High-profile collapses spark fears of further failure

The hotel, which sits in picturesque woodland next to the River Clyde in Bishopton, is continuing to trade while administrators at EY-Parthenon attempt to find a buyer for a venue that has been a popular haunt for leading musicians and footballers since opening in 2004.

A buyer is being sought for the site formerly occupied by Brian Maule.

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Of course, Brian Maule and Mar Hall are not the only Scottish hospitality businesses to have struggled in this punishing economic climate. The whole industry has been under enormous, continuous pressure since Covid broke out in early 2020, with the frustration of lockdown being followed by a litany of major economic challenges.

But the fact that two of the best-known businesses in the west of Scotland have failed will surely have set alarm bells ringing throughout the trade.

While every business is unique and will face its own particular challenges, there are areas of commonality to the toils of Brian Maule, Mar Hall, and many others in the sector.

Unprecedented hikes in energy bills, steep rises in the cost of goods and labour, a consumer price inflation crisis, and rocketing interest rates have combined to create a lethal cocktail for operators of all kinds, and it would be a miracle if the combination of these factors does not contribute to further business failures in the weeks and months to come.

“I’ve been trading as a restaurateur for over 35 years, and I’ve never seen a more challenging set of conditions than we have at the moment,” said renowned Scottish chef Nick Nairn, in an interview with The Herald’s food and drink writer Sarah Campbell, at the weekend.

Speaking as he and wife Julia opened their new restaurant in Bridge of Allan, Mr Nairn added: “If we don’t do something soon, we’re going to lose a big chunk of our hard-won business.”

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It should be emphasised that it is not only firms in the hospitality trade which are currently feeling the heat.

The pages of The Herald have in recent days featured many stories about companies in a broad range of sectors going under, after battling downturns in cash flow and being unable to restore trading to pre-pandemic levels. That trend is forecast to continue, with one expert warning that a “surge” of failures is looming.

Ken Pattullo, managing partner at restructuring specialist Begbies Traynor in Scotland, captured the situation when he said earlier this month: “Businesses are facing a perfect storm of challenges – as they struggle to recover from the catastrophic impact of the Covid pandemic, they are also now having to find funds to repay bounce-back loans during the worst cost of living crisis in living memory.

"What’s more, interest rates are continuing to increase, leading to unmanageable debt, and material and labour costs are also continuing to spiral along with rising inflation, the impact of the conflict in Ukraine and higher energy bills.”

When one sees the exhaustive list of headwinds set out in black and white, the challenge facing business owners must seem overwhelming.

Yet, in the case of certain hospitality businesses, these are not the sum total of the difficulties being faced.

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The Covid-enforced lockdowns of 2020 and 2021 caused a dramatic slowdown in spending by the corporate community, simply because the mandatory restrictions meant hotels and restaurants were closed or heavily restricted for large periods of time, and business travel was curtailed.

Now, although restrictions have been lifted and hospitality businesses have been able to trade freely for some time now, conditions are far from ideal.

Hybrid working would appear to be here to stay, as companies continue to allow staff to spend part of their working week at home. That means there are fewer people coming into town and city centres who could potentially spend money in restaurants on weekdays. Business travel, while rebounding, has still to fully recover to pre-pandemic levels.

These factors will certainly not have helped businesses such as Brian Maule and Mar Hall, which may well have counted on the corporate market as part of their trading models prior to Covid, and have been unable to rely on that market to the same degree since.

It is also important to note that the prevailing economic pressures are having an impact beyond the strain on company balance sheets.

Persistent economic uncertainty is also having a draining effect on the mental health of people who are worried about losing their jobs, and business owners who are concerned their companies may be unable to survive.

Michel Roux, the celebrated chef, cited the pressures of current life in the industry when he recently announced his surprise decision to close down Le Gavroche, the famous Mayfair restaurant founded by his late father, Albert, and uncle Michel in 1967, and which he himself has run for 34 years.

“The day-to-day pressure of running a restaurant is not getting any easier,” he said in an interview with The Times.

“Living through and coming back from the pandemic didn’t do my mental health any good. I feel for any young independent restaurateur opening up now. Brexit has put a huge spanner in the works in terms of supplies, staffing and costs.”

Pressure on staff recruitment is certainly familiar to Stephen Leckie, chief executive of the Crieff Hydro Family of Hotels, who worries about the impact on existing employees.

“We went into lockdown with 1,050 staff,” he told The Herald. “We currently have 850, and 60 or 70 vacancies at any one point in time, which means the pressure is on.

“The challenge of being short-staffed is that those staff who are here feel the pressure.”