August is always a particularly busy month for Marc Hughes’s rental business, VIP Apartments. With 13 luxury flats available for short-term lets in the centre of Edinburgh, the firm’s properties are in great demand from the stream of tourists who invade the city each year, as well as those who come to town for the month-long arts festival. Add to that the extra crowds attracted by the Commonwealth Games that have been taking place recently in nearby Glasgow, and bookings have been solid for most of the summer.
Requests for accommodation were coming in such a large volume earlier this year that Marc realised there was a great opportunity to expand his business’s property portfolio and make an almost immediate profit. All he needed was a short-term loan of £18,000 to cover the up-front costs of leasing three new properties.
“The rest of the year we get a mix of business and tourist customers, but there’s always a strong holiday market for the festival,” Marc says. “All of the events taking place in Scotland this year have meant that the holiday season has been extended, and I didn’t have enough properties to meet all the booking requests we were receiving. Business was going well, and I’d been thinking of taking on more apartments anyway, so now seemed the right time.”
At first, Marc turned to his bank to find the money he needed. But he was turned down for a loan, despite having had a good relationship with the bank previously, and having presented a healthy balance sheet and solid business plan for his hospitality business.
“I’d done my calculations and had a guaranteed rental income over the course of the summer that more than covered the amount I wanted to borrow,” Marc adds. “Then I talked to Boost Capital, and they understood my position and got the funding to me within a week of my application. The extra capital meant that I could bring the three new properties onto my books quickly, and cover a few extra bills besides. And being able to repay the loan quickly fits perfectly with the way our business works.”
VIP Apartments is relatively young, having started out in 2012 with just one rental flat in central Edinburgh, then quickly increasing to four. So successful was Marc’s vision for a series of serviced apartments that offer guests all the luxury of a high-end hotel that he was able to repay the start-up loan he had borrowed from his father in a matter of months, and expand the number of properties available further still. His formula clearly appeals, as his apartments are rarely empty, they get rave reviews that often surpass those of local five-star hotels, plus the business recently won a hotel of the year award for the serviced apartment sector.
Marc believes that his three-man team could grow to manage a portfolio of 20 apartments across the New Town and Old Town areas of the city, but he maintains that he’s still more driven by quality than quantity. His focus remains steadfastly on ensuring a premium level of accommodation and customer service in all of the apartments he manages.
“The idea for this business was born out of my experience working for another serviced apartment company and realising that I could do it better,” Marc explains. “There are a lot of people out there doing something similar in this city, but I don’t think they do it with as much care or attention to detail as we do. We rent residential property in prime locations, but we want it feel like a hotel. We provide a hotel service, alongside all the comforts of home. But it’s vital to maintain quality control – that’s what sets our business apart from the competition.”
One thing that Marc is very pleased about is that he didn’t miss out on valuable extra business this summer. He concludes:
“It was nice to deal with people at Boost Capital who really looked at the reality of my business and its ability to repay a loan – the facts, rather than what credit scoring systems and computers say. We’re a young business, but we’re a strong one. And we’re now in an even better position to achieve our plans today and over the coming years.”