Coronavirus: Jobs lost as hotel and tour firm collapses

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image copyrightRichard Dorrell
image captionMackay's Hotel in the Highlands is one of three hotels being put up for sale

A Scottish hotel and tour operator is shedding 110 jobs after collapsing amid the coronavirus crisis.

David Urquhart Group is making 54 staff redundant at its coach tour business David Urquhart (Travel) Ltd.

A further 56 jobs will be lost at the group's Hart Hotels chain on Friday.

The group has put its three hotels up for sale in order to pay off its creditors - the Glenmorag in Dunoon, and the Highlands-based Garve Hotel in Garve and Mackay's Hotel, Strathpeffer.

All three hotels closed in March due to the coronavirus pandemic.

A small number of staff are being retained at the hotels for maintenance and security purposes. They will also facilitate any viewings of the property during the sales process.

David Urquhart Group is currently seeking a company voluntary arrangement (CVA), an insolvency procedure that allows a company with debt problems to reach agreement with creditors regarding repayment of all, or part of its debts.

The CVA proposal, which is being handled by business advisers Johnston Carmichael, is aimed at "allowing the orderly wind down of the business".

image copyrightIan S
image captionDavid Urquhart Group ran its coach tour business for 37 years

David Urquhart Sky Travel Ltd, which sells package beach holidays, cruises and European city breaks, is unaffected by the collapse of the group as it is a separate legal entity.

Johnston Carmichael said the sale of the Hart Hotels was expected to generate sufficient funds to repay creditors in full.

Customers of Hart Hotels who have made advance payments for hotel bookings will be added to the creditors' list.

'Full refunds'

The group said customers of its coach tours business David Urquhart (Travel) Ltd will receive full refunds for deposits or balance payments made, as all funds were being held in a "secure independent trustee account" managed by a third party.

In a statement, it said: "All customer funds are entirely safe, and it is our intention to begin the process of returning all customer monies as soon as possible."

'Dramatic impact'

A spokesman for David Urquhart Group's directors said: "The ongoing coronavirus crisis has had a dramatic impact on all business sectors, but especially on those within the travel and tourism industry where it is impossible to establish when operations will return to normal.

"The directors have made the decision, in the absence of interested parties, to wind up the coach tour business in an orderly manner over the next few months.

"This is not a decision which has been taken lightly.

"The coach tour company has served loyal customers for more than 37 years, throughout the length and breadth of the United Kingdom and Ireland, and has been a prominent figure within the leisure and hospitality industry."

A meeting with creditors over the CVA proposals is due to be held on 21 May.

image copyrightBlack Sheep Hotels
image captionThe Whispering Pine Lodge was one of two hotels affected when its owners went into administration

The collapse of the business comes just weeks after Johnston Carmichael were appointed administrators of Mars Black Sheep Hotels, which operated the Whispering Pine Lodge in Spean Bridge, Lochaber, and the Cluanie Inn in Glenmoriston, Inverness-shire.

In a separate development, an economist has warned that hospitality and tourism in Scotland is facing a "second winter" due to lockdown measures.

Mairi Spowage, from the Fraser of Allander Institute, also said the sectors would be particularly vulnerable if there were a second lockdown.

She told Holyrood's Finance Committee that operators were describing "that they have had a winter, they will have another one over the summer and then they will be into the next winter".

She added: "How many of these businesses can survive until next spring?".