Hunstrete House has gone into creditors voluntary liquidation after von Essen administrators pulled the plug on the failing business.
The Georgian country house near Bath, owned by von Essen director Andrew Davis, had been operating as a separate company from von Essen hotels, though having operated at a loss for some time it had only been able to continue trading with von Essen's support.
Von Essen administrators Ernst and Young decided they could not justify its continued funding.
The 12 members of staff were informed this afternoon (Tuesday) of the hotel's immediate closure and the group will attempt to find them employment at nearby hotels.
Guests at Hunstrete House have been moved to nearby von Essen hotels. Future customers will be offered the same terms in other von Essen properties.
Von Essen chief executive Charles Prew said the hotel was a unique case and its demise had no implication for the continued operation of the other 26 von Essen hotels in administration, which continue to operate normally.
He added: "The building was owned by Andrew Davis and there was an operating licence agreement for von Essen to run it on his behalf. It has been a loss-making hotel in recent years. This is not something that's going to happen to the other hotels.
"The combination of notice being served by von Essen Investments and the continuing losses of the hotel mean that the administrators could no longer continue to support the business. As a result, regrettably there has been no option but for the company to go into liquidation."
Suppliers owed money will be notified by the liquidator of arrangements for an initial meeting of creditors.
By James Stagg
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Published by: The Caterer