themonziebusinessplan hotel

John Burke Owner, Managing Director Corryard Developments Ltd & The Monzie Hotel Ltd

Executive Summary

•  Seeking funding to convert A-Listed Church in Crieff, Perthshire, into a 5 star Exclusive Use venue (The Monzie), with 12 bedrooms, banqueting space for 100 guests and Spa area.

•  Requesting a total Crowd-Sourcing funding of £1,000,000 in return for a 20% equity stake in The Monzie Hotel Ltd.

•  This Business Plan outlines the proposition and strategy for the project, examines the external environment and competition, and provides financial projections for 3 years

•  The Monzie will have £1.38m turnover by the end of Year 3 with EBITDA of £901,146 and net profit of £292,432. These projections are based on a conservative occupancy rate of 49% (compared to 75% for Scotland (72% for Perthshire))*

•  Work is scheduled to commence October 2014, with a planned 18 month build period, opening in April 2016

2 Source: * BDO LLP Accountants Report April 2014

Executive Summary - Location

•  The Monzie is situated on the edge of the country market town of Crieff, in central Perthshire, known as the gateway to the Scottish Highlands. Crieff is a well established tourist destination

•  Crieff is centrally located within Scotland, within easy reach of Glasgow and Edinburgh airports (1 hour) as well as close to Stirling and Perth (30 mins)

•  The world famous golfing resort of Gleneagles Hotel is 8 miles away and St Andrews is 1hr 15mins drive

•  Crieff is home of Famous Grouse Whiskey Distillery – Scotland’s oldest distillery

•  World class fishing, shooting, hiking and biking all available in Crieff locality

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Executive Summary – Home of the Ryder Cup

•  The Monzie is situated just 10 min drive from Gleneagles Golf Resort, home of Ryder Cup in September

•  The location of The Monzie close to Gleneagles and also to St Andrew’s will be a key sales & marketing tool. Many of our future guests and potentially our investors, will be passionate about golf, and at The Monzie, we will create truly life-long golfing experiences for them

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Executive Summary The Monzie – the "before” photos

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Executive Summary The property has the highest level of protection (A-listed) from Historic Scotland with unique architectural and historic features

Executive Summary - Crowd Funding

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Goals

•  Total Crowdcube.com funding request of £1,000,000 in return 20% Equity stake in The Monzie Hotel Ltd.

•  Total development costs of £1,765,371– (see detailed breakdown of the development costs from Hamish Bell Associates Quantity Surveyors). Corryard can deliver the project for £1.38m (by forgoing contractors profit margin, Corryard & The Monzie have the same owners)

•  Owners contribution –  £250,000 already spent on purchasing property, initial site work and all professional

fees to date (incl. architectural & engineering fees for planning permission & Building Warrant)

–  £200,000 additional funds to be invested at the start of the project.

•  Bank funding committed –  £800k bank funding agreed in principal, but only when first £1.2m is spent (£1m

from equity sale and £200k owners funds). This £800k includes the following: •  Funds to close out the project (£200k) •  £400k for fittings & furnishings •  £200k contingency fund

Executive Summary – Investor Returns

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Goals

•  Funds invested are committed for a 4 year period (from the date of the official opening of The Monzie (scheduled for April 2016))

•  Investors will receive their original capital investment back plus a guaranteed return of 7%. For example, for an initial £100,000 investment , a minimum return of £107,000 will be paid out after 4 years.

•  If The Monzie exceeds its business targets by Year 4, all investors will receive a greater return than 7%

•  A range of Investor Rewards have been designed to make investing in The Monzie an attractive all-round investment proposition for potential investors. (see next pages for details)

•  For example, £100,000 investment has Investor Rewards of £60,000 over 3 years, of which £30,000 can be realised as cash returns to investors.

Executive Summary - Investor Rewards

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Goals

•  We want our Stakeholders to enjoy their equity stake in The Monzie, we have developed a range of Rewards depending on the level of investment, which include:

1.  Exclusive Invitation to Opening Party of the Monzie 2.  The Monzie Lifetime Membership Card

•  10% discount of all bookings (incl. food & drink) at The Monzie (value £1,250 for 2 night weekend hire)

•  Free exclusive use of the SPA for a set number of days per year •  Invitation of special events organized at The Monzie throughout the year •  Invitation (with 10% discount) to special Dining Evenings at The Monzie •  Only available at investment stage

3.  SPA Day for 10 guests, plus lunch at The Monzie 4.  1 night exclusive hire of The Monzie (excluding catering) (not Friday or Saturday).

Golfing at Gleneagles. Transferrable to friends and family 5.  2 night weekend exclusive use of The Monzie (excluding catering) golfing at

Gleneagles. Transferrable to friends and family 6.  VIP – 3 and 2 night weekend exclusive use of The Monzie – full package, full

experience itinerary including fishing, stag / grouse shooting, golfing at Gleneagles. Airport pick-up and drop-off. Transferrable to friends and family


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Goals

•  There is a minimum investment of £100 with no maximum investment. The investment tiers and associated rewards are outlined below.

•  £100,000+ investment: –  Class A shares of The Monzie Hotel Ltd (voting rights) –  VIP – 3-night weekend exclusive use of The Monzie – full package, including

catering (not drinks), full experience itinerary including fishing, stag / grouse shooting, golfing at Gleneagles. Airport pick-up and drop-off. Transferrable to friends and family. Every year for 3 years. (value £60,000).

–  Weekends can also be handed over to The Monzie for 50% of the list price, The Monzie will then release that weekend into their availability pool. (Value of £10,000 per year, 10% return on investment)

–  Exclusive Invitation to Opening Party of The Monzie, with Bed & Breakfast and private Investor Dinner

–  The Monzie Lifetime Membership Card –  20% discount off all future bookings at The Monzie, transferable to third parties


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Goals

•  £50,000+ investment: –  Class A shares of The Monzie Hotel Ltd (voting rights) –  VIP - 2 night weekend exclusive use of The Monzie, full package, including

catering (not drinks), full experience itinerary including fishing, stag / grouse shooting, golfing at Gleneagles. Airport pick-up and drop-off. Transferable to friends and family. Every year for 2 years. (value £28,000),

–  Weekends can also be handed over to The Monzie, The Monzie will then release that weekend into their availability pool. (Value of £5,000 per year, 10% return on investment)




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Goals

•  £25,000+ investment: –  Class A shares of The Monzie Hotel Ltd (voting rights) –  VIP - 2 night weekend exclusive use of The Monzie (outside peak season), full package,

including catering (not drinks), full experience itinerary including fishing, stag / grouse shooting, golfing at Gleneagles. Airport pick-up and drop-off. Transferable to friends and family (value £15,000)

–  Weekends can also be handed over to The Monzie, The Monzie will then release that weekend into their availability pool. (Value of £3,000, 12% return on investment)



•  £10,000+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  1 night exclusive use of The Monzie (excluding catering) (outside peak season).

