Grey Street Hotel is undergoing a major refurbishment as part of a series of development plans by owners The Malhotra Group, which has “bold plans” for its leisure division as it targets the North East hospitality market.
The Malhotra Group had pledged to transform the Grade II-listed hotel, which was acquired by the Newcastle-based care, leisure and property group in 2013, several months after it was put on the market by administrators BDO with a £3.5m price tag.
The plans are announced in the firm’s latest accounts, for the year ended March 31 2016, which show how revenues rose across all the firm’s businesses to top £30m.
Group turnover rose by 9.8% to £30.15m and operating profit also rose by 25.5%, from £5.34m to £6.69m. Pre-tax profit, meanwhile, soared by 36.5% to £5.2m.
Within its leisure division, which employs around 249 people, the group owns and operate a series of bars, hotels and restaurants, including the Three Mile Inn in Gosforth , Osborne’s and the New Northumbria Hotel in Jesmond and the Backpackers Hostel in the city centre.
The firm said revenues rose within leisure by 13.2% to £10.8m and operating profit increased by 47.1% – despite increased staff costs and the arrival of new hotels and bar offerings across the city.
The company said: “It is particularly pleasing to note that the increases in both revenue and operating profit was felt throughout the vast majority of our sites.
“Occupancy levels throughout our hospitality sites fell by 2% in the year due to the level of additional new hotels that have come to the city centre market in the past 12 months such as Crowne Plaza, Hampton by Hilton, Premier Inn and Motel One.
“That being said we are already embarking upon a total refurbishment programme at Grey Street Hotel that will help provide much more of a boutique style offering when completed in Spring next year.
“And we will also be undertaking additional improvements at New Northumbria Hotel that will help support the marketing campaign we have planned for that site.”