The 23-bedroom Scalloway hotel on Shetland has fallen into administration following "a difficult couple of years trading" and in light of the Covid-19 pandemic, with 17 jobs made redundant.
After reviewing the company's options, directors Peter and Caroline Mckenzie decided to close the hotel and appoint administrators.
Stuart Robb and Michelle Elliot of Leonard Curtis Business Rescue & Recovery were appointed joint administrators of the Sea Door, which operated the hotel, on 25 March. Administrators confirmed the opportunity to buy the hotel remains open.
Robb said: "Despite the hotel having a strong order book in tourist season, the business had experienced a significant reduction in turnover over the winter periods in recent years, principally due to the downturn in the oil and gas sector and increasing overheads, which led to the company experiencing cash flow difficulties.
"Unfortunately, having assessed the company's trading and financial performance and in light of the Covid-19 pandemic, it is not possible to reopen the hotel and, as such, 17 employees have been made redundant with immediate effect. We appreciate that this is disappointing news for the company's staff in what is already an unsettling time for them. We are working with PACE to ensure the employees impacted by redundancy are provided with the best support possible."