Transferable to friends and family. (value £5,000) –  Exclusive Invitation to Opening Party of The Monzie –  The Monzie Lifetime Membership Card –  10% discount off a future booking at The Monzie, non-transferable to third parties


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Goals

•  £5,000+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  1 night exclusive use of The Monzie (excluding catering), when booking for 2 nights (All

year round). Transferable to friends and family. (value £4,000) –  Exclusive Invitation to Opening Party of The Monzie –  The Monzie Lifetime Membership Card –  10% discount off a future booking at The Monzie, non-transferable to third parties

•  £3,000+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  1 night exclusive use of The Monzie (excluding catering), (Mon-Thurs, outside peak

season) when booking for 2 nights. Transferable to friends and family. (value £3,000), –  Exclusive Invitation to Opening Party of The Monzie


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Goals

•  £1,000+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  SPA Day for 10 guests, plus lunch at The Monzie (value £500) –  Exclusive Invitation to Opening Party of The Monzie –  10% discount off a future booking at The Monzie, non-transferable to third parties

•  £500+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  SPA Day for 10 guests at The Monzie (value £300) –  Exclusive Invitation to Opening Party of The Monzie

•  £100+ investment: –  Class B shares of The Monzie Hotel Ltd (non-voting rights) –  Exclusive Invitation to Opening Party of The Monzie

Contents •  Executive Summary

•  Introduction to The Monzie

•  External Analysis –  Scottish Tourism –  Competitor Analysis

•  Strategy & Plans –  Vision, Mission and Goals –  The Monzie Team –  The Monzie Advisory Board –  Target Markets

•  Financial Analysis –  Funding Request –  Financial Projects - Profit & Loss, Balance Sheet and Cashflow Analysis

•  Risk Analysis –  Risks and Risk Mitigation Plan –  SWOT Analysis 15

Goals

Introduction to The Monzie

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Goals

•  The Monzie Hotel will be a 5 star Exclusive Use Venue within a converted A-Listed Gothic Church called The Old South Church, in the country market town of Crieff, in central Perthshire, Scotland

•  The Monzie will have 12 bedrooms, with large open areas within the body of the former Church. There will banqueting space for 100 guests in the Mission Halls to the rear, with a Moroccan Hammam Spa in the vaults under the building

•  Being Exclusive Use Venue means that a person or group can book the entire property for their sole use for a minimum period of a day, with a fixed fee per day which includes catering. Beverages and other services are added to the final bill

•  The Monzie has been designed with its end use in mind, at the same time as keeping options open for different operational models in future (i.e. fully functional hotel)

Introduction

Introduction to The Monzie - Key USPs for the Monzie

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Secondary USPs

1.  Private Exclusive Use venue providing accommodation for 24 guests, and up to 100 guests for weddings

2.  Moroccan Hammam spa set in the vaults of the old Church, exclusively for guests of The Monzie

3.  Super cool contemporary interior design, with a Scottish timeless twist

4.  World class dining experience, using local Scottish fayre

5.  Exceptional customer service delivered in a relaxed, easy-going but professional manner

Introduction

Stunning A-Listed Church conversion providing a totally unique 5 star Exclusive Use experience

The Story so far ….

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Goals

•  Purchased by Corryard Developments Ltd in April 2012

•  Commissioning of Award-winning Architectural practice, McKenzie Strickland Associates in June 2012

•  Received planning permission to convert the A-listed Old South Church into a boutique hotel with 12 bedrooms, restaurant and spa, in December 2013

•  The Monzie Hotel Ltd established in February 2014 with ownership of The Monzie transferring from Corryard Developments Ltd in May 2014

•  100% ownership of The Monzie Hotel by John Burke and Susie Whyte (husband & wife team)

•  Building Warrant Application to commence work on site submitted in April 2014

•  Planning to commence work on site in October 2014

•  Target Open Date is April 2016 (18-month build period)

Introduction

World Class Design of A-listed historic Church

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Goals

Introduction

•  We are passionate about preserving the special architectural and historic features of the Church. We aim to balance the extent of physical and aesthetic intervention with the realistic requirement for establishing a business model that can function efficiently and economically as a hotel in the long term. The requirement to retain and restore the existing historic features wherever appropriate is a key objective so that the unique features can add value and serve as an unique selling point when marketing the hotel

Please refer to the architectural plans for details of the proposed design and layout. A full set of plans can be sent on request.

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Goals

The Monzie Hotel Owner •  Founder and MD of Corryard Holdings Ltd, which includes The Monzie Hotel Ltd

•  BSc, MSc and MBA qualified from leading European Business School

•  Worked in the Pharmaceutical for 20 years, resigned in May 2014, to focus on The Monzie project and Corryard Developments

•  Last position in the Pharma industry, was Global Category Director for Swiss-based global organization, responsible for the spend and strategies in Temp Labour and Management Consultancy (>1Bn CHF / year)

•  Built up Corryard Developments, award-winning building company from scratch in 2007, into £2m turnover company

o  Won 2010 UK Master Builder award (for Locherlour Mill project)

o  Won 2013 Scottish Homes Award Renovation of the Year

o  Won 2013 Herald Property Award Conversion of the Year

o  Finalist 2014 Scottish Homes Award Conversion of the Year & Small House Builder of the Year

•  Converted B-listed Locherlour Mill in 2009 into as a 5 star Holiday Home (sleeping 20) and ran it successfully for 3 years before selling

Introduction





•  Financial Analysis –  Financial Projects - Profit & Loss, Balance Sheet and Cashflow Analysis

