Welsh hotel overcomes coronavirus pandemic
The Merrion Hotel faced with a calamitous possibility of never opening again after it was closed down. The business, which has been in Paul Bream’s family for generations, survived when the furlough and business support schemes came to its rescue.
For 70 years, the seafront hotel, run by Paul Bream and his brother, survived all challenges and was never closed. However, when the family was forced to lock the doors of the 64-bedroom hotel for the first time, it became a major challenge to the family, both financially and emotionally.
“The business has been in my family since 1949 – for four generations,” says Bream. “This is more than bricks and mortar to us, this is who we are. It’s part of our family and part of our identity so to say that it’s important to us wouldn’t even get close. We have heritage here, long-standing relationships with guests who have been coming for years. We’re part of their lives, they’re part of ours.”
According to Paul, June is usually the beginning of the peak season for Merrion Hotel. Every year, this is often the period longstanding guests return to the hotel and Llandudno. But that didn’t happen this year. When the hotel door was closed on March 21, Paul and his brother, Gareth, were not sure when they will usher in their guests. Paul says, “Normally, we would only close for January because there is a post-Christmas and New Year hiatus when people just don’t go away. But from the beginning of February, we’re open, February and March are a kind of shoulder season for us, then we get to the end of March when really our summer season begins and runs all the way through to October when we have another shoulder season before Christmas.
“At the moment we would be in the heart of our season. This is the first time in 70 years that this kind of thing has ever happened and to be closed as we are through the season is bizarre.”
The life-saving package of support from the UK Government has proved invaluable in helping the business weather such a difficult time, especially with 47 staff on the books and bills to pay in order to keep the 120-year-old building without any paying guests. After a “deeply unsettling” period of time from mid-February to when they closed on 21 March, announcements of a raft of measures to support businesses allowed the family to “breathe a sigh of relief”, says Bream. “We kept our commitment to staff in the hope that something would come along, but it was deeply unsettling because we just didn’t know what was going to happen. Then, the UK Government announced the furlough scheme and we just breathed a sigh of relief. We could hunker down for a bit,” according to Paul.
Paul Bream, and his brother, Gareth Bream.
The Bream’s family have been the owners of the Merrion Hotel for generations.
In addition to the furlough scheme, it enabled the hotel to furlough all 47 staff without making any redundant. Also, they have benefited from the decision to halt business rates via a business rate relief provided by the Welsh Government. On top of that, the UK Government’s Coronavirus Business Interruption Loan Scheme (CBILS), which provides businesses with loans of up to £5m, with no interest due for 12 months, has allowed Bream and his brother to continue paying their bills to ensure they are ready to start trading again as soon as they’re allowed to reopen. Paul says, “Obviously with a building this size – we’re a 120-year-old building – the standing costs don’t stop simply because we lock the front door. We have ongoing costs which we can’t get away from. For example, our broadband alone costs about £500 a month. So we wanted to make sure that we had enough liquidity in the business for however long this lasts and not have any issues with our suppliers and be ready to hit the ground running when lockdown is lifted.”
The CBILS loan did more than a helping hand to pay the bills. It also enables the business owners to maintain the confidence of their suppliers. Paul says, “Business for me is all about relationships, both from the customer side and the supplier side. It’s very, very important to us that our suppliers have confidence in us because it’s a two-way street – we have to work with them and trust them and vice versa. For them to know that we are in a secure place going forward hopefully allows them to run their business and be in a position ready to supply us as and when we reopen.”
It was important for Bream that the bank responded quickly and positively. Although they had built a long-term relationship with their bank over the years, the support of their bank ensured he could get the loan, also, it helped in alleviating some of the worry at an incredibly stressful time. He also explains that “the CBILS loan was offered at the beginning of this and we weren’t sure whether the scheme would be withdrawn or reduced or changed so we took the loan while it was on offer – whether we used it or not was another thing. “Barclays have been superb with us, we are very fortunate to have a great relationship with our manager. They understand our business and have gone to great lengths to help us. They are another supplier so it’s important for us. We have been with them for probably about 50 years. It’s important for us that they understand us and we can confidently do business with them. They were as quick as they could be with the difficulties that they faced – obviously they were faced with a tsunami of applications.”
Bream has benefited from the package of support which keeps the business afloat, but they are still cautiously optimistic about the future and admits there are still challenges ahead. Paul explains, “We have a wonderful client base, we have built up relationships with people over the years. I constantly get phone calls from guests asking when they can come back. All that is really heartening because once we can get the message out that we’re back in business I feel fairly confident that there will be a bounceback and we can trade again.
“Maybe the staycation will be the thing for a couple of years, which would be great, but we have still got to present a safe and reassuring image to customers who are coming away and we want to be in a position to do that,” as Paul said.