The Cumberland secures deal for iconic island hotel
The Cumberland has helped a former social worker break into the hospitality industry by buying an iconic Scottish hotel.
Nicola Souter took over the Castlebay Hotel in the Outer Hebrides at the start of April purchasing the property for £925,000 with The Cumberland providing £550,000 to support the acquisition. It marks a major change of direction for her after working as a social worker and running Airbnb properties.
Dating back to the 1860s, the hotel sits on the Isle of Barra, in the south of the Outer Hebrides. Although remote, it is accessible by ferry and plane, with the island’s beach serving as the landing strip.
Nicola, from Edinburgh, had decided to switch careers after 10 years as a social worker. Owning her own business was a large part of the appeal of the hospitality sector, and after a deal for another hotel on Barra fell through she settled on the Castlebay.
She said: “I had got to my mid-thirties and felt like I wanted to do something different and not do social work forever.
“I knew that if I was my own boss I would have much more creative autonomy. Being a hotel owner you can create a brand and how you want it to be.
“I had studied the Outer Hebrides tourist market. I knew that more people were wanting to do staycations rather than going abroad. It seemed like a good option.
“It needs quite a lot of work but it was a very profitable business. So I knew that it was a good choice.”
The hotel has 15 rooms sleeping up to 28 people. Nicola has also bought the adjoining Castlebay Pub, another island institution.
She views this as a long-term project for at least 10 years and, drawing on her creative background as a potter, has plans for an art studio, classes for schoolchildren and workshops for adults. There’s also scope to install a wind turbine behind the hotel as part of her commitment to operate sustainably.
She said: "Barra is amazing. It's very wild and beautiful. The island is only 8km by 5km so you can cycle round it quite easily.
"It's the start of the Hebridean Way which is a walking route from Barra up to Harris. A lot of people start off with us and then do this route up to the top.”
And she has already enjoyed the hospitality of the close-knit community on Barra, whose population is just over 1,000.
On the day she had to transfer the money for the sale of the hotel, it wasn't as easy as 'popping to the local bank'.
Nicola explained: "Peter, the guy I was staying with, organised a fishing boat to pick me up at 6am and take me up to South Uist, then a taxi to take me up to Benbecula. I then had to get a boat ride back to Barra with another islander.
"To know people who know people, that was one of the best things at the beginning. I would never have known I was able to call the fishing boat to take me up there. That was a fine start."
The Cumberland team who worked on the Castlebay Hotel deal were Commercial Business Development Manager, Derek Smith, and Senior Associate, Kerrie Deakin.
Nicola said they believed in her when she was finding it hard to get finance from the major banks.
“Whereas most people wouldn't have believed it was a good option or that I could do it, The Cumberland did. They totally backed me.”
Derek said: “This is the first transaction that the Society has completed on the Isle of Barra.
“However, Nicola had prepared an excellent business plan and had researched the island and hotel extensively. She was fully committed to the purchase and we were keen to support her in achieving her ambition.”
The Cumberland is proud to offer its commercial customers a fully relationship managed service, with each client given a single point of contact for queries regarding their hospitality business mortgage. The team is made up of several experienced bankers who are based in key areas across the UK,
including Scotland, Cumbria, Devon and Cornwall.