•  Risk Analysis –  Risks and Risk Mitigation Plan –  SWOT Analysis

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Tourism in Scotland – some key facts

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Goals

“In 2012, almost 15m overnight tourism trips were taken in Scotland, for which visitor expenditure totalled £4.3bn”

“In 2012, there were 12.75m trips by GB visitors to Scotland, averaging 3.4 nights per trip. Overseas guests stayed 7.8 nights”

“The months of July to September are more popular in Scotland for both GB and oversea guests”

“People from within GB account for the majority of tourism in Scotland”

“30% of GB Visitors to Scotland have children in their household”

“Overseas residents account for around 15% of the total number of tourism trips, but 33% of total spend”

Source: VisitScotland report – Scotland – The Key Facts on tourism 2012

External Analysis

Tourism in Scotland – GB Tourism “People from within GB account for the majority of tourism in Scotland”

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Goals

by regular bus / coach; 5% by plane; 8%

by train; 15%

by coach tour; 3%

by car; 64%

other; 5%

Leisure Tourism

All Tourism

Accommodation 34% 31%

Eating / Drinking 18% 19%

Travel 17% 24%

Shopping 17% 15%

Entertainment 6% 5%

Package trip 6% 4%

GB Tourists’ transport to Scotland

Categories of spend by GB tourists


External Analysis

Tourism in Scotland – GB Tourism “People from within GB account for the majority of tourism in Scotland”

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Goals

•  Accommodation – “A key element of people’s experience of Scotland is where they stay and therefore the quality of facilities and service have a major bearing on our visitor satisfaction”

•  67% of GB visitors are in the ABC1 socio-economic groups

•  Key activities of GB visitors include – general sightseeing (39%), short walks (17%), just relaxing (20%), visited castles / stately homes (14%)


Age 65+; 15%

Age 55-64; 18%

Age 45-54; 22%

Age 35-44; 18%

Age 25-34; 17%

Age 16-24; 10%

Demographics of GB holiday visitors to Scotland

External Analysis

Tourism in Scotland – Overseas Tourism “In 2012, overseas residents account for around 15% of the total number of tourism trips, but 33% of total spend”

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Goals

Trips Nights Spend

M % M % £M %

Holiday 1.15 52% 7.55 43% £748 53%

VFR 0.60 27% 5.90 34% £287 20%

Business 0.38 17% 1.83 10% £245 18%

Other 0.05 2% 1.73 10% £96 7%

Study 0.04 2% 0.47 3% £25 2%

Total 2.23 100 17.50 100% £1.4b 100%

Trips Nights Spend

000s % 000s % £m %

USA 324 15% 2880 16% 274 20%

Germany 281 13% 1977 11% 143 10%

France 174 8% 1243 7% 108 8%

Holland 150 7% 946 5% 77 6%

•  USA, Germany, France and Ireland are long-time major markets for Scotland, while over the last 5 years growth has been seen in non-Euro markets such as Norway and Switzerland

•  The Monzie overseas marketing will be focused on USA, Germany, France and Holland, which representations 42% of the total spend from overseas holiday visitors


Volume and value of tourism from overseas Origin of overseas tourists

External Analysis

Tourism in Scotland – Perthshire Tourism figures for Perthshire closely mirror Scotland figures on the whole

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Goals


Source: VisitScotland report – Tourism in Eastern Scotland 2011

•  2012 - 65% Hotel Occupancy for Scotland Vs. 62% for Perthshire

•  Average trip duration for GB Tourist is 3.4 days for Scotland and 3.1 days for Perhshire, and for overseas tourist 7.5 days for Scotland Vs 5.5 days for Perthshire

•  Top 5 Visitor Attractions in Perthshire including -

Visitors in 2011

Queen’s View Visitor Centre, Pitlochry

Scone Palace, Perth

The Birnam Institute, Dunkeld

The Famous Grouse Experience, Crieff

Perth Museum & Art Gallery

20k 40k 60k 80k 100k 120k 140k

External Analysis

Scotland Hotel Sector 2012 Monthly accommodation occupancy – 65% for Scotland (62% for Perthshire)*

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Goals

Month Scotland Hotel (% room occupancy)

Perthshire Hotel (% room occupancy)

January 45% 42%

February 55% 54%

March 58% 56%

April 63% 63%

May 72% 69%

June 76% 73%

July 74% 74%

August 79% 78%

September 78% 76%

October 70% 66%

November 60% 52%

December 49% 43%

Annual Average 65% 62%

Source: **TNS / VisitScotland - Scottish Accommodation Occupancy Survey Annual Report 2012

Source: * BDO LLP Accountants Report April 2014

2013 Occupancy levels in Scotland were 75.5%**

External Analysis

Scotland Hotel Sector - key findings A sector of consistency over the past 7 years

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Goals

Source: TNS / VisitScotland - Scottish Accommodation Occupancy Survey Annual Report 2012

•  Occupancy rates have shown a considerable degree of consistency for hotels across Scotland, with 63-65% Room Occupancy from 2005 to 2012 (62% for Perthshire)

•  Months outside the main tourist season have shown the greatest consistency (Feb at 39% since 09, March at 58% since 07 and Nov at 42% since 07)

•  Larger hotels, those with higher star gradings and those in the highest tariff band recorded the most stable rates and room occupancy

–  101+ rooms – 68-74% occupancy since 2002 –  5 star grading – 66-71% occupancy since 2002

•  Over the years, there has remained a correlation between occupancy rates and tariff, size and grading

External Analysis

Scotland Hotel Sector - key findings A sector of consistency over the past 7 years

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Goals

Source: TNS / VisitScotland - Scottish Accommodation Occupancy Survey Annual Report 2012

•  City / large town establishments continue to record the highest rates and demonstrate greatest stability over time, especially with room occupancy (68-74% occupancy since 2002)

•  Areas likely to attract higher proportions of business guests as well as tourist trade recorded the highest room occupancy rates

–  Edinburgh & Lothians – 76% –  Aberbeen & Grampian – 71% –  Glasgow & Clyde Valley – 70%

•  For 2012 - Business confidence levels highest at the start of the year and then again for most months outside the main tourist season. Business confidence in 2014 has increased in line with the overall economy

