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How hard is it for companies operating on Arran – how hard relative to businesses elsewhere?

The ‘Auchrannie Resort’ is one of the largest, plushest hotel, spa and leisure offerings to tourists visiting Arran. It must be one of the island’s largest companies and wholly dependent on its customers wanting to – and being able to – get to the island. On the home page of its web site its states: ‘Did you know that 750,000 journeys are made to and from Arran each year?’

The company web site describes its history in the following terms: ‘Auchrannie was acquired by …. in 1988 with a view to providing indoor leisure facilities on the island. In the process of achieving this objective, Auchrannie has grown from a 16 bedroom guest house to a resort now comprising two 4 star hotels with 85 rooms, thirty 5 star self-catering luxury lodges, 14 retreats, three iconic restaurants, a shop, two leisure clubs with pools, a destination spa, an outdoor adventure centre and a children’s ‘Playbarn’.’ (my emphasis)

Now by any measure that is a history of remarkable transformation, presumably enabled in no small part by a ferry service delivered by a publicly-owned company subsidised by tax payers across Scotland.

Auchrannie Holdings Limited acts as the holding company of a group which consists of Auchrannie Leisure Limited and others operating on the island. What follows are extracts from the holding company’s annual accounts over recent years, publicly available from the Companies House website.

Just prior to the Covid pandemic, from the year ending 31 March 2019:
Turnover = £8,269,643 (Year to 31 March 2018 turnover was £7,690,731)
From the Group Strategic Report: ‘healthy forecast of occupancy for the next 12 months’
Main risks and uncertainties:
– Competition
– Shortage of skilled staff and pay pressures
– Increasing material and consumable prices that are unrecoverable
– Settlement of accounts.

Did Brexit impact negatively its access to skilled labour?

From the year ending 31 March 2021:
Turnover = £3,594,010
From the Group Strategic Report: ‘healthy forecast of occupancy for the next 12 months’
Main risks and uncertainties:
– Competition
– Shortage of skilled staff and pay pressures
– Limited scope to increase prices to offset costs, particularly energy costs
– Higher debt servicing costs due to higher interest rates.

The impact of Covid seems evident on turnover and again staffing issues and now inflation and interest rate rises are impactful. Which of these factors can be attributable to actions or inactions of which one of Scotland’s governments?

From the year ending 31 March 2022 (signed off 21 December 2022):
Turnover = £9, 655,884
From the Group Strategic Report: ‘healthy forecast of occupancy for the next 12 months’
Main risks and uncertainties:
– Competition
– Shortage of skilled staff and pay pressures
– Limited scope to increase prices to offset costs, particularly energy costs
– Higher debt servicing costs due to higher interest rates.

In turnover terms, the company had bounced back from Covid but access to skilled staff (a Brexit consequence?), inflationary pressures including now energy costs, and higher interest rates are regarded as business risks. How much media profile has been given to Arran businesses protesting against these negative impacts on their business – has there been any protest via the media? Perhaps the origins of such negative factors are too far away in Westminster?

From the year ending 31 March 2023 (signed off 22 December 2023):
Turnover = £10,441,415
From the Group Strategic Report: ‘healthy forecast of occupancy for the next 12 months’
Main risks and uncertainties:
– Competition
– Shortage of skilled staff and pay pressures
– Limited scope to increase prices to offset costs, particularly energy costs
– Higher debt servicing costs due to higher interest rates
– Unreliability of ferry services
– Capacity of ferry services.

Notably in the latest accounts, turnover – a rough measure of increased business activity – edges upwards still. But now for the first time ‘ferries’ appear in the company’s risk register. However, notwithstanding its concerns about ‘ferry’ issues, the company reports a ‘‘healthy forecast of occupancy for the next 12 months”: this positivity remains a constant!

It asserts ‘unreliability’ – what is the evidence for this? How unreliable in absolute terms; how unreliable in relative terms, relative to other comparable ferry services? Everyone wants reliable public transport services: every island community wants and needs this. What is a reasonable expectation of maritime transport?

And it identifies ‘capacity’ as a risk: anyone know how ‘capacity’ of Arran’s ferries has changed over time? Is ‘capacity’ a concern in absolute terms or relative to the present scale and ambition of this business?

What increased level of subsidised ‘capacity’ does this commercial enterprise wish to obtain? Does it wish the Scottish tax payer to increase public subsidy still further to meet the commercial growth aspirations of the company which based on its transformative development history seems to have benefited hugely already from the publicly-funded ferry service to Arran?

These seem like legitimate questions in a situation when the responsible government has to operate within a constrained, largely fixed budget upon which there are many calls.