Funding the Repositioning of an 18 Bed Hotel

The Requirement:

Our clients approached us to arrange funding for the acquisition of an 18-bed hotel in Keswick that was trading under a traditional, staff-heavy model with breakfasts included. While the hotel showed strong top-line performance, profitability was being held back by high operating costs, particularly around staffing. The opportunity was not just to acquire the property, but to fundamentally improve the business model and long-term returns.

The Interesting Stuff:

The clients planned to reposition the hotel into a lean, self-service operation aligned with their established brand. This included refurbishing the property to match their existing style, introducing self check-in across the building, and creating two distinct offers within one site: standard guest accommodation alongside a dedicated dog-friendly wing.

They also planned to remove breakfasts and simplify the overall service offering, replacing in-house staffing with outsourced cleaning and laundry, supported by systemised guest communications.

The aim was to maintain attractive room rates while significantly improving profitability through a more efficient and scalable operating structure.

How we helped:

We began by reviewing the hotel’s historic trading performance to understand both its strengths and the pressures on profitability. From there, we recast the financials to reflect the proposed new operating model, removing the legacy cost structure and replacing it with the clients’ lean, self-service approach. This allowed us to build a clear, realistic and forward-looking set of projections.

Using this, we prepared a lender-ready business case and cashflow that clearly demonstrated how the repositioned hotel would operate, perform, and service the proposed borrowing. The focus was on showing not just that the acquisition was viable, but that the new strategy materially improved the sustainability and profitability of the business.

The Outcome:

On the back of this work, we secured a 65% loan-to-value facility on a two-year fixed basis. This enabled the clients to complete the acquisition and move forward with their repositioning strategy, putting the business on a much stronger footing with a more efficient operating model and improved long-term profit potential.