costley said: “I think people are certainly aware of spending less.”
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