Priory Hotel moves to employee-ownership model

The staff at The Priory Hotel now own 72 per cent of the company. Picture: Malcolm McCurrach

Ownership of The Priory Hotel in Beauly, near Inverness, has been transferred to 46 staff members as its founder prepares to retire after more than 40 years at the helm.

After putting the business up for sale and considering a number of offers, founder Stuart Hutton decided to make the switch to an employee-owned structure to avoid a potential buy-out by a chain.

An employee ownership trust has been formed which will hold 72 per cent of the shares on behalf of the employees. Stuart Hutton’s son Kenneth will retain the bulk of the remaining shareholding, to demonstrate that the family remains committed to the continuation of the hotel, which has 39 bedrooms as well as a restaurant, bar and coffee lounge.

He will become managing director of the company, founded in 1972, and oversee its operation as his father begins to remove himself from the business. Some of the key management team will assume positions on the board and Kate Melens will be the hotel’s general manager.

Kenneth Hutton said: “My dad was at the stage where he was considering a step back from the business.

“A staff member had once mentioned employee ownership as a potential solution to this – it meant the business would be sold to those who know it best, and it wouldn’t be taken over by a large chain.

“The option stuck with my dad and when he felt like he had the correct management team in place, the time was right to begin progressing the buy-out.”

The transition to employee ownership was supported by Co-operative Development Scotland (CDS) and Highlands and Islands Enterprise (HIE) with the process managed by Ownership Associates, legal services by Anderson Strathern and accountancy support from Johnston Carmichael.

Hutton added: “The Priory Hotel is a huge part of the local community and a takeover by a large chain could have put jobs and company values at risk. By selling to his employees, my dad knows that the business he spent 46 years building is now in the hands of a loyal and invested team that wants the best for the hotel and the local area.”

There are around 100 employee-owned companies operating in Scotland, with approximately 7,000 employee-owners generating a combined turnover of around £940 million.

Sarah Deas, director at CDS, the arm of Scotland’s enterprise agencies which promotes employee ownership, said: “Stuart has spent over half his life building a successful and much-loved local business. By handing control over to a team that he knows and trusts, the hotel’s important standing in the community is protected, along with jobs and company ethos.”

Peter Allen, account manager at HIE, added: “Employee ownership is an effective way to drive business performance by boosting productivity, increasing employee engagement and keeping the company in the community.

“We would encourage anyone thinking about options for future structures to choose employee ownership to help build a more diverse and sustainable economy.”