Virgin Hotels property in Glasgow has shut and is not accepting further bookings after the firm that owns the building called in administrators.
About 130 jobs have been lost with the closure, just four months after the hotel opened in August on the banks of the River Clyde.
Lloyds Developments Ltd – the owner of Virgin Hotels Glasgow, which Virgin Hotels has a management contract with – was placed into administration on December 1 due to financial problems.
Virgin Hotels chief executive James Bermingham said: “These financial issues mean that the hotel cannot continue operating and now has to close.
“Virgin Group tried to find solutions, including offering to purchase the hotel, to keep the hotel open, keep the team in employment and ensure the completion of the development of the hotel, creating something the city of Glasgow could be proud of.
“Unfortunately, the lenders have not accepted Virgin’s offers and intend to pursue a sales process with the hotel closed.
“Virgin Hotels is very disappointed by this decision after the hard work everyone has put into the hotel and because of the impact it will have on the team that works there.
“Virgin Hotels’ heartfelt thanks and gratitude are to those employees, suppliers and guests who have been integral to the hotel’s launch in the city of Glasgow.”
He added: “The Virgin Hotels team continues to have great ambitions for managing the hotel in Glasgow and looks forward to re-opening once a new owner is in place.
“No other Virgin hotel is impacted – all other Virgin Hotels remain open and operating as normal as all Virgin Hotels are independently owned.”
Sarah Cook, of business advisory firm FRP, said: “We know that this will be a very difficult time for employees, particularly so close to Christmas. Every effort has been made by the directors and by Virgin Hotels to find a way forward for the hotel in recent weeks, but this has unfortunately not been possible.
“The immediate closure of the hotel has, of course, resulted in the business no longer being financially viable and will therefore enter a liquidation process in the coming weeks.
“We are grateful to Virgin Hotels for their support in making up the shortfall in the business finances to enable us to make payroll and ensure that all employees will receive full wages up to 31 December. We will also continue to support employees in making any further claims to the Redundancy Payments Service.”