News has reached us that the wonderful 25 bed 37 lodge hotel that is Trenython Manor is on the market. Knight Frank has the property listed for offers in excess of £2,750,000. A former Club la Costa branded resort, now under the Wyndham banner.
Trenython was built on the estate of Little Pinnock in 1872 by an Italian architect commissioned by Giuseppe Garibaldi, a famous Italian general, politician and nationalist. Garibaldi built the manor as a reward to Englishman John Whitehead Peard, who had served him loyally in several of his campaigns and was from nearby Penquite.
In 1891 the house was purchased by Bishop Gott, the third Bishop of Truro and it served as a Bishop’s Palace for 15 years. For 50 years following the departure of the Gott family, Trenython was run as a convalescent home by Great Western Railway for recovering railway workers. It stayed this way until 2006 when Club La Costa bought the Manor for use as a Hotel and Spa.
The reason
Not being privy to board meetings at either CLC or Wyndham TCA can only guess as to the reason for the sale. Apart from the surge in “staycations” created by the Covid pandemic, current holiday trends are once again returning to the hunt for the sun destinations. We also know that timeshare ownership and sales in Europe in general, especially the UK, are on the wane, could these be the reasons?
According to specialist hospitality industry website RSM, their research had a worrying header:
“UK hotel industry ends 2022 on a positive note but 2023 will be a “see-saw” with mixed fortunes”
The article we read also had further veiled bad news:
“Revenue per available room (RevPAR) also dropped from £103.41 (November) to £96.27 (December) in the UK, but increased in the London market, from £167.48 to £169.72. Gross operating profits of UK hotels fell from 35.2% (November) to 32.7% (December), and from 43.4% to 42.7% in London highlighting that, although room rates remain strong, profits are still under significant pressure due to rising costs.”
The last line tends to say it all “profits are still under significant pressure due to rising costs”. This presents a particular problem in the hotel/hospitality sector, with consumers feeling the pinch, raising room rates would not be sensible, but on the flip side expenses and staff costs are increasing, more profit or just breaking even can only be achieved by increasing prices, a sort of catch 22.
Booking.com shows an average room rate in July at Trenython of £177; if the Gross operating profit is 32.7% (as per the above) then each night yields around £57 gross profit. If occupancy was 100% (which currently according to the report is 66%) the hotel letting all 25 rooms would see a gross profit of £1,425 per night. From this the entire expenses of running the hotel must be deducted to get to a net profit, the margins are slim to say the least. At 66% occupancy the figure drops to £944.
TCA comment
Recently we reported on MacDonald Resorts placing Plas Talgarth on the market, from this report it appears that Trenython Manor is going the same way. As the majority of businesses are striving for healthy balance sheets yielding corporate profit, if it appears that one or a number of parts are not performing as well as they should, get rid. Cash flow is also of paramount importance, which to maintain may involve selling assets, either way this is potentially bad news for those CLC owners whose home resort is Trenython or who absolutely love holidaying there.
Is the expected buyer going to be another timeshare developer? Unlikely, Wyndham are the largest timeshare developer on the planet and if they seemingly don’t want it, who does? The price ticket is extremely attractive but if a business cannot turn a profit, it’s an investment not worth making.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk