Ston Easton Park hotel has fallen into administration and been forced to close its doors due to the impact of the Covid-19 lockdown, with all 18 staff made redundant.
The four-red-AA-star, 23-bedroom property in Somerset found its financial position and cashflow severely compromised following the outbreak of Covid-19 and the lockdown measures that were put in place.
With no income and the uncertainty of the future trading environment, it was subsequently concluded that it would no longer be viable for the business to continue. Director Andrew Davis therefore decided to place the company into administration, overseen by Portland Business Recovery.
Portland is assisting staff with their financial claims, while seeking to find a new operator.
Director of Portland, Mike Fortune, said: "We are seeing a sharp increase in business closures due to the knock-on effects of coronavirus. The hotel sector has been especially vulnerable to this pandemic, due to it being predicted to be one of the last sectors to have any restrictions eased, with no definitive date in sight. Even larger hotel companies such as Travelodge have been forced to enter into formal insolvency arrangements with their creditors.
"Sadly, many businesses are facing financial distress because of the lockdown and have had no choice but to take early measures to reduce financial loss. The furlough scheme, which has helped many businesses in the short-term, may not be enough respite for many, especially as the government's contribution to salaries is being reduced in the coming months.
"The prospect of some business capacity being reduced to 50% or less, due to social distancing, means that many businesses are adversely predicting their financial viability even as the lockdown is eased. These are unprecedented times and the stark reality is that many businesses, as well as consumers, will really feel the pinch in the coming months and into 2021."
Peter and Christine Smedley converted the 18th-century mansion, formerly the family home of William Rees-Mogg, into a 22-bedroom hotel in 1982, before selling it for £4m to Andrew Davis' Von Essen Hotels in 2000.
The hotel was sold to entrepreneur and former Dragon's Den presenter James Caan in 2012 following the collapse of Von Essen, along with Sharrow Bay in Cumbria, both of which were returned to Davis a year later.
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