Amy Macdonald sings the praises of flagship hotel as Town House bounces back

By ERIKKA ASKELAND
Published on 19/07/2012 00:00

CELEBRITY guests and cocktail sales at Glasgow’s Blythswood Square Hotel have boosted turnover at Peter Taylor’s slimmed-down Town House hotels group.

Although the company still booked a pre-tax loss of £1.5 million in the year to 31 October, this was significantly down on the previous £2.3m loss.

Revenues were up 56 per cent to £9m thanks to the company selling 80,000 cocktails since the Blythswood opened its doors. The hotel received rave reviews on social media sites from celebrities such as singer songwriter Amy Macdonald on Twitter.

The latest accounts reveal the Town House Collection has emerged from what executive chairman Taylor described as a “perfect storm” during the recession and the £20m transformation of the RAC Club in Glasgow into the Blytheswood hotel and spa.

The company sold three of its hotels in Edinburgh in 2010 for £10m. The latest accounts, seen by The Scotsman, confirm the cost of offloading the hotels and restructuring the company came in at £507,000.

Without these exceptional costs, the firm dramatically improved the operating profits on its continuing operations – now the Bonham in Edinburgh and
 Blytheswood
 Square – from being £237,063 in the red last year to £1.4m in profit this year.

Town House also confirmed that it renegotiated its debt with Lloyds Banking Group in May 2011, with net debt reduced to £26m from £35.1m in 2010. The debt is repayable in tranches over the next five years.

Taylor noted the deal with Lloyds “brought to an end a long period of financial uncertainty” after a £15.2m payment due this year was delayed.

The firm is also seeking to reclaim full recovery of costs from insurers after a wall collapsed in 2007 during the construction of the Blythswood, which resulted in delays in the hotel’s opening.

As a result, the hotel has only been fully operational since October 2011, which the firm said was “significantly” later than it had originally envisaged.

The company has reclaimed £200,000 from the insurer, according to the accounts, but it has estimated the costs “directly attributable to the wall collapse” as close to £3m.

Blythswood Square has now completed its first year of trading and the firm said it grew turnover by 87 per cent to £6.8m and made a profit of £992,000 thanks to food and beverage sales and the spa, as well as a series of special corporate events featuring Kofi Annan and former mayor of New York Rudolph Giuliani. In Edinburgh, the Bonham has benefitted from a refurbishment of its lobby and public areas with the addition of a small bar now licensed for serving alcoholic drinks as well as afternoon teas.

Taylor said: “We are genuinely delighted with the performance. The business is holding up very well. It takes three years for a business to stabilise. We will see further growth this year and into next year. We look forward to substantial continued growth.”

He added that, since its opening in 2009, the Blythswood now employs 184.