Comhairle nan Eilean Siar has announced its private sector partnership with Natural Retreats in the development of Lews Castle.
Natural Retreats, a part of American based company Natural Assets, are a travel accommodation company who specialise in coastal, countryside and wilderness locations.
A council spokesman said: “Following an open procurement tendering process the Comhairle identified a preferred private sector partner to invest in and operate the commercial aspects of the project.
“Natural Retreats are a specialist leisure and travel company renowned for offering customers high quality tourism experiences. They are also committed to working with the local supply chain through the use of local produce, engaging with existing tourism experience providers and the employment of local staff.
“Over the past 18 months the Comhairle has been engaged in a comprehensive due diligence process around the proposed partnership. This has now been concluded and Natural Retreats formally appointed in August 2014 as the operating partner.”
The Outer Hebrides Tourism Industry Association have been in talks with the council regarding the tendering process of the partnership.
Ian Fordham, Chairman of the Outer Hebrides Tourism Industry Association, said: “Our role in terms of input to the development is to make sure that the facts and figures the council use are correct.”
Mr Fordham explained that two reports used by the Comhairle reveled issues that OHTIA were not pleased with, and the issues have not been addressed.
One of the reports is the economic impact assessment which Mr Fordham believes has overstated the number of jobs that the hospitality development will actually provide, and has understated the impact on existing businesses.
The second report was by Tourism Resources Company, and is an assessment of the current ‘accommodation stock’ available to tourists on the Isle of Lewis. Mr Fordham suspects that this report has been inadequately researched and presents an unbalanced recommendation.
The concerns of the OHTIA were not addressed before the Comhairle announced its partnership.
Mr Fordham said: “We are very disappointed to learn that the council has awarded the contract to Natural Assets whilst our dialogue with them was still ongoing.
“We have major reservations over the accuracy and reliability of the two reports commissioned by the council, and we believe that the council should have taken our input on board.
“We were also promised a public meeting on displacement of trade from existing businesses before any decision was taken, and that has not happened.”
A website has been set up by existing business owners regarding the Comhairle’s partnership with Natural Retreats, including Kenneth Mackenzie of Cala Hotels and Graham Maclellan of Hebridean Luxury Holidays, who have raised concerns about what they perceive to be failures to comply with applicable EU funding, state aid and public procurement rules.
Kenneth Mackenzie, Chief Executive of Cala Hotels, said:“Most local authorities work very hard to generate a fair and open commercial environment that encourages the development of business. Sadly, in this instance, the Comhairle is working hard spending capital in its own self-interest, and in the process generating a highly subsidised operation with which no existing local business can compete.”
“In light of the Comhairle’s decision to ignore ongoing discussion with the industry and to secretly progress their plans for the Castle, Cala Hotels and Hebridean Luxury Holidays have both decided to bring the various failures of the Comhairle to comply with applicable EU funding, state aid and public procurement rules to the attention of the European Commission and Audit Scotland.”
A council spokesman said: “The new Outer Hebrides Tourism 2020 Strategy, developed in partnership with the Outer Hebrides Tourism Industry Association (OHTIA), identifies ‘Accommodation’ as a key component in growing the tourism sector and specifically, improving the customer journey – putting the customer at the heart.
“This includes meeting the expectations of customers, new investment and the range and capacity of accommodation.
“The Comhairle supports this key objective and will continue to play its part in supporting the delivery of the new strategy for the benefit of the whole tourism sector.”
Matthew Spence, founder and CEO of Natural Retreats, commented: “I am delighted to share our vision for Lews Castle.
“We hope to create a 5-star accommodation offering.”