Operator of Aberdeen hotel goes under with loss of 30-plus jobs

The company that operated the Hilton Garden Inn in the centre of Aberdeen has collapsed, with the loss of more than 30 jobs.

The firm operated the Hilton Garden Inn Aberdeen City Centre. Picture: Alan Donaldson.
The firm operated the Hilton Garden Inn Aberdeen City Centre. Picture: Alan Donaldson.

It follows no buyers coming forward for the 100-bed hotel at St Andrew Street in the Granite City.

Blair Nimmo and Geoff Jacobs of KPMG were appointed joint liquidators of The St Andrew Street Hotel Company yesterday. The company was incorporated in 2008, while the hotel had experienced challenging trading conditions for several years on the back of the downturn in the oil and gas industry.

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Consequently, the hotel company experienced funding shortfalls at various times and required additional support from its shareholders to keep trading. "Despite a restructuring involving several of its key stakeholders and taking steps to reduce trading and overhead costs, the company was still unviable,” KPMG said.

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The hotel closed in March when Covid-19 lockdown measures were introduced in the UK, which had a major impact on the company’s cash position.

The directors couldn’t secure new funding and, despite marketing the leasehold interest in the hotel, the lack of sale meant the directors decided to place the company into liquidation.

At the time of the appointment, the company had 34 people who had been on furlough, and they have now all been made redundant as the business will not be able to reopen and trade.

Nimmo, joint liquidator and KPMG’s UK head of restructuring, said: “Unfortunately, following a prolonged period of challenging trading, lockdown was too big a challenge for the hotel in a local market already adversely impacted by oversupply.

Inevitable

"The current difficulties within the hospitality sector are well-documented and we have been working with several businesses recently with similar challenges. Regrettably, some insolvencies in this sector are inevitable, and we are working with all affected employees and the relevant government agencies to ensure a full range of support is available for all impacted employees.”

The news comes after a report published by PwC earlier this week found that key Scottish cities including Aberdeen saw “precipitous” declines in key hotel market metrics on the back of the Covid-19 pandemic, and the broader industry could take four years to recover. However, there was optimism from a PwC partner in Aberdeen that the city’s hotel market would recover again.

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