The Fife hotel which was named the best wedding venue in the world earlier this month has revealed a 13% drop in sales.
Balbirnie House Hotel in Markinch won an award for Global Wedding Retreat of the Year at the prestigious Haute Grandeur hotel awards in Dubai.
Accounts for the year ending April 30 show sales at Balbirnie fell by more than £400,000 to £2.8m.
Pre-tax losses during the year increased from £28,000 to £76,000.
Owner Nicholas Russell blamed Brexit uncertainty for the drop in turnover and highlighted significant investments into the fabric of the 1777 Grade A listed building in recent years.
He said he was encouraged by the positive publicity from the global award and a healthy level of bookings this year.
“Over the last few years, very significant reinvestment into the fabric of the assets has been successfully enabled to a level which, in percentage terms, is well above industry norms,” he said.
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“The ability to maintain such reinvestment has been beneficial to the company and as a result the property is presented to an exceptionally high standard.
“Notwithstanding what does lie ahead due to the intended UK Brexit, the directors and management team have successfully managed to increase bookings.
“Based on diarised trade, the directors hope to anticipate a return to trade levels in the ballpark of those experienced in the previous year’s accounts.”
The average number of staff employed at the hotel reduced from 116 to 94.
Staff and pension costs fell by £177,000 to £1.3m.
Mr Russell said more hours had been allocated to fewer part-time staff with a view to increasing consistency and teamwork.
He added: “Numerous roles have been created for hospitality assistants, gaining experience in multiple hotel departments.
“The company structure has also seen the incorporation of less hierarchy, so as to adopt a more Scandinavian approach to the workplace.”
Mr Russell warned that he expected Brexit to lead to “accelerating” costs and staffing difficulties.
“The directors are saddened to see the loss of ability to employ EU nationals as a significant proportion of company employees have always previously originated from within the EU,” he said.
He added: “Westminster-defined tourism VAT still remains vastly inflated above comparables in other EU countries.
“This significantly places Scotland’s hospitality sector at a disadvantage.”