Crieff Hydro overhaul raises key question for hospitality

The Herald Scotland

24-04-2025

In a bold move that may ruffle feathers among the hotel's older customers, some of whom will recall the Hydro as a 'dry' destination, a striking new island bar has been installed in the heart of the traditional ballroom. Perhaps more controversially, at least for certain guests, a 'secret' speakeasy – an adults-only bar – can now be accessed from the ballroom, as long as you know the password. Its location is concealed by a bookcase wall.
'How my ancestors will be turning in their graves!' quipped Stephen Leckie, long-standing chief executive of the Crieff Family of Hotels, in an interview with The Herald.
The Ballroom Bar is just one of a raft of additions designed to rejuvenate the food and drink offer for guests at the resort, following an investment totalling £5.2 million.
The Leckie family will rightly be excited about the potential of their latest investment at Crieff Hydro and hope it will not only encourage frequent guests to keep coming back but convince lapsed customers to return. They may also be hoping the changes at Crieff convince people to visit the other hotels in the group's portfolio, which include Peebles Hydro and, on the west coast of Scotland, The Isle of Glencoe Hotel and The Ballachulish Hotel.
The Crieff project can also, perhaps, be more widely read as evidence of the importance of hospitality businesses continually investing to refresh their offer, in order to stay relevant in an extremely competitive market. This, however, is an increasingly difficult thing to do at a time when hospitality operators face relentless pressure on costs, and household budgets continue to feel the impact of the cost of living crisis.
Mr Leckie, who has routinely emphasised the importance of reinvestment over recent years, acknowledged to The Herald that it was a 'difficult time' to find the resources to invest in the current climate. But he said it was vital to 'do the right thing' for the company and its guests.
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He observed: 'It is a difficult time. Costs are up significantly, every cost – most recently national insurance and national minimum wage. We will feel that.
'But we have to do the right thing by the customers and our people, our staff and reinvest back into the business, and that is what we will continue to do, because we have faith in it. And that is what it boils down to – we have faith in this industry and this business and in Scotland.'
Such sentiment has surely to be lauded from the perspective of raising standards in the Scottish tourism and hospitality industry, which operates in a global market. And it is certainly encouraging to see such longstanding family owners display their commitment to safeguarding the future of their business.
But the difficult reality is that not every tourism and hospitality business will have the capacity to reinvest at this juncture.
It will certainly not be lost on the Leckie family, who routinely reinvest profits made by their business into the fabric of their properties, that many of their counterparts will simply not have the resources to think about refurbishments or revamping their offers at the present time.
In common with businesses across a raft of sectors, hospitality companies and operators will be getting to grips with the sharp increases in employer national insurance contributions and the national living and minimum wage, which came into effect this month. It has been estimated by UKHospitality that the hike in labour costs, which was brought in by Chancellor Rachel Reeves to raise much-needed cash for the public purse, will contribute significantly to a £1.9 billion increase in wage costs for the sector. The increase also reflects the lowering of business rates relief for the sector in England, to 40% from 75%.
It amounts to a heavy burden for the industry at a time when economic growth is proving extremely hard to come by, particularly in light of Donald Trump's tariff wars which this week led the International Monetary Fund to slash its forecast for UK growth for this year to just 1.1%, down from 1.6% in January.
Faced with a stuttering economy, and widespread concern over the potential impact of Trump tariffs, it would certainly not be surprising if the owners of many tourism and hospitality businesses decide this is not the right time to unleash investment plans.
Yet, with reinvestment so critical to the ability of hotels, restaurants, and tourist attractions to keep customers coming back, it is a double-edged sword. Preserving cash to steer a business through uncertain times certainly makes a good deal of sense. But on the flip side, many business owners will only be too aware of the need to keep their offer fresh so that, when consumers do decide to part with hard-earned cash for a meal in a restaurant or weekend stay in a hotel, they are given a good reason to visit.
And this matters in an international context too. It is fair to say that Scotland punches above its weight in attracting foreign visits to these shores. The most up-to-date figures from VisitScotland show 1,975,000 visits were made to Scotland by overseas residents in the first six months of 2024, up 14% on the same period of 2023 and a rise of 46% on 2019. The recovery of the international market has come as the domestic tourism sector in Scotland, which comprises tourism trips by people resident in the UK, continues to struggle amid the cost of living crisis.
Vicki Miller, chief executive of VisitScotland, hammered home the importance of tourism to the country in an article in The Herald this week, writing that visitor spending creates a 'ripple effect that touches every corner of Scotland's economy'.
In order for this trend to continue, consumers need good reason to keep on spending, which underlines precisely why businesses need to keep reinvesting. But it is certainly not an easy thing to do in the current climate.