# Spa Conversion — Stress Test Conversation
*Ellen MacAllister with Thinking Buddy — February 2026*

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**Ellen:** I've done my research and put together a working proposal. I want you to stress test it — don't be kind. Here it is:

# Spa Conversion — Working Proposal
*Ellen MacAllister, Lochside Lodge — January 2026*

## What I'm proposing

Convert the stone croft building in the grounds into a small spa facility for hotel guests and local bookings. The building is approximately 35 x 18 feet, stone construction, structurally sound.

**The facility:**
- Two treatment rooms (massage, facials — no specialist wet equipment needed in these)
- A sauna (Finnish-style, 4-person)
- An indoor hot tub in its own room — separate from the existing outdoor one at the main building, so guests coming out of the sauna don't have to cross the grounds
- A small changing area and shower

Not proposing a plunge pool at this stage — adds significant cost and complexity, can be added later if the facility performs.

## What the research turned up

**Planning**
Change of use from storage to commercial wellness requires a planning application to Highland Council. Not permitted development at this scale. Pre-application advice service available (£85 fee). Checked the portal — two similar conversions approved in the Fort William area in the last five years, both with conditions around parking, signage, and operating hours. No conservation area or listed building issues on this property.

**Building warrant**
Required. Covers structural alterations, drainage, ventilation (critical for sauna and wet areas), fire safety, and insulation. Highland Council building standards team handles this — can run in parallel with planning application.

**Services**
- *Water:* Scottish Water new connection enquiry submitted. Indicative cost £8,000–14,000 depending on distance to the main. Waiting for a site visit to confirm.
- *Power:* Craig (Paterson Electrical) walked the building — bringing a three-phase supply capable of running sauna, hot tub, and lighting estimated at £6,000–9,000.
- *Drainage:* Existing septic system may be adequate with an upgrade — Stuart (Connelly Plumbing) to assess. If a new soakaway is needed, add £3,000–6,000.

**Build and fit-out**
No firm quotes yet — need a specialist contractor. Based on comparable projects found online and HIE case studies, conversion of this type in the Highlands is typically running at £1,200–1,800 per square metre for a full wet facility. At 630 sq ft (roughly 58 sq m), that's a build cost range of **£70,000–105,000** before services and equipment.

Equipment on top:
- Sauna (commercial, 4-person): £8,000–12,000 installed
- Hot tub (commercial grade): £10,000–18,000 installed
- Treatment room fit-out (two rooms): £6,000–10,000

**Total capital estimate: £94,000–145,000**

I'm working to a planning figure of £120,000 for now — midpoint, with contingency.

## Revenue model

**Hotel guests**
- Upgrade room rate by £30–50/night for guests with spa access included (or sell as add-on)
- Treatment bookings: target 3–4 sessions per day at £55–70 per session during peak season

**Local bookings (off-season focus)**
- Sauna + hot tub session (90 mins): £35–45 per person
- Couples packages: £80–100 for a 2-hour slot
- Monthly membership (locals): £60–80/month for 4 sessions

**Rough annual revenue target**
- Peak season (May–Sep, 5 months): primarily hotel guests — £18,000–25,000
- Shoulder (Mar/Apr, Oct): mixed — £4,000–6,000
- Off-season (Nov–Feb): local bookings — £6,000–10,000
- **Total: £28,000–41,000/year**

At £120,000 borrowed over 10 years at ~7%, annual repayment is roughly £17,000. Running costs (utilities, insurance, laundry, consumables) estimated at £8,000–12,000/year.

The numbers are tight at the low end. They work if local bookings perform and the facility holds up through winter. They work better if I can push room rates up — which is the bigger prize.

## Next steps before committing

1. Scottish Water site visit — confirm connection cost
2. Pre-application meeting with Highland Council
3. Specialist contractor quote
4. Stuart to assess drainage
5. Janet (accountant) to model loan repayment vs. realistic revenue scenarios

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**Thinking Buddy:** Three problems. I'll take them in order of severity.

**First, the treatment room revenue is a fiction until you answer one question: who delivers the treatments?**

You've got 3–4 sessions per day at £55–70 built into your peak season numbers — a significant chunk of that £18,000–25,000. But the proposal doesn't mention a single therapist. If you employ someone, you're looking at £25,000–30,000 or more per year in salary before you've repaid a penny of the loan — that alone blows the financial model entirely. If you use freelance therapists, you're splitting the fee — typically 40–60% to them — and you have no guarantee of availability when a guest tries to book. The model prices treatment sessions as if you keep the full £55–70. Do you?

