Aberdeen’s prestigious Marcliffe Hotel has recorded a pre-tax loss nearing £2 million, almost tripling its deficit from the previous year, as the five-star establishment continues an ambitious programme of investment and contends with escalating operational costs. Newly filed accounts for the period ending March 31, 2025, reveal a loss of £1.9 million, a significant increase from the £674,877 loss reported in 2024.
Despite the substantial losses, turnover for the period rose to £5.1 million, up from £4.9 million in 2024, indicating robust demand even amidst a difficult trading environment for the broader hospitality sector.
Sir Jim Milne, owner of The Marcliffe through his Balmoral Group, attributed the financial downturn primarily to rising costs and ongoing, extensive upgrades to the hotel’s facilities. In his chairman’s report, filed on Companies House, Sir Jim stated: “Despite challenging economic conditions, the company has generated turnover of £5.17m in the 13 months to March 2025. However, consistent with the rest of the hospitality industry, the company has seen a significant increase in costs with increases of food, national minimum wage and energy prices contributing to the increase in operating loss to £1.8m.”
The UK hospitality industry has faced considerable headwinds, with businesses grappling with increased staffing costs, soaring energy bills, and elevated food and drink prices. The National Living Wage and National Minimum Wage saw significant increases from April 2025, disproportionately affecting the labour-intensive hospitality sector and having a ripple effect across all wage brackets. Consumer spending has also remained cautious due to the cost-of-living crisis, with many households reducing discretionary leisure spending.
Against this backdrop, The Marcliffe has pressed ahead with substantial enhancements. Key developments include the imminent opening of the new £5.5 million Skylark glass-domed brasserie at the end of January 2026. Further investments have seen the opening of The Cushie, a new whisky and sports bar, and the conversion of nine bedrooms into luxury suites featuring upgraded interiors and modernised amenities.
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The commitment to enhancing the guest experience extends beyond physical upgrades, with investment also made in staff training. The hotel employed 199 individuals during 2025, incurring a total wage bill of £3.2 million.
In a significant strategic move post-year end, Balmoral Group, a privately-owned conglomerate established by Sir Jim Milne in 1980, completed the acquisition of the neighbouring Woodbank estate from Shell last month. While the exact multi-million-pound value of the transaction was not disclosed, this acquisition nearly triples The Marcliffe’s estate from eight to 22 acres, incorporating the 14-acre property that previously operated as a private members’ hotel and leisure complex for Shell employees. Sir Jim stated that “This strategic acquisition will nearly triple the size of the Marcliffe estate and create new opportunities for growth development and enhanced guest experiences.”
This long-term investment strategy, common in the luxury hotel segment which shows more resilience with less price-sensitive clientele, positions The Marcliffe to capitalise on future growth, even as the wider industry navigates persistent economic challenges and cost pressures.