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

83% Very/quite Confident 67% 79%

External Analysis

Scotland Hotel Sector - 2014 Outlook Strong increase in Occupancy for Scotland in 2013 & trend to continue in 2014

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Goals


Source: **PwC European Cities Hotel Forecast 2014 & 2015, (March 2014)

•  Scotland’s hotel sector had the highest occupancy and revenue levels of the whole of the UK in 2013 with the trend set to continue into 2014*

•  2013 Occupancy levels in Scotland were 75.5%, compared with 72.5% in regional UK and just under 72% in England*

•  In line with previous years, Perthshire occupancy levels for 2013 and 2014 should mirror Scottish results, in 70-75% range. (Note: we have used a 49% occupancy level in our assumptions & financial projections for The Monzie)

•  Hotel room yields (measure of revenue) was £52 in Scotland, compared to £43 in regional UK and £42 in England*

•  European cities rejuvenated by economic recovery. Growth across most cities as Dublin, London, Paris, Edinburgh and Berlin lead the charge in 2014**

External Analysis

Scotland Hotel Sector - 2014 Outlook Strong increase in Occupancy for Scotland in 2013 % trend to continue in 2014

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Goals

Source: * Office for National Statistics – Scottish Government Press Release 8th May 2014

•  Overseas tourism visits to Scotland increased in 2013 which led to an increase in overseas tourism expenditure. Overseas tourists increased by 10% in the full year 2013 and spent £1.68 billion, 20% more than in 2012*

•  The majority of overseas visitors to Scotland come from Europe as does the majority of overseas expenditure*

•  There was a 32% increase in spend from visitors from the rest of the world, excluding Europe and North America, such as Australia and India*

•  There was a significant increase, 220,000 trips in 2013 compared to 2012, in tourists visiting rural areas (the North and South of Scotland)*

•  “The rises in expenditure suggest that Scotland is as a destination offering quality experiences and visitors are prepared to spend their money in our hotels, tourism attractions and restaurants as a result”*

External Analysis

Scotland Hotel Sector - 2014 Outlook Edinburgh PwC expect another two good years, high occupancies (83%) with rates look like staying put in 2014 and 2015

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Goals


Source: **PwC European Cities Hotel Forecast 2014 & 2015, (March 2014)

•  Lonely Planet lists Scotland as one of the top three countries in the world to visit during 2014. Edinburgh’s hotels are likely to benefit from 2014 events such as the Commonwealth Games in Glasgow, the Ryder Cup at Gleneagles; and a staged repeat of 2009’s Homecoming campaign throughout the year

•  The expansion of Edinburgh Airport and the launch of further long and short haul routes are also likely to positively impact hotels this year. Tourism is likely to be boosted by expansion of the Edinburgh International Conference Centre (EICC)

•  Economic Outlook: Edinburgh is consistently one of the most prosperous parts of the UK, the economy is largely based around the services sector, with tourism and financial services particularly important. 2013 was a very good year that saw the economy bouncing back in the UK, and the effects of the Olympics being reversed. 2014 is expected to be another good year in the UK, with GDP expected to grow at 2.5% and by 2.4% in 2015. Scotland’s economy has outperformed other parts of the UK; unemployment in the Sep-Nov 2013 period was 6.4% compared to 7.2% in the rest of the UK. Added uncertainty over our projections stem from the independence referendum scheduled for September 2014

External Analysis

External Analysis - Competitor Analysis

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Goals

•  There are 13 Exclusive Use Venues in Scotland which are rated 5 stars by VisitScotland, in addition to traditional hotels who offer exclusive use hire for 1 or 2 nights

•  There are Exclusive Use Venues in Scotland, which are not rated by VisitScotland, but still provide a high quality offering

•  Three 5-star exclusive use venues and three 5 star hotels (in addition to one 4 star hotel in Crieff) which offer exclusive use hire, were selected for the competitor analysis. These venues and hotels were selected based on similarity of size (no. of bedrooms & function space), target market, quality reputation and high service levels

External Analysis

Competitor Analysis for The Monzie 5 Star Exclusive Use Venues / Hotels in Scotland

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Goals

Venue Location No. of

Bedrooms Rates Max numbers for

guests / party

Details of Wedding Packages Target Markets

Gilmerton House East Lothian 10 £3000 per night 200

Starting at £75 per person

Exclusive Use Venue (EUV) - Parties, Weddings

Hillhouse Troon 10 £5900 for 2 night stay (10 beds)

upto 40 wedding guests 40 in house (200

with marque) Starting at £66 per person

EUV – Golf, Weddings, Corporate, House Parties

Aldourie Castle Inverness 13

£14,400 for 2 night weekend stay (£19,200 for 3 night stay). Drops to £9,600 for Nov, Dec, Jan and

Feb. 33k for 1 week 50 Starting at £66 per person

EUV - Weddings, House Parties

Inverlochy Castle Fort William 17

£8500 / night Low season £10150 / night High season (2

night min stay) Breakfast included 80 Starting from £67 per person

Hotel, offering EUV, Weddings

Cromlix Dunblane, Stirlingshire 15

1 night stay - April-Oct £8500 (bed & breakfast) for upto 30

guests. Nov-March rate is £7000. May-Sept min 2 night rental

required (£17,000) 30 in house (300

with marque) Menus starting at £35 per person


Kinloch House Perthshire 15 £7000 per night (including

catering) 30 in house Hotel, offering EUV

Knock Castle Crieff 22 1 night weekend £9500 and mid-

week £7500 60

Starting at £65 per person


External Analysis

Competitor Analysis for The Monzie The Monzie is competitively positioned in terms of pricing and product offering with room for price increases over time

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Goals

Ser

vice

Lev

el /

Pro

duct

Offe

ring*

*

Price* Low

Low

High

High

Hilhouse Inverlochy Hotel

Cromlix Hotel

Aldourie Castle

Knock Castle Kinloch House

Gilmerton House

*Based on 2 night weekend stay in May-Sept period, for 12 bedrooms Exclusive Use of Venue /Hotel including catering. If catering costs unknown, assumed £100 per person per day

