FOR more than a century, Britain's railway hotels were the height of luxury, harking back to the times when first class passengers travelled in top hats and frock coats, their ladies in bonnets and bustles.

They gave us some of our most imposing buildings, like the Royal Station Hotel in York, which was indeed much used by royalty, and Skipton benefited from the Midland Hotel in Broughton Road, one of the finest Victorian buildings in Craven.

But times change and, as car ownership boomed from the 1950s, these great institutions began to fall into neglect. By 1989, the Midland, if not derelict, was dilapidated in the extreme.

The Midland seemed doomed to become flats, or perhaps even to be demolished entirely, until into the picture stepped a slip of an Embsay-born lass who was just 27 years old.

Michele Graham-Roe is pretty, funny and good company but it would be unwise to underestimate her inner steel when in comes to matters of business. She was on her way to building a multi-million-pound hotel and pub chain and the Midland Hotel was to be her first purchase. But she could not have chosen a worse time to embark an impressive business career.

It was April, 1989, and the Margaret Thatcher boom was stretched to bursting point. When, with the help of her husband Neil, she raised the cash to buy the hotel - and much, much more to refurbish it - nobody knew that in six months time that the bubble was about to burst.

"I was young and I wanted my own business in the catering industry," she says today, the 41-year-old mother of two young children. "I know now I was taking a huge risk then - but at that age, you are so blithely self-confident that you don't really understand that risks exist."

Her first move was to rename the hotel Herriots and begin what has been a non-stop spending campaign to bring it up to acceptable modern standards: "When I bought it, there was only one bathroom for 14 rooms. That was totally unacceptable so my first job was to make them all en-suite."

It has been spend, spend, spend ever since for in 15 years, Michele has extended her MGR Leisure group to 16 pubs and hotels stretching from Hull to North Wales - her second purchase was the Anchor Inn at Salterforth.

It is a remarkable record for a woman who is still a young mum - her baby daughter Anna is only eight months old and son George is five. But she frowned intently when I suggested that she was one of those very few women he really had "got it all."

"Oh no," she said firmly. "Neil and I put off having children until we had got our businesses going. You don't do this without making a lot of sacrifices."

Pubs, however, were in her blood although, she admits, she rarely visits them except for business reasons. She was born and raised in Embsay and her father, Harry, worked for Bass. He became managing director of Bass North West and the family moved to Cheshire when Michelle had had just one year at Skipton High School.

At catering college in Manchester she won a major industry award (another recipient that year was Gary Rhodes, the TV chef) and took her work experience at the famed Imperial Hotel in Blackpool, where they asked her to come back when she had finished her course.

By the time she was 26 she was in-house general manager of the Imperial, which meant she took tea with Margaret Thatcher and the then Labour leader Neil Kinnock when their party conferences were held in Blackpool.

"I liked them both," says Michele, "but it was obvious with Mrs Thatcher that, although she was always scrupulously polite and charming, she was always completely in charge of any room she entered."

This might have been success enough for some. But Michele knew she must run her own company. Then, one day, the phone rang and her father informed her that the Midland Hotel in Skipton was up for sale...

It has been 15 years of hard work for the couple, who met at the Manchester catering college, for Neil has also carved himself a big but separate career in the industry: he is managing director of a chain of 450 pubs!

"I couldn't have done it without a brilliant team of people," she says, and is full of praise for the new managers of Herriots, David and Vivienne Oliver, who have actually increased business through the last few months when workmen have been building a massive new wing onto the hotel alongside the canal.

For, like Topsy, Herriots is still growing. Towards the end of July, it will have ten new bedrooms, conference facilities for 100, a function suite for 120 and a new bar in a state-of-the-art conservatory.

What the ghosts of those Victorian travellers in their frock coats would think I have no idea. But for Michele Graham-Roe it is a concrete demonstration of faith in the future of Skipton has a meeting place for businessman as well as the tourist trade.

"It was supposed to cost £750,000 although the final bill will be more than that," she laughed. "But it will be worth it. Herriots will always be the jewel in my business crown. You never forget your first acquisition."