The owner of a landmark Aberdeen hotel has described his “heartbreaking” struggle to stay in business amid growing pressure from crippling energy bills and rates.
Steven Finnie, 42, is at his wits’ end trying to combat the double whammy that has hit the Aberdeen Northern Hotel on Great Northern Road – and he knows he is not alone.
He said: “I’m surprised we are not hearing from a lot more small and medium-sized businesses, particularly in the hotel sector, about the challenges they are now facing.
“We’ve swallowed costs on little income during the pandemic. Things were getting better, but now it’s all gone backwards again and become impossible to make a profit.”
Soaring fuel bills mean “absolutely astronomical” extra costs for the business, while “incredibly high” business rates – set in 2017 during healthier times for the local economy – add to the increasingly difficult challenge of staying in business, he said.
The hotel was able to take advantage of a business rates holiday and, more recently, 50% relief under a scheme of targeted support for the Scottish hospitality industry.
But these measures are no longer in place, leaving the hotel with a non-domestic rates bill of around £4,000 a month.
Added to this are electricity costs which have rocketed from £1,800 per month in March to about £8,000 in April amid spiralling inflation.
Mr Finnie fears the monthly total for electricity, gas and business rates may top £20,0000 following a further expected increase in fuel bills from this autumn.
He was left to run the hotel after his father, Colin Finnie, went missing – feared dead – during a solo sail from Australia.
Mr Finnie Snr had bought the property in 1994 and completely renovated and restored it back into a working hotel, retaining the art deco features the building is known for.
His son later invested about £40,000 updating bedrooms and public areas but then Covid-19 emerged, and Aberdeen and much of the rest of the world went into lockdown.
The hotel stayed open as an accommodation provider to Aberdeen City Council, which needed places for the homeless and other vulnerable people. “That saved the hotel and kept everybody in their jobs, Mr Finnie said.
‘What’s happening now is just tragic’
He added: “Business started picking up as the Covid restrictions eased and we were able to make a small profit again for a spell – it was a slow burn.
“What’s happening now is just tragic, and I am having to think about other operating models to keep the accommodation side of the business open.
“The hotel has survived Covid and kept people in employment during the pandemic by housing homeless people, but we are no longer getting any assistance from government.
“It is heartbreaking to be in this situation. We are doing everything we possibly can but cannot put up our prices. That will just drive customers away. We would need to increase our room rate four-fold and wouldn’t get anybody staying in the hotel.
“I know lots of other people in the industry are in the same boat and feeling the pinch.
“These costs are having a major impact and unless we get some help they are going to cause serious trouble.”
The former university halls of residence has a 12-strong team of hotel staff.
As well as 32 bedrooms, it boasts restaurants, bars, dining and conference facilities which make use of the unusual architecture.
The distinctive V-plan layout and bold curved angles on a corner location have been a striking landmark in the city since the building first opened as a hotel in 1938.
Social ‘hub’
Mr Finnie, who mostly lives in Glasgow, said: “The Northern Hotel is an Aberdeen institution and has provided employment and a great place to stay for decades.
“It’s a social hub for many people. Everyone in the city has a story about someone – an uncle or an aunt perhaps – who got married there.
“We are doing everything we possibly can to make it a successful business.”
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