**Rating based on USPs of each venue, quality of service levels as rated by TripAdvisor

Circle size represents strong market position

£9080

£19,000

£9200

£19,500 £20,800

The Monzie

£12,000

£16,500

Future position for The Monzie

£14,000

External Analysis

Competitor Analysis for The Monzie IHMG Hotels are a key benchmark which The Monzie will compete in the same target market

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Goals

•  Cromlix House – Andy Murray’s hotel in Dunblane, opened in April and fully booked for the summer! Won the Scottish Hotel of the Year 2014 at the recent Scottish Hotel Awards. Managed by Inverlochy Hotel Management Group (IHMG), will be very popular all year round, with high service levels from IHMG

•  Inverlochy Hotel – Flagship hotel of the IHMG, very professionally operated, with strong marketing and positioning in the luxury end of the market. Well connected with international booking agents, with over 50% of guests from overseas. Part of the “Scottish Tour” for wealthy US guests

External Analysis

Competitor Analysis for The Monzie Aldourie Castle – similar operating model and target market to The Monzie

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Goals

•  Aldourie Castle – opened in 2012 www.aldouriecastle.co.uk/

•  Newly renovated castle on the shores of Loch Ness, fully booked every weekend from June to November this year (I called to enquire about a booking!) at £14,400 for 2-night (13 beds) plus catering.

•  Catering costs average of £130 per person per day

•  Closest competitor to The Monzie based on operating model and target market.

•  Clients mainly from UK, USA and Russia (info from Receptionist)

•  USP for Aldourie - Highland Castle on the shores of Loch Ness, with 200 acre estate.

External Analysis

The Monzie Vs Aldourie Castle How can The Monzie compete with Aldourie Castle on the international market?

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Goals

The Monzie

•  USP – Unique A-listed Church conversion with super cool interiors, situated at the foothills of the Highlands

•  The only Exclusive Use high-end converted Church in Scotland

•  Golfers paradise with Gleneagles Championship courses just 8 miles away, and St Andrews, home of golf, 1hr15 min drive

•  World-class hiking & mountain biking directly from The Monzie

•  Whiskey Experience – Crieff home to Scotland’s oldest whiskey distillery – scenic walk along the River Earn from The Monzie

•  Easy access from Glasgow & Edinburgh international airports (within 1 hour drive)

•  World class sales, marketing & PR team

The Monzie will compete with Aldourie Castle on the following criteria:

Price: 30% cheaper for a comparative product and service

Position: Ensuring that the Monzie is well positioned in the market place by utilizing our world-class UK & international sales, marketing & PR team. Realizing our Vision to be the No.1 Exclusive Use Venue in Scotland

Product: Ensure that The Monzie is renovated and finished to the highest possible standards, with absolute attention to detail, in line with guests expectations. Ensuring that the service delivery is second-to-none and The Monzie gains an excellent reputation based on customer feedback within the first year of operation

Place: Creating unique experiences for our guests utilizing the world class range of outdoor activities available in the area (golfing, biking, hiking, whiskey, shooting/hunting, fishing)

External Analysis

What are the key differentiators that will set The Monzie apart from the Competition?

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Service Product Offering

Business Strategy for the Digital Age

Network of Partnerships

•  Highly trained & professional staff delivering high-end personalized, relaxed service

•  World class dining experience with local Scottish produce

•  World class contemporary Scottish Highland Church conversion delivering a totally unique Scottish experience

•  Unique branding & market positioning

•  Best in Class Digital mobile platform, website, on-line booking

•  Expert use of social media platforms

•  Connectivity within the hotel

•  Partnerships and long-term close relationships with 3rd party travel agents & Corporate Hospitality providers. serving the high-end market, in all key locations (UK, US, Germany, Russia, France & Holland)

External Analysis







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Vision and Mission for The Monzie

Mission Our customers are our priority and we will provide them with an unique Scottish experience which is second to none. We will anticipate our customers needs and provide an exceptional level of service in a truly unique environment. We recognize that it is our employees and partners who will deliver this service and we will encourage and reward their commitment, hard work and loyalty.

Vision For The Monzie to be the No.1 choice for customers who are seeking a 5 star Exclusive Use Venue in Scotland, providing superb unique experiences and services to every customer.

Strategy & Plans

Making our Vision & Mission for The Monzie a reality

Our Vision and Mission Statements are the driving force for The Monzie, from which we have developed our 2 Year goals, with measured time-bound targets for each goal, which will filter down into the operational strategy for The Monzie

For The Monzie to be the No.1 choice for customers who are seeking a 5 star Exclusive Use Venue in Scotland, providing superb experience and services to every customer.

1.  To achieve 5 star rating by VisitScotland within first year of opening

2.  To win a Scottish Hotel Award within 2 years of opening

3.  To be rated in Conde Nast Traveller (or other) as one of the Top 5 hotels to stay in Scotland within 2 years of opening

4.  To be rated as one of the Top 5 wedding venues in Scotland, by 2 independent wedding associations or magazines, within 2 years of opening

Goals

Vision

Strategy & Plans

1.  Our customers are our priority and we will provide them with an unique Scottish experience which is second to none.

2. We will anticipate our customers needs and provide an exceptional level of service in a truly unique environment

1.  To be rated Excellent or Very Good by 100% of guests on TripAdvisor after Year 1

2.  Repeat or direct referrals to account for 25% of bookings after Year 2

3.  To achieve a 95% satisfaction level with guests within Year 1 (via our internal customer feedback process)

4.  To achieve Excellent rating from all PR / Journalist / Travel writers on familiarization visits to the hotel

Mission Goals

Mission

Strategy & Plans



1.  Our customers are our priority and we will provide them with an unique Scottish experience which is second to none.

2. We will anticipate our customers needs and provide an exceptional level of service in a truly unique environment

3. We recognize that it is our employees and partners who will deliver this service and we will encourage and reward their commitment, hard work and loyalty.

1.  We will introduce an employee bonus scheme within the first year, which will be directly linked to customer satisfaction and financial performance of the hotel

2.  We will empower all employees to make decisions to ensure a customer is satisfied, at the same as holding them accountable.

