Loch Rannoch Highland Club Forums

I note from the minutes of the AGM that concerns were raised about the rental’s profitability and that a net rental analysis was being prepared. It will be interesting to see this and also the previous analysis from the club’s accountants as to why the sale of the apartments / studios should not be pursued. As the latter report was prepared on behalf of the members of the club it is not unreasonable for it to be made available on this forum.

It is clear that even with the best sales strategy in the world, the existence of club owned weeks is a generational issue. There is no overwhelming demand for timeshares and a substantial reduction in owned units is not going to happen.

So where does this leave us?

The large pool of club owned weeks has created a significant shortfall in management fees which has been offset to some extent by rental income. This is to be welcomed and it looks like the current year prospects are good. However the suggestion that management fees would have to rise by 28% in the absence of rental income is difficult to see. I don’t think anyone is questioning the short term value of such income though.

What I have tried to do in an analysis of last year’s accounts is to try and determine a rough snapshot of what the club owned weeks is costing us by taking the rental income less an allocation of costs. I have not been able to attach my analysis to this posting so I will narrate instead. The assumptions can easily be challenged (up or down) but it does give a starting point for discussion. The analysis suggests that the net cost is over £200,000.

The starting point is income. Taking this as rental of club weeks, bonus weeks and resales of club weeks, this gives a total of £365k.

Expenditure. I have taken here the commission on online bookings (£119k) and an allocation of 25% of establishment cost and housekeeping costs, and a similar allocation of admin wages, insurance and telecoms etc.

Overall costs are therefore about the £570k level.

One other point that stuck out is that member weeks seem to be bearing the entire cost of the leisure centre charge.

So, if the studios etc were sold, what would be the overall impact?

To what extent would rental income fall? Would it be replaced by the rental of other owned units? What establishment, housekeeping and administrative costs would be saved?

As I say it will be interesting to see the club’s formal analysis and also the report from the accountants.

Hi Alex003,

You have asked some excellent questions here.

I have asked at the AGM the same question for the past 2 years and I have been met with the same non reply which is an insult to the owners.
The reason for the muted response and like you I have dissected the accounts, is once you add all the additional expenses involved in rentals such as booking.com, cleaning expenses, etc the profit would be marginal if any.
Any decent management would create cost bases for each department which is what many hospitality establishments would do to ascertain the underlying net profit, and I have verified this with Chartered Accountants which would then give a true reflection of whether we are actually making money.

The bigger issue for me is why after over 14 months, as you quite rightly say why has this figure NEVER been declared.

In regards to the analysis from previous accountants on the sale of lodges and apartments, that was always in my opinion doomed to failure as some were dead against it, but like you I look forward to the extremely pertinent information.
Maybe the bigger question to ask is can it be explained in more detail the source of the third party loan that was rejected?

Having read the last couple of responses, my view is that the lack of an adequate response by the GM to specific relevant questions re rentals / profit etc is both unsatisfactory to all owners and an insult to anyone’s intelligence. An owner has quite properly asked a question re finances at the 2024 AGM and the same question at the 2025 but has received no satisfactory answer. The answer given this AGM was that “ we are working on it”. A shocking official club answer and what is even more concerning is that the Committee who are all Directors of the club allow this form of prevarication to continue.
Why should this be? One can only guess why.
The club has many owners who are clever and educated people and can figure out what the answers are in reality but they need to hear it officially and not just be fobbed off by a club employee