Project Windmill

Operating hotel in administration

Project Windmill


Assured Hotels were appointed by BDO to operate this remotely located leisure led hotel & restaurant business, which had been placed in to administration. At that stage it was unclear whether the lender or BDO had the appetite to trade the business to a sale as a going concern.


Following an initial assessment we identified that we could increase turnover, particularly with the bedrooms and restaurant, and made a case to trade the business. This was despite the fact that post January 2012 there was very little business on the books from the previously critical Wedding and Events markets as the impending insolvency had become rumour in the local community.


Through the first quarter the hotel had been trading at 45% occupancy and net Average Room Rate of £75 so we immediately instigated an aggressive marketing promotion with a number of marketing partners. As a direct result of this activity, Q1 occupancy for 2012 achieved 78% with a net Average Room rate of £67. This approach was necessary in order to replace revenues from the wedding sector which was becoming increasingly difficult to generate.

We also assisted the management team in addressing overspends on all key expenditure lines. Payroll for example was running at £10k+ per week which was reduced to £7k per week, whilst still maintaining high levels of hospitality standards. This meant that payroll as a percentage of revenues reduced from 62% over the first half of 2011 to 42% for the same period in 2012. All other expenditure was managed in relation to the business and our weekly and monthly forecasting & reporting meant we were always on top of what otherwise would have been a more problematic case for all concerned.

Our hands on approach and 24/7 availability also allowed us to continue to recruit the appropriate calibre of personnel, and whilst due to the administration we were unable to offer new recruits any certainty through the issuing of contracts, we were able to retain the team in order to service the business to the satisfaction of both clients and the administrators.

The increase in turnover and smooth operational delivery allowed the business to continue trading in administration whilst the complex sale negotiations took place, and ultimately led to an exit from administration in early 2013. Whilst almost 15 months in administration would never be an objective, the solid trading base created allowed the marketing of the property to run its course, and protect the business, all stakeholders and employees from the difficulty of closure.