3.  We will communicate our Vision, Mission and goals to our employees and partners on a quarterly basis and ensure that we are all aligned on our common goals

4.  We will pay our partners (eg. Catering supplier) a fair price for the delivery of their service, and incorporate them as part of our wider team

Mission Goals

Strategy & Plans

The Monzie Development Team Bringing together a Talented Experienced team

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Goals

Name Position Role in the Development of The Monzie

John Burke Owner & Managing Director of The Monzie Hotel Ltd & Corryard Developments Ltd

Overall responsibility for project delivery and success – measured by opening The Monzie on-time, on budget to the required quality

Corryard Developments Ltd

Main Contractor Award-winning building company specializing in renovating Listed buildings. Winner of the following awards: 2010 Master Builder of the Year Federation of Master Builders – Best Large Conversion in the UK 2013 Winner Scottish Homes Award – Conversion of the Year 2013 Winner Herald Property Awards – Conversion of the Year

Bartek Zawilinski Director, Corryard Developments

Operation Director & Site Manager for The Monzie project, Bartek has been Site Manager for all Corryard’s award winning projects. Responsible for overall delivery of the project on-time to the required quality

Susie Whyte Supervising Architect & Interior Designer

Qualified architect with many years experience of high end projects in New York and San Francisco. Overall responsible for final architectural design and also interior design and finishings

McKenzie Strickland Architects

Lead Architect – Jamie Russell

Jamie and his team have been instrumental in achieving Planning Permission for the A Listed Old South Church. Jamie will be leading the development of the detailed construction drawings and working with Susie to finalise the detailed specifications for the project.

Strategy & Plans

The Monzie Development Team Bringing together a talented experienced team

46

Goals

Name Position Role in the Development of The Monzie

Campbell of Doune Structural Engineers

Hugh Campbell – MD and Lead Structural Engineer on the project

Hugh and his team are the structural engineers on the project, responsible for developing the all the engineering details and specification

The Keenan Consultancy

Mechnical & Electricial Engineers

Responsible for defining and implementing the M&E strategy for the project, to ensure that The Monzie is as efficient as possible once completed

Hamish Bell Associates

CDM Co-ordinator (Hamish Bell)

As CDM Co-ordinator, Hamish is responsible for notifying the HSE on commencing of the works, and overall responsible for outlining the Health & Safety Policy during the project

Hamish Bell Associates

Andrew Leonard – Quantity Surveyor

As Quantity Surveyor for the project, Andrew is tasked to produce detailed costs for all areas of the project, as well as monthly tracking of actuals versus planned, ensuring that the project is delivered on budget

Strategy & Plans

Executive Advisory Board at The Monzie

47

Goals

•  Our Vision is to be the No.1 choice for customers who are seeking a 5 star Exclusive Use Venue in Scotland, providing superb experience and services to every customer.

•  To realize this Vision, we have formed an experienced Executive Advisory Board (EAB)

•  The role of the EAB is 3-fold: 1.  Advise on the overall strategy for The Monzie, including branding,

positioning and marketing in the pre-launch phase 2.  Support the pre-launch and post-launch activities 3.  Advise and support on the operational delivery of the service, ensuring that

our service levels are truly world class

Strategy & Plans

Executive Advisory Board Members World-class experienced Board to steer The Monzie in the first years of operation

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Goals

Name Current Position Experience Key Contribution to The Monzie

Kiaran MacDonald

Managing Director, The Savoy Hotel, London

25 years international Hotel Management experience. Responsible for the multi-million re-opening of The Savoy in 2010

Strategic Direction and Operational Delivery

Andrew Hamer

Managing Director Wild Thyme Catering Ltd

Former Executive Chef at Gleneagles Hotel, before establishing high-end catering company, Wild Thyme in 2007, winner of UK Caterer of Year in 2012 & 2013

Operational Delivery F&B,

Theresa Feeney

Managing Director Highlife Marketing Ltd

Over 20 years experience in marketing & promoting exclusive private hotels worldwide, incl. Richard Branson’s Altas Mountain & Nectar Island resorts

Sales and Marketing Strategy and delivery (pre and post launch)

Charlotte Doherty

MD Charlotte Doherty PR

PR consultant focusing on privately-owned, boutique hotels. PR lead for Ballyfin Hotel, Ireland, multiple award-winning hotel - Top 5 hotel in the world as voted by Conde Nest Traveller

PR strategy, as part of the Marketing strategy

Strategy & Plans

Executive Advisory Board Members World-class experienced Board to steer The Monzie in the first years of operation

49

Goals

Name Current Position Experience Key Contribution to The Monzie

Mick Keane Business Analytics Director, Twitter Inc

Extensive experience of utilizing the www to drive business revenues, social media expert

Social media strategy as part of the Marketing Strategy

Ado Cosgrove

Creative Director, Owens DDB Advertising Agency

Creative brand marketing expert with over 20 years of developing leading brands and award-winning ad campaigns, linked directly to sales growth

Branding & positioning strategy as part of the Marketing Strategy

Sandy Fyfe Partner, Morrison & Young Accountants, Perth

Accountant with extensive experience in Hotel start-ups, financial appraisals and financing options

Financial positioning & funding / financial performance post-launch

Strategy & Plans

The Monzie Operating Team (once open for business)

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Goals

Name Position Role at the Monzie

John Burke Owner and Managing Director of The Monzie Hotel

Management oversight and governance role, ensuring that the business delivers on key objectives

To be Recruited 4 months out from opening

General Manager Responsible for the day-to-day operations at The Monzie, ensuring world class delivery of service. Key point of contact for guests pre-arrival and also during their stay. This position is a key hire for The Monzie, the Advisory Board will be involved in the selection process to find the right candidate

Aileesh Carew Operations Hotel Operations consultant. Former GM of Ballyfin Hotel

Aileesh will join the team on a part-time consultancy for 6 mths, starting 3 months from opening. She will develop all the operational guidelines & SOPs and lead the shaping of the product offering to ensure it is world-class when we open for business. Aileesh will also be involved in developing job profiles & recruiting the GM with the correct skillset to lead a world-class Exclusive Use Venue. Attention to detail is key to success.

Andrew Hamer F&B - Managing Director Wild Thyme Catering

Andrew and his team at Wild Thyme will be responsible for the delivery of all catering needs for guests at The Monzie (See back-up slides for sample Menu)

Theresa Feeney Sales & Marketing Consultant for The Monzie, commencing 6 months out from opening www.highlifemarketing.com

Theresa will drive the sales & marketing strategy at The Monzie, using her global connections she will start to position The Monzie in the market, including Familiarization Trips for key agents and operators. Development of experience activities in the Crieff area (golfing, whiskey, hiking, biking, fishing).

