Running a luxury boutique hotel on the remote west coast of Scotland is real test of endurance. But Airds Hotel and Restaurant is proving to be one of the fittest and is continuing to grow both its reach and its reputation. We caught up with owner Shaun McKivragan to discover how he handles the ups and downs of operating the seasonal business following the hotel’s record 12 months of trading.
Despite Airds Hotel and Restaurant in Port Appin on the west coast of Scotland posting its best ever profit results in 2017, the last 12 months haven’t been without its challenges.
The four-star boutique hotel is situated on an enviable position in the Highlands opposite stunning hills and picture postcard-type scenes and this USP practically sells itself. The last 15 years owners Shaun and Jenny McKivragan have continued to invest in the business in a bid to beautify the building to match its surroundings.
And now it seems that this hard work and commitment is starting to pay off.
Reaching healthy levels of year-round occupancy and seeing a rise in profit this year to mark a record for the hotel, Airds has proved its robustness.
It hasn’t been all plain sailing however. Owning and operating a luxury hotel in a remote location such as the Scottish Highlands poses obvious hurdles – from hiring staff to getting word out about the business – but the McKivragan’s savvy approach and fluidity to be lead by consumer demand to key to its success.
And all of this from hospitality newcomers who until the opportunity to buy Airds Hotel arose had never even considered hotelkeeping as a potential business venture.
Prior to the acquisition in December 2002, Shaun owned a retail store while Jenny was a director of HR and when they discovered their much-loved holiday destination Airds was on the market, they decided to take the plunge and take over the business.
Sold by the Allen family off a guide price of £1m, McKivragan is the first to admit that it was a ‘leap into the unknown’. First the challenges of learning the ropes of running a hotel business and then throw in the difficulty of the location and the couple had their work cut out.
“We were naïve,” explains McKivragan. “We didn’t realise; it’s one thing going into hospitality, it’s another thing going in at this level and it’s another thing going in at this level on the west coast of Scotland.
“It was tough to begin with. But we worked through it. It was December 12 2002, the date is embedded in my brain!”
The hotel had previously been a favourite of the major hotel and food guides for the past 25 years so had a strong reputation, which brought with it a loyal customer base, but also a high level of expectation.
Plus despite a short time out of Relais and Chateaux during the first three years of ownership, the McKivragans muscled its way confidently back in the guide in 2005 and has been there ever since. Add this to the hotel’s inclusion in Connoisseurs of Scotland and Pride of Britain Hotels, and marketing is well covered.
McKivragan knows how crucial these three brand alignments are in bringing people to the hotel. “That’s where all our marketing goes, but with consortiums it’s what you put into it. You can be a member and pay your dues and then just sit there and hope it rolls in, but you miss out on opportunities. It’s a full-time job managing all three.”
This commitment is proving lucrative and Airds is continuing to post encouraging levels of trade, despite staffing issues and concerns with Brexit and the ongoing debate of Scottish independence. Every year turnover has increased during the last 15 years of ownership, but McKivragan adds it’s been ‘hard work’ and is ‘all-consuming’. “I’ve lost count the number the amount of times we’ve said to ourselves, this isn’t an 11-bedroom hotel, there are 100 bedrooms somewhere because the amount of administration it demands.”
Airds Hotel is an 11-bedroom boutique hotel with a 3 AA Rosette run by head chef Chris Stanley and each year a new area is reassessed and slightly reworked to freshen up its look to ensure the interiors never stagnate.
McKivragan leans on his background in the home retail sector to design the spaces and he has the final say on all new additions and style tweaks. The hotel previously had a more traditional and formal feel, as McKivragan explains, so he was keen to bring it into the modern day with a few new touches as soon as they took over.
“It was fairly traditional, but the trend over the last 15 years has been to go more casual and relaxed. Every year we shall pick an area and relook at it. The restaurant for example, when we took it on, it was much more traditional and what I call ‘sit up and beg’ dining chairs, floral carpets and pads on the chairs; it was quite formal, so we changed that.
“That’s the same throughout – we’ll pick a couple of rooms each year to do those. We’re doing some work in the kitchen as well, bringing in new equipment, and we also want to do something with the lighting outside.
While he says there is a ‘limit’ to what they can offer, McKivragan says they are always looking at ways to add to and enhance the guest experience. Aside from the 11 bedrooms, there are also two self-catering cottages available to rent, which do well throughout the year.
“Even though the footprint is quite small and compact there is still things we can do,” McKivragan says.
If they came to fruition, his ideas for next year would see a new restaurant created, an extra suite added and potential plans to build a lodge on the site, all prompted by Airds Hotel impressive summer of trading, which saw the hotel reach 95% occupancy in August.
