Revenue at the Old Course Hotel in St Andrews fell by more than £14 million last year.
Covid-19 lockdowns forced the closure of the five-star hotel, golf resort and spa for large periods of last year. As a result, revenue dropped 63.4%.
Turnover fell from £22.7 million in 2019 to £8.3m for the year ending December 31 2020.
Old Course Limited, which also operates the Duke’s golf course in the Fife town, made a pre-tax loss of £7.1m for this year.
That is compared with a pre-tax profit of £233,000 in 2019.
A spokesperson for the hotel said: “Our 2020 accounts reflect a difficult year through a global pandemic and where we have made a considerable investment into expanding and improving the hotel.”
Impact of the pandemic on The Old Course
In his strategic report, director Herbert Kohler outlined the impact of the pandemic.
Mr Kohler said: “The underlying trading revenue of The Old Course hotel, golf resort and spa has decreased due to the impact of Covid-19.
“The closure of the facility in the year led to an overall decrease in revenue of 63.4%.”
The hotel is currently undergoing a multi-million-pound makeover.
This includes the introduction of a penthouse and new guest rooms. An additional restaurant and bar will also be formed, as well as refurbished events spaces.
The famous golf course will host the 150th Open Championship next summer.
The R&A has received applications for 1.1 million tickets – four times the likely total capacity for the championship.
Mr Kohler said the company had worked to ensure appropriate safety measures were in place to protect staff, and guests, since its reopening.
Headcount also fell from 455 in 2019 to 382, with a drop of 77 staff in hotel operations.
The wage bill also fell by just over £1m from upwards of £6.7m in 2019 to £5.6m for the reporting period.
Challenges for The Old Course
Old Course Limited is behind the Hamilton Grand development.
The development contains some of Scotland’s most expensive flats.
According to Savills’ report, apartments in the building sell for £1,500 per square foot.
That is on a par with prices in prime parts of London.
One flat, number 22, sold for £2m on December 23 last year, having previously been bought for £1,350,000 in 2015.
In his report, Mr Kohler said apartments continued to sell well.
The hotel has an “established network” to help manage staffing, he added
Mr Kohler said: “Due to global uncertainty surrounding the UK’s exit from the EU, as well as Covid-19, the directors recognise potential risk in the selling of apartments, and recruitment and retention of casual staff in 2020 and beyond.
“The weakening pound presents a risk of increased costs to the company but could also stimulate overseas tourist numbers visiting the UK.”
The company is 99.8% owned by Kohler Scotland, a wholly-owned subsidiary of USA registered Kohler Co.
The R&A owns the remaining 0.02% of the business.
The company’s ultimate parent company is Kohler Co, a well-known plumbing products manufacturer founded in 1873 in Wisconsin.
The firm has several golf and leisure facilities in the US, as well as engine manufacturing firms and decorative brands.