One of the most demanding projects that Maritime have undertaken was also one of the most rewarding.
Having initially been instructed to evaluate a four-star hotel business, create value and provide an exit for investors, Maritime ultimately took over the day-to-day running of hotel operations over the course of a four-year instruction.
Maritime has a long track record in hospitality, having previously owned and managed, constructed and leased hotels across the UK.
Acting on behalf of a 120-strong investor group, we produced an initial report that analysed the asset, a hotel estate on the Yorkshire coast north of Whitby, calculating its value and suggesting refinancing options.
In March 2019 Maritime was then given a board position, providing us with further access to company data.
Our subsequent analysis uncovered poor financial practices, and in order to avoid it falling into administration, Maritime took over 75% of the company and began managing the company on behalf of the lenders.
What had begun as an initial review quickly escalated to reveal serious financial issues, and it became apparent that there was a strong prospect of the lenders not getting their money back.
We then reviewed where trade and revenue streams could be improved, and presented proposals to the 120 individual lenders to build a holiday village on the site, which would enhance the saleability of the asset.
In 2018 Raithwaite Sandsend had obtained a non-implemented planning permission for 190 holiday homes. Work needed to begin within three years to secure the permission, and the lending group agreed with our contention that ‘developing out’ was the best way of exiting the position.
We worked with architects on designs for the village scheme and engaged consultants to overcome pre-commencement planning conditions.
Just as finances were improving, the Covid pandemic struck.
More than 120 hotel staff were furloughed, and limited turnover and a negative balance sheet meant that conventional lending facilities were unavailable to us.
Maritime sought Government CBILS and British Enterprise Fund loans in order to create cashflow to allow the business to continue trading.
A luxury six-bed lakeside accommodation unit on the estate was sold to a private buyer, and Maritime also lent £1.2million to the business and deferred fees until the end of the project.
Once lockdown and Covid precautions were eased, the hotel began trading well.
2021 was a bumper year, with more than 95 per cent occupancy rates achieved.
We then took on the management of the hotel itself, replacing the existing management company. This allowed us to review the business on a truly granular level. Maritime implemented a full rebrand and brought in a new marketing strategy to grow and reposition the target audience, all of which boosted trading performance.
The asset was performing well by the end of 2021, but Brexit and inflation hugely increased costs and made it difficult to fill roles.
High staff turnover, with a reliance on employment agencies, at times led to a literal hands-on approach from the Maritime team.
Maritime also had to manage investor relations throughout this period, with a number of technical legal disputes within the group.
Ultimately the decision was made to sell Raithwaite Sandsend on the open market. Experts calculated a guide price of £12 million, and in May 2023 a £12.65 million deal was agreed with Galliard Homes and O’Shea Group.
These reputable developers have now begun implementing the Raithwaite Village scheme and improving the hotel.
The outcome was the best that the investor group could have realistically hoped for.
Importantly, the hotel stayed open and fully staffed during and after the pandemic period, thanks to a lifeline loan facility provided by Maritime.
The project was an extraordinary learning curve, and possibly the biggest task we have undertaken thus far.
Maritime were involved in every facet of the business, with our expertise proving crucial in areas such as property, employment, corporate, contract and banking law.
We oversaw the day-to-day running of the hotel, managing a team of 120 people and continuously reviewing where operations could be improved.
Cashflow management was absolutely key, and our knowledge of administration and litigation processes was extensively utilised.
We also worked closely with architects to redevelop the hotel and formulate the Village scheme.
A number of planning permissions were also obtained, including a 30-bedroom extension and five woodland suites.
This challenging engagement has informed and enhanced all of our subsequent investments, providing the Maritime team with invaluable experience across the widest possible range of sectors.