McKivragan is well aware that expanding the property’s food and beverage offering would help attract guests looking for a longer stay. If given the go ahead, he hopes to extend the hotel to accommodate a second, more relaxed and casual eatery to operate alongside the 3 AA Rosette restaurant and give guests a wider variety of dining options.
“We are very conscious that people staying with us for more than one night, don’t want fine dining every night. So we want to be able to offer people a second option, something more relaxed and informal.”
A larger suite would then be installed above the new space, to take the hotel’s bedroom stock up to 12.
A second proposal that McKivragan says is being ‘mulled over’ is the idea for a log cabin to be built in the garden, currently home to a croquet lawn.
Not written in the stars
A natural progression for the business, you could argue, would be to strive for a coveted Michelin star. But McKivragan explains that this isn’t on the agenda and probably never will be. He accepts the pressures that come with running a Michelin-starred restaurant and admits that the process is ‘fraught with complications that we don’t need’.
“If a Michelin star comes along then great but Chris isn’t going to go out of his way to find it. We’ve so many times seen a hotel get a Michelin star and then suddenly the expectations are so much greater and we don’t want that pressure. Then if that Michelin star leaves, then what do you do? You can either decide to go another route, or try and get another Michelin star chef.”
Head chef Stanley joined Airds Hotel from One Devonshire Arms in Glasgow just over three years ago and his ‘no-ego’ attitude ensures that he maintains a good relationship with McKivragan.
“He’s a really nice guy,” says McKivragan, “he has no ego and he is so easy to work with. He listens and takes comments on board and doesn’t go off in the strop or anything. He keeps developing it. The challenge is getting a good team behind him, as we all know chefs are the hardest of them all; it’s tough. Constantly not wanting to compromise but knowing to work with the resources you’ve got.”
Tackling staff shortfalls
Recruiting is an industry-wide ongoing struggle so it’s no surprise that McKivragan cites the issue as one of the major challenges facing the business. He says that this year has been the ‘worst yet’ for recruiting, as the size of the talent pool accessible to the hotel in its remote location shrinks ever smaller.
“Our staff costs have gone up this year,” he explains, “that’s certainly an issue this year. All costs have gone up across the year. Our rates went up – they went up by over 60%, and after wages that’s the second biggest bill we have. We have a transitional relief of 12.5% a year over five years, but still. Food costs have gone up, staffing costs have gone up, we now have to provide them with pensions, the minimum wage has gone up, and everything is going up.
“My optimistic side says that it will be sorted and it will be OK. But there is this uncertainty and the government aren’t saying anything.
His wife Jenny’s background in HR stood them in good stead when they initially took over the business and was crucial to building the workforce and dealing with the peaks and troughs in business. By McKivragan’s own admission, he says they never realised just how ‘important that was going to be’.
Luckily on-site staff and managers’ accommodation helps immensely and a strong partnership with a university in France adds to the hotel’s workforce during busy times.
A core team of 14, including three managers, two waiting staff and one housekeeper, keeps Airds running efficiently throughout the year, and in the summer this number increases to 24 once the busy period sets in. Being a seasonal business in a far out location is tricky, but McKivragan has worked hard to build relationships with certain recruitment agencies to ensure he can get the best of them.
“We’ve done OK and latched onto a couple of agencies to build good relationships with them so they know what our requirements are. Like for us, they need to speak good English, that’s so important at this end of the market. It has been a problem and it’s getting harder – this year has probably been the hardest year we’ve had for recruiting staff.
“It goes very quiet for us in the winter – it starts to slow down at the end of October so we reduce our staff to a core staff and then come February / March time it starts picking up again. So you need to start recruiting in December / January for the new season, but this last year we found it a struggle and we were ending up not getting them until fairly late when the season had kicked off. And we were always trying to play catch up,” he says.
Future still looks bright
There is no shortfall of hurdles, issues and challenges facing Airds Hotel over the coming few years. Aside from the political uncertainty surrounding Brexit and Scottish independence, cost pressures and staff shortages continue to squeeze the whole industry and Airds is feeling it.
“We just want to see how next year goes,” he says. “We’ve had a very good year this year, but you just don’t know whether that’s going to continue or not. We have the issue of Scottish independence as well – that’s died a bit of death at the moment, but it’s still the SNP in charge and we know their agenda and that’s just such a negative for business.”
But business is on the up and through McKivragan’s savvy approach to marketing and ambitions for growth will keep the hotel on the right path. Occupancy was at 50% when they acquired the property 15 years ago and they have built this up to 65%, as McKivragan says there is still a ‘plenty more to go.’ The hard part comes now in getting these levels up during the winter and targeting more profitable business, encouraging people to return.
“We’re comfortable in the summer – August is at 95% occupancy, May, June, July all really strong months, it’s now concentrating on those quieter months.”