Chalet owner says numbers don’t stack up for it to remain a hotel
REFURBISHMENT costs for Le Chalet Hotel could stretch up to £9m. – with up to £50,000 being spent on each room – and banks would not be prepared to finance the work, a planning appeal has been told.
Vista Hotel Properties Ltd saw planning permission to convert the hotel above Fermain into 17 residential units denied on the grounds that it was still a viable hotel.
But the group set out its argument for why the numbers did not stack up for the hotel to reopen.
Planning law advisor James Le Gallez denied that his client had allowed the hotel to fall into disrepair, stating that the building needed £6.7m. of essential work when the company bought the hotel for £1.6m. in 2010.
It has been closed since 2012.
It was calculated that £9m. would be needed to get the hotel to a four-star standard, £8m. for three-star, £6.8m. for two-star and £6.7m. for either one-star or self-catering.
But based on a loan-to-value ratio the bank would lend only £2.45m. for four-star and much less for the other options.
Marketing and tourism director Mike Hopkins said the hotel was a profitable three-star business up until the day it closed.
‘It is in a different state now, but that has been allowed,’ he said.
He said the refurbishment costs had risen only over the last few years, resulting in bigger bills for any redevelopment.
He was concerned about the precedent that could be set by allowing the change of use.
‘We know there are more profitable routes out [of tourism] for hotels, whether it’s care homes or residential,’ he said.
‘At the end of day we want to keep hotel stock maintained.
‘There is a strategy for growth [in tourism].’
There has been a 29% drop in beds since 2007 as part of a managed reduction.
Planning director Jim Rowles said now they were left with the core hotels, which needed to be kept.
‘We are most concerned about the affect effect the loss of this exceptional site will have on tourism,’ he said.
The figures from the nearby four-star Fermain Valley Hotel – also owned by the same group company – were used to compare with the possibilities for Le Chalet.
Hotel manager Tim Coates said that refurbishing each room to a four-star standard would cost £50,000 and to a three-star standard would cost £32,000.
Mr Hopkins said these figures were much higher than he had heard of for similar hotels.
Planning tribunal members did ask what would happen to the site if the appeal failed.
‘It would just be left,’ Mr Le Gallez said.
‘It is certainly not going to be a hotel.’
The tribunal decision will be announced in several weeks.
