The restored Lews Castle will not include a luxury hotel but will instead house self-catering apartments on the upper floors of the historic building.
Although widely reported that the plan was for a luxury hotel to be alongside the new Museum and Archive, the Comhairle say the opportunity for a private partner was advertised as ‘high quality accommodation’ and that the response from the market has been that there is demand for mixed use flexible accommodation.
The plan has raised some concerns from island based accommodation providers who say the self catering market in the islands is already ‘saturated’.
The Comhairle have confirmed that a preferred partner has been identified and that negotiations are continuing over amenities on site such as a bar, although it is understood there will not be a dedicated restaurant within the accommodation section of the Castle.
A formal announcement on the preferred bidder will be made in the near future.
Joe MacPhee, Head of Economic Development at the Comhairle, said: “The Comhairle went out to tender in September 2012 for a private sector partner to work collaboratively with the Comhairle to deliver the vision for the development of Lews Castle as a sustainable, high quality hospitality and heritage destination, working in synergy with the new Museum and Archive.”
He added that there was the possibility of functions, such as weddings being held in the Castle in the restored public rooms: “Through that public tender process the Comhairle has identified a preferred partner for the project.
“The accommodation offer proposed includes hotel bedroom suites and flexible guest apartments with self catering provision.
“The ground floor of the castle will feature a dedicated reception space for guest check in.
“The restored public rooms on the ground floor will be available for functions. The private partner will also operate the museum shop and cafe within the courtyard area of the Castle.”
He said the council was undertaking a due diligence process covering all commercial aspects and an economic impact assessment and that the detailed design of the upper floors was still ongoing.
The preferred bidder is understood to be a national self catering provider who offers accommodation right across the UK and Ireland and also abroad.
Mr MacPhee also pointed out that the Comhairle had previously tendered the hospitality opportunities at the Castle through a Competitive Dialogue process, but this had not identified a solution which would meet requirements at that time.
A local self catering accommodation provider has raised concerns that there are already more than 800 self catering bed spaces in Lewis, funded primarily through the private sector.
Graham McLellan, who owns several self catering premises in the islands said: “The market is saturated, I myself have withdrawn two properties from self catering within the past 18 months as they were becoming too difficult to fill.”
He said the issue is not with new additions to the market but to assistance being given to an off-island company to target the same guests as existing self catering providers.
He added that a presentation to the Outer Hebrides Tourism Industry Association (OHTIA) two years ago outlined the proposal being for a luxury 14 bedroom hotel aiming at top end guests.
“This would have added something massively different to the accommodation provision already available on the island,” he said.
He added this had now become 26 units and that the luxury hotel accommodation had now become self catering.
He said: “All island accommodation providers will experience varying degrees of displacement if the council push this proposal through. Now is not the time.
“There is already surplus capacity which cannot be filled until a major improvement in ferry capacity is achieved and a major increase in visitor numbers seen as sustainable.”