The closure of the historic Lomond Hills Hotel in Fife following challenges related to the cost-of-living-crisis and Covid-19 has prompted a warning that more venues will follow without further government support.
The 24-bedroom hotel in Cupar had been trading for almost 300 years and was a popular venue for weddings and events, however a drop in occupancy, combined with cash flow issues caused by the Covid-19 lockdowns, made the business unviable.
Insolvency practitioner Begbies Traynor has been appointed as joint liquidator for the venue, which traded under the name of Highlander Hotel Ltd. The hotel, restaurant and bar has been closed and 17 members of staff have been made redundant.
Stephen Montgomery, spokesperson for the Scottish Hospitality Group, said: "This closure further demonstrates that without government intervention and support to help us through current issues like the energy crisis, this is what the sector is facing now.
"We do try and keep positive, but there are so many things that are being thrown down upon us and the hotel's closure is a sign of the times. Consumers are keeping an eye on every penny. It's as if money is in lockdown."
The hospitality sector has been severely impacted by the cost-of-living crisis, seeing a downturn in trade as people have cut their luxury spend. A survey from PWC Consumer Insights Survey published last month reported that the luxury travel and products are expected to be the hardest hit over the next six months as consumers are ‘holding back' on non-essential spending.
Thomas McKay, partner at Begbies Traynor in Scotland, said: "Like many boutique hotels in small villages, the Lomond Hills Hotel has experienced very difficult trading conditions during the challenging winter season.
"Facing a perfect storm of financial pressures, the directors, in consultation with the business' lenders, made the decision to enter liquidation as the hotel was no longer able to trade. We are currently working with local government bodies to support former employees by ensuring they receive appropriate redundancy advice.
"After almost 300 years as a coaching inn, we plan to appoint agents to present the hotel for sale in early spring and hope that it will again be able to operate in the hands of new owners."
The joint liquidators are assisting former staff to register any claims to the Redundancy Payments Office and access support services from PACE.