Hampshire-based insolvency practice Portland Business Recovery has been appointed administrators of Ston Easton Park Hotel, which was forced to close its doors due to the immediate effects of COVID-19 lockdown.
Established in 2012, the hotel found its financial position and cashflow severely compromised following the outbreak of COVID-19 and the lockdown measures that were put in place.
This led to an immediate temporary closure and subsequent cessation of trade. As the lockdown has continued, with no income and the uncertainty of the future trading environment, it was subsequently concluded that it would no longer viable for the current business to continue. The director therefore sought Portland’s advice and then made the decision to place the company into administration.
All staff have been made redundant and Portland’s experienced team are assisting the staff with their financial claims, whilst seeking to find a new operator of the hotel, with the support of the landlord, in order to maximise recoveries for creditors and if possible protect future customer bookings.
Director of Portland Mike Fortune commented: “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.”