The Old Course Hotel, Golf Resort & Spa in St Andrews has reported a reduced pre-tax loss of £890,000 for the year ending December 2024, narrowing from the £1.4 million loss posted in 2023. While the financial statement highlights revenue growth and operational gains, it also underscores mounting liabilities and reliance on the support of its American parent company, Kohler.
Revenues Rise but Losses Remain
According to the latest accounts, the five-star resort generated £30.8 million in revenue during 2024, representing a 9% year-on-year increase. This growth was driven largely by pricing adjustments, higher occupancy rates, and the ability to maintain premium positioning in the competitive Scottish luxury market. The hotel managed to deliver an operating profit of £1.5 million. However, increased financing costs, stemming from higher borrowing, offset these improvements and kept the business in the red.
The pre-tax loss of £890,000, although still significant, marks an improvement on the prior year’s performance. The figures suggest that while management has made operational strides, structural financial challenges remain unresolved.
Parent Company Support and Borrowing
Perhaps the most pressing concern is the sharp rise in net liabilities, which more than doubled over the reporting period. Net liabilities climbed to £9.1 million, up from £4.4 million the year before. This was primarily caused by increased borrowing from other parts of the Kohler group, which rose from £3.3 million to £8.7 million.
The hotel’s directors have sought to reassure stakeholders, pointing to a letter of continued financial support from Kohler. The American multinational, best known for its presence in manufacturing, plumbing, and hospitality, has been the long-term backer of the Old Course Hotel. Management maintains that this relationship provides a financial safety net, mitigating liquidity and solvency risks. Nonetheless, the scale of borrowing highlights the reliance of the Scottish resort on cross-border financial support.
Operational Developments and Efficiencies
On the operational front, 2024 saw several key improvements designed to reduce costs and enhance customer experience. A new combined heat and power system was installed in April 2024, significantly reducing utility bills and promising long-term energy efficiency. This investment reflects a broader industry trend where luxury resorts are pursuing sustainability measures not only for cost containment but also to align with guest expectations and regulatory pressures.
Another boost to operations came with the reopening of the Jigger Inn, the historic pub located on the hotel’s grounds. Following a substantial refurbishment, the pub reopened in May 2024, quickly regaining its reputation as a must-visit destination for both locals and international golf tourists. Its reopening contributed to ancillary revenue growth, enhancing the property’s brand appeal.
Strategic Moves in Golf Course Management
The resort, which also owns the Hamilton Grand apartment building and manages The Duke’s Course, is undergoing a significant shift in golf course management. Kohler is in advanced negotiations to transfer the management of The Duke’s Course to the St Andrews Links Trust, with a handover expected by the end of 2025.
This move has strategic implications. St Andrews Links Trust already oversees seven public courses, including the world-renowned Old Course. By integrating The Duke’s Course into its portfolio, the Trust aims to ease high demand across its existing courses. For Kohler, the transfer reduces operational pressures and potentially refocuses resources on its core hospitality operations. For visitors, the consolidation could improve access and booking flexibility, given the Trust’s streamlined systems.
Balancing Prestige and Profitability
The Old Course Hotel remains one of Scotland’s premier golf resorts, with a global reputation linked closely to the prestige of St Andrews itself. Its prime location adjacent to the iconic Old Course ensures a steady flow of international tourists, particularly during major golfing events. Yet prestige alone does not guarantee profitability.
The hotel faces ongoing challenges in balancing operational excellence with financial sustainability. Rising interest costs and increased group borrowing highlight the structural difficulties of operating a high-capital resort in an uncertain global market. Fluctuations in international travel, cost-of-living pressures in the UK, and volatility in financing conditions all represent ongoing risks.
Wider Industry Context
The struggles of the Old Course Hotel reflect broader trends across the luxury hospitality and golf tourism sectors. Despite high demand for premium experiences, operators face cost pressures from wages, utilities, and debt financing. While revenues have rebounded post-pandemic, many businesses are still grappling with legacy borrowing and higher interest rates.
In Scotland, golf tourism is estimated to contribute over £300 million annually to the economy, with St Andrews at the heart of this ecosystem. The Old Course Hotel, therefore, remains strategically vital not only for Kohler but also for the local economy. Its ability to attract affluent visitors supports restaurants, transport services, and retail outlets across the region.
Looking Ahead
The next twelve months will be crucial for the resort. The handover of The Duke’s Course, if completed smoothly, could provide operational relief and streamline the hotel’s focus. The continued rollout of energy-efficiency projects promises medium-term cost savings. Additionally, ongoing investment in customer experience, such as refurbished amenities and premium dining, should maintain the resort’s competitive positioning.
However, the hotel’s financial trajectory remains dependent on two key factors: the ongoing support of Kohler and the broader economic climate. With liabilities at their current level, the resort’s independence is limited, and management will need to demonstrate that operational profits can gradually reduce reliance on parent company financing.
Conclusion
The Old Course Hotel’s 2024 accounts paint a picture of cautious progress. Revenues are rising, operational profits are being delivered, and strategic initiatives are being pursued. Yet underlying financial fragility persists, with net liabilities at record levels and losses continuing despite improvements.
For stakeholders in the golf and hospitality sectors, the resort’s journey offers a case study in balancing brand prestige with financial discipline. The decisions made in the next year—particularly around course management, debt structure, and operational efficiency—will shape whether the Old Course Hotel can convert its global reputation into sustainable profitability.
In the meantime, the property remains an essential part of Scotland’s tourism and golf economy, attracting visitors from around the world to the “Home of Golf.” With Kohler’s backing and careful strategic adjustments, it has the potential to steady its finances while continuing to deliver the world-class experiences for which St Andrews is renowned.