**Second, you already have an outdoor hot tub.** It's at the main building. Why are you spending £10,000–18,000 on a second one? Your proposal argues guests shouldn't have to cross the grounds after a sauna — that's a guest-experience argument, not a commercial one, and it's doing a lot of work to justify a £15,000 line item. If the indoor hot tub is a nice-to-have rather than a revenue driver, it needs a much clearer case than that.

**Third, the off-season local booking numbers.** £6,000–10,000 from locals through November to February. Fort William has a population of around 10,000. The surrounding area thins out fast. Have you spoken to anyone locally, looked at comparable facilities, or is this an assumption? Because at £80 a couples slot, the midpoint of £8,000 requires roughly 100 bookings across four months — about six per week, every week, through the darkest part of the Highland winter.

The second and third are manageable. The first could be fatal. Talk me through the staffing question.

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**Ellen:** Fair. On the therapist — I hadn't fully worked it through. My assumption was freelance, like some of the bigger Highland hotels use. You take a booking, they turn up, you split the fee. I thought it kept costs flexible and off the fixed base.

But you're right that I was pricing it as if I kept the whole fee. If it's a 50/50 split, that halves the treatment revenue — I'm netting £27–35 per session, not £55–70. And if availability isn't guaranteed, I can't sell it as a reliable offering. It becomes an occasional add-on at best.

On the hot tub — you're right. I wanted guests to have the full experience in one place without traipsing back to the main building, but that's a comfort argument, not a business case. I haven't worked out whether it actually drives any spend I couldn't get from the sauna alone. I was treating it as a given and I shouldn't have been.

On locals — I haven't validated it. I've had one conversation at the tourism network where someone mentioned their spa gets walk-ins from town, but that's one data point from a different property. You're right to flag it. "No competition nearby" doesn't automatically mean there are enough customers.

So: treatment revenue model is broken as written, hot tub cost is probably unjustified, off-season revenue is an assumption. Where does that leave the numbers?

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**Thinking Buddy:** Let me be direct about what it does to the model.

Strip treatment sessions out entirely as a financial foundation — not because treatments are impossible, but because they can't be the base case if staffing isn't solved. What's left in peak season? Room rate uplifts and sauna sessions from guests. Realistically — say 30–40% of guests paying a £30–40 add-on — you're looking at perhaps £8,000–12,000 from hotel guests in peak, not £18,000–25,000.

Off-season: take local bookings down to something defensible. Until you've tested it, use £2,000–3,000 as your planning number, not £6,000–10,000.

Revised total: somewhere in the range of £16,000–22,000 per year. Your annual loan repayment alone is £17,000, and running costs are £8,000–12,000 on top. At revised revenue you're cash-negative from day one.

That's the honest position. The project as scoped doesn't pay for itself at realistic revenue.

Now here's the structural question: is that because the idea is wrong, or because the scope is too expensive?

Because if you strip it back — drop the indoor hot tub entirely, since you have an outdoor one at the main building already, and replace the two treatment rooms with a single multipurpose room that can flex for treatments when you have a therapist confirmed but doesn't depend on that income — you bring the build cost down meaningfully and you stop the model relying on revenue streams you can't guarantee.

What does a phase one of sauna, one flexible room, no indoor hot tub look like?

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**Ellen:** That makes sense, actually. I was overbuilding to justify the spend, which is backwards.

If it's sauna, one multipurpose room, changing area and shower, no hot tub — the equipment saving alone is £10,000–18,000 gone. One room fit-out instead of two saves another £3,000–5,000. So maybe £75,000–125,000 instead of £94,000–145,000. Still significant, but lower — and more importantly, a loan around £100,000 rather than £120,000 brings the repayment down from £17,000/year to closer to £14,000.

The revenue model becomes honest too. Sauna sessions and room rate uplift as the base. Treatments as bonus income when I have someone confirmed — not counted in the plan. If local bookings turn out to be real, that's upside.

But I'm still worried the numbers are tight. The room rate uplift is probably where this has to work. If the spa means I can charge £40 more per night and that converts even a portion of bookings — across 12 rooms over peak season — that could be the number that makes it viable. Have I been underweighting that?