Strategy & Plans


51

Goals


Janine & Anthony Cifelli

Sales & Marketing US Agent - President & CEO www.janinecifelli.com

Janine will drive the sales & marketing effort in the US. Janine will introduce The Monzie to the 8000 travel agents her company regularly connects with across the US, who will then subsequently book The Monzie on behalf of their wealthy clients. Overtime, our vision is that a 3 night stay at The Monzie is on the “Scottish Tour” for all Americans coming to Scotland

Charlotte Doherty PR Consultant for The Monzie, commencing 6 months out from opening

Charlotte will drive the PR strategy for The Monzie, creating media interest 6 months from opening. Charlotte has a wealth of experience and connections to ensure the best possible media spotlight for The Monzie in the first year of opening

To be recruited Operations Receptionist / Coordinator / Concierge

Works closely with the GM to coordinate group itinerary prior to their arrival. Ensures that all the needs of the guests are satisfied during their stay, including catering needs, excursions, Spa etc. Act as wedding coordinator as required An additional receptionist / coordinator will be hired subject to demand

Strategy & Plans


52

Goals


To be recruited Operations Doorman / Concierge / Valet driver / Security

2 part-time staff members, shift work depending on guest bookings. Responsible for valet parking, as required by guests, doorman general security during guests stay. Helping out wherever needed.

To be recruited Operations Cleaners / housekeeping

2 part-time staff members, shift work depending on guest bookings. Helping out wherever needed.

To be recruited Operations Barman

Part-time staff depending on bookings, manage bar / whiskey room, serving guests. Helping out wherever needed.

•  In the first year, staff members (& associated wage costs) will be kept to a minimum and only increased in line with increased business

•  All staff recruited will have flexible roles so that they can assist and help out wherever the need is

Strategy & Plans

Target Markets for The Monzie Marketing focus will be on 3 key Target Markets

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Market Segment Target Location Target %

Group bookings Scotland 30%

Rest of UK 25%

USA 25%

Russia / Rest of EU 20%

Weddings Scotland 50%

Rest of UK 50%

Corporate -  Incentive Programs -  Destination Mgt Companies (DMC)* -  Meetings

Scotland 40%

Rest of UK 30%

Outside UK 30%

The Monzie Marketing Plan will be developed to focus on three Market Segments within the key market locations

*DMC – Contact made with a number of DMCs (including Andrew Burnet, Dream Escapes, Hello Scotland, K&N Associates, Kyles of Scotland), all of which responded very positively to The Monzie.

Strategy & Plans




•  Strategy & Plans –  Vision, Mission and Goals –  The Monzie Team –  The Monzie Advisory Board –  Target Market



54

Financial Forecasts for The Monzie

55

Goals

•  3 Year forecasts Apr 2015 to March 2018 - Profit & Loss, Cashflow Analysis and Balance Sheet

Financial Analysis

Year 1 (Apr 2015 – Mar

2016)


2017)


2018)

Turnover Nil £1,160,235 £1,380,740

EBITDA (£47,767) £708,396 £901,146

Net Profit (£76,984) £158,252 £292,432

Note: please refer to Excel spreadsheet and Financial Assumptions in Back-up Slides)

Financial Forecasts for The Monzie

56

Goals

•  Key Insights from Financial Forecasts: –  The breakeven point when fully operational (in cash terms, ie to cover

overheads and loan servicing) is turnover of £1,088,308.00 which is 78% of projected turnover.

–  The profit breakeven point is lower at £901,146 of turnover at projected margins, which is 48% of projected turnover.

–  Gross profit percentage overall of 65% (after commissions) is prudent –  Once fully operational, EBITDA achieved is 34% of turnover. –  If there is a 20% fall in turnover, and a 5% decrease in gross profit %, a

breakeven position would still be achieved. Similarly, a 10% fall in turnover coupled with a 10% fall in the gross profit % achieved would see the business achieve better than breakeven.

–  No revaluation has been included for the hotel once complete & operational, but it is likely an increment could be added, which would improve the Balance Sheet.

Financial Analysis







57

Risk Mitigation Plan Owners & Advisory Board have identified the Top 6 Risks for this Venture, and the associated mitigation plan to offset the risks

58

Goals

Corryard will be the main contractor on site, and Corryard has won many awards of this quality work, and has a strong track record of delivery on-time and on-budget

Builder fails to deliver the project on-time and to the required quality RISK 1

Need to ensure that an accurate funding package is agreed with the RBS to ensure that the final product is world-class and in line with guests expectations. Utilizing the Advisory Board throughout the development phase prior to opening

Finished product offering at The Monzie does not match market expectations

RISK 2

Utilizing Marketing & PR channels to correctly position The Monzie in the UK and international markets, ensuring that financial projections are met. Keep staff costs to a minimum in Year 1, reserve working capital to service loan payments

Fail to reach projected revenue levels, and business struggles to break-even and service loan repayments

RISK 3

Mitigation Plan

Risk Analysis

Risk Mitigation Plan Owners & Advisory Board have identified the Top 6 Risks for this Venture, and the associated mitigation plan to offset the risks

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Utilizing The Monzie’s PR team to correctly position The Monzie in the UK and international markets. Develop relationship with key booking agents. Develop pre-launch and post-launch plans, finalize Marketing Strategy and action plans

Having a fabulous product (the associated development costs) but no one knows about it

RISK 4

Poor service delivery once opened, leading to poor guest feedback (TripAdvisor etc)

Failure to find the right staff to deliver the expected service levels

Ensure Advisory Board are involved in recruiting the General Manager, ensuring that the GM has the right experience to delivery the expected service levels. Good pay levels & incentivization for all staff in place, linked to customer feedback.

RISK 5

RISK 6

Mitigation Plan

Involve a recruitment agency in finding the GM and other key staff members. Involve Advisory Board in the selection process, and referrals of high qualify candidates. Ensure that the GM and key staff are in place 3 months from opening.

