Economy helps delayed Velvet Hotel to stay on budget

THE owner of a new boutique hotel in Manchester’s Canal Street says that while its opening has been delayed by four months, the weakening economy means it remains on budget at £3.5m.

Mark Cain, who owns long-established bar and restaurant Velvet, plans to open a 19-bed hotel above the premises.

He said reports that the refurbishment of the former office space will cost £5.5m are incorrect and added that the hotel will have a ‘soft trial’ next month, before opening to paying guests in April.

Velvet Hotel was originally to open at the end of November 2008, and while a planning dispute added six weeks to the schedule, costs have remained the same, according to Mr Cain.

He said: “We planned to start in July and finish at the end of November, but actually we started work at the end of September. We’ve delayed things further as we didn’t want a January opening – that’s a bad time to open a hotel. Spring is more buoyant.”

Mr Cain added that the weakening economy meant big savings had been made: “Everyone wanted to do a deal. Where we have saved on electrical contracts, for example, we’ve been able to buy a new till system.”

But the existing restaurant and bar doesn’t seem to have suffered in the downturn – Mr Cain says it had its “biggest ever” December and that sales in the first week in January were up 20% on last year. Turnover in 2008 was £1.8m, a £300,000 increase on the previous year.

Mr Cain expects Velvet Hotel, including the bar and restaurant, to have revenues of £3m in its first year. The bar and restaurant employ 30 and an extra 12 people will be taken on for the hotel.

The 19 rooms are spread over four floors, covering 8,000 sq ft. Each will have a different theme, including a Victorian room, a Marilyn Monroe room and a leather room. Rates will be between £100 and £200 a night, including breakfast.

“We don’t need people to eat and drink here and the room rate is not based on that. We aren’t using it to subsidise the bar and restaurant as other hotels do. Here it’s different – the food and drink already stand alone in their own right.”

Allied Irish Bank provided the £3.5m funding.