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**Thinking Buddy:** You haven't underweighted it — you've just not separated it from the noise. Let's look at it properly.

Your guest mix matters here. The contractors and walking group bookings go through Lochaber Corporate Travel and Ridgeline at negotiated rates — you can't add a spa uplift to those. Realistically the uplift applies to leisure couples and wedding parties: call it 40% of your peak season bookings. Twelve rooms, 40% with spa uplift, £40/night, 140 nights across peak and shoulder season — that's roughly £27,000. Even at a conservative 30% uptake over 120 nights, you're at £17,000. That number can carry the project.

And it's the most defensible assumption in the model. It doesn't depend on freelance therapists showing up, or locals driving out in January. It just requires that the spa makes the Lodge more attractive to a certain kind of guest — which is consistent with what you've already observed: people asking for this, people choosing other properties partly because of it.

So the revised model: room rate uplift as the anchor, conservatively modelled at £17,000–22,000. Sauna sessions from guests add £4,000–7,000. Off-season and treatments both treated as upside, zero in the base case.

Total base: £21,000–29,000 against annual costs of roughly £22,000–26,000 on a £100,000 build. Still tight, but workable — and you're building an asset.

Before you take this to Janet: the build timeline. If you move now — pre-app with planning, contractor quotes, final sign-off — work could realistically start in May or June this year, with an 18-week programme putting you open in autumn 2026. That still means carrying the loan through one quiet winter before the facility earns anything meaningful. Can the Lodge's own trading service that?

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**Ellen:** That's something I hadn't fully faced. An autumn 2026 opening still means carrying the loan through a quiet winter with very little coming in from the new facility. I need to know the Lodge's own trading can service the debt in the meantime. That's a question for Janet — but it's a real constraint.

Putting all of this together — the steer is getting clear. Phase one: sauna, single multipurpose room, proper changing area. No indoor hot tub. No staffed treatment programme; just a room that can flex when I have someone confirmed. Target capital £90,000–110,000. Revenue anchored on room rate uplift and guest sessions, everything else is upside.

Before I go to Janet I need the Scottish Water site visit, a pre-app meeting with planning, and at least one contractor conversation to reality-check the leaner scope. If those come back within range, the numbers can work. If the water connection comes in at £14,000 and the contractor says the stone walls need more work than expected, the margin disappears.

So: proceed, but with the leaner scope, and only after the three cost unknowns are resolved. Not a full commitment yet. If the numbers come back unfavourable, I stop. Does that feel like the right decision gate?

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**Thinking Buddy:** Yes. That's the right gate.

To be precise: the next steps — Scottish Water site visit, pre-app meeting, one contractor conversation — cost you time and a small amount of money, not £120,000. You're buying information before you buy a building project.

Three specific outcomes to proceed on:

1. Water connection confirmed below £12,000 — above that and the total drifts into territory where the model doesn't hold
2. Planning pre-app gives no indication of material obstacles — if they flag anything unusual about change of use or access, resolve it before proceeding
3. Contractor quote for the leaner scope comes in at or below £110,000 all-in including services

If all three are in range, take it to Janet with the revised model — room rate uplift as the anchor, sessions secondary, treatments and local bookings as upside only. If any one is materially out of range, stop and reassess rather than adjusting the model to fit.

One practical note before you go: when you speak to the contractor, ask what it costs to rough in a hot tub connection at the croft — pipe run and power circuit — without installing the tub itself. If that's a few thousand now, it keeps phase two open without committing £15,000 for equipment you don't yet need. Cheap to do early; expensive to retrofit later.

You've got a workable project. It's smaller than you drew it, but it's honest. Go get the numbers.

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**Ellen:** That's exactly what I needed. I was close to committing to something I couldn't afford to get wrong.

The leaner scope, the honest revenue model, the three decision gates before I sign anything — that's the plan. I'll get the Scottish Water visit booked this week. Pre-app with Highland Council as soon as they can fit me in. And I'll ask Craig and Stuart for a recommendation on a contractor who's actually done wet facility conversions before — no point going to someone who's guessing at the spec.

The hot tub prep-run idea is good insurance too. Cheap now, keeps the option open.

Thanks for not being kind about it.