Risk Analysis

Summary SWOT Analysis Positive Outlook for The Monzie based on balanced SWOT analysis

Strengths Weaknesses

Opportunities Threats

•  Experience Advisory Board and Operating team

•  Skilled contractor with Corryard, and attention to detail in the design & finishings

•  Outright ownership of property

•  Focused USPs and target market

•  Location – scenic and easy access

•  Crieff High Street – some empty units and unsightly Drummond Arms Hotel in the town centre.

•  Lack of guest parking on-site*

•  Lack of large estate grounds

•  Realization of Vision to become No.1 Exclusive Use venue in Scotland – currently no clear market leader

•  Scotland tourism industry is booming and Scotland is an attractive all-year round destination

•  Golfing and ripple effect from Gleneagles and Ryder Cup putting Perthshire on the global destination map

•  Global economic down-turn

•  Uncertainty around Scotland’s independence vote in September 2014

•  Potential for increased competition in the Exclusive Use market, leading to an over supply of venues

Risk Analysis

* Guests will have the choice of on-street parking or the off-site valet service offered by The Monzie at no extra charge

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Goals Back-Up Slides

The Monzie - Financial Forecasts Assumptions – April 2015 to March 2018

62

Goals

1.  Revenue 1.  Revenue as per management projections – revenue streams for:

1.  Revenue from hotel rooms 2.  Wedding revenue 3.  Catering (food and beverage) revenue 4.  Conference/Meetings and SPA

2.  Estimated bookings per management projections detailed for each month on Occupancy sheet with the estimated rate for each specific booking

3.  Revenue from 1 day / night exclusive use hire of The Monzie is £6,000 including catering (excluding beverages)

2.  Initial progression of trade with first six months projected revenue based on an increasing scale of estimated occupancy: May - 50% of estimated occupancy, June – 60%, July – 70%, August – 70%, September – 75%, October – 80%

3.  Operating Expenditure 1.  Management projection of the following pre-trading expenditure:

1.  Marketing & PR Costs commencing January 2016 £3000 per month with an increase to £8000 per month upon opening

2.  Employment of General Manager in January 2016, four months before opening 3.  All other employees starting April 2016

2.  Depreciation - Estimated at 15% straight line on non-current assets

Financial Analysis


63

Goals

2. Operating Expenditure (cont’d) 3. Operating Expenditure per management projections:

1.  Beverages & Catering based on an estimated outsourcing at £300,000 per annum. It has been assumed 30 days credit on this

2.  Spa expenditure is based on the monthly income which has an estimated 20% mark up on cost

3.  Consumables include cost for maintaining rooms, room changes etc. based on estimate of around £5 per room with an assumption of £500 per month

4.  Commission estimated at a rate of 20% per 50% of the total income figure 5.  Monthly wages calculated from annual estimations shown on separate schedule on

occupancy sheets. 6.  Bank Charges estimated 0.5% of total income figure.

4. VAT - Figures on each Cash Flow Forecast shown gross of VAT 5. Corporation Tax - based on 20% of EBITA less Depreciation to take into consideration capital

allowance relief generating deferred tax

3. Capital Expenditure 1. Total of £2 million capital expenditure – estimated £1,500,000 on building developments at

£125,000 per month over 12 months; and an estimated £500,000 on other non-current assets at £83,333 over 6 months.

Financial Analysis


64

Goals

4. Financing Expenditure 1.  Loan introduced on a draw down to fund capital expenditure on building developments and

operational fixed assets. 2.  Total Loan estimated at £500,000 over 15 years at a rate of 5% per annum. Interest

accrued from October 2015 to opening in April 2016. 3.  Six months interest-only repayments from date of first draw down to the end of scaled

increase of business (1.3 above). 4.  Capital repayments coming into effect January 2016. 5.  The remainder of the funding will be financed by an estimated £1,000,000 of crowd-

funding, which will be equity based at an estimated 20%. 6.  We have assumed no increase for RPI in either income or expenditure during the period of

the forecasts.

Financial Analysis

Sample Menu from Wild Thyme – caterers at The Monzie

65

Goals

Financial Analysis

•  Breakfast –  Selection of fresh fruit juices to include pink grapefruit and orange juice –  Selection of pastries –  Fresh fruit platter & Fruit yoghurts in glass jars –  Selection of cereals –  Toast and preserve –  Hot breakfast: Findonay bacon, pork and herb sausages, sweet vine tomatoes and mushrooms, fried eggs and

scrambled eggs.

•  Plated Lunch (can be delivered and served at any off-site location, eg. Loch-side if fishing) –  Starter - Salad of baby beets and golden beetroot with Whisky-cured salmon and lime crème fraiche –  Main - Pot-roasted quail with spring vegetable pearls and a light tarragon and Jersey Royal broth –  Desert - Caramelised baked lemon curd tart with lime sorbet –  Fairtrade coffee and Clipper organic teas

•  Afternoon Tea –  Selection of finger sandwiches –  Mini smoked haddock and mull cheddar puffs –  Pigs in blanket –  Whisky éclair –  Mini seasonal fruit brûlée –  Fruit cake & Home-made scones with Dalchonzie preserve and clotted cream Selection of fruit and organic teas

Sample Menu from Wild Thyme – caterers at The Monzie

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Goals

•  Dinner menu –  Starter - Free-range duck egg with a spring pea, morel and broad bean salad, crispy pancetta and truffle

hollandaise –  Main - Tournedos of Loch Duart salmon rarebit, spring pea risotto, sweet vine tomato and wild garlic pesto –  Dessert - Rhubarb and ginger pavé with carpaccio of rhubarb, vanilla bean custard ice-cream and candied

ginger crisp –  Fair trade coffee and organic teas

•  Breakfast, lunch and dinner - £1,700.00 ex VAT per day

•  (At full occupancy – 24 guests - £70.83 per head ex VAT)

•  Staffing –  1 x head chef –  2 x waiting staff on site for set up, service and clearing

•  Notes: –  Each groups dining requirements will be customized to their individual needs with menus developed and

agreed prior to arrival –  Menus and staff requirements will be adjusted to accommodate all catering requirements at The Monzie,

including 100 guest weddings

Financial Analysis

themonziebusinessplan hotel

Documents

monzie hotel

monzie close

executive summary home

executive summary location

bank funding

funding request

crieff locality

owners funds