The company which operated the Sharrow Bay Hotel, which has traded since 1948 in the Lake District, has closed and will be placed in to voluntary liquidation after the sole director Andrew Davis instructed south-coast based Portland Business Recovery to manage its affairs.
Set in 12 acres of gardens and woodlands, the Hotel is reputedly the place where the Sticky Toffee Pudding was invented as well as birthplace of the phrase ‘Country House Hotel’.
Director Andrew Davis has attributed the failure of the company to a combination of several key factors which has led to him having to make the difficult decision to close its doors.
Poor trading in 2019 due to Brexit and major road repair work at nearby Pooley Bridge vastly reduced visitor numbers to the area. Deficiencies within the lease led to the inability to carry out vital renovations and improvements to the property. Even though Mr Davis introduced £1.2m to support the business through the holding company, which also holds the premises lease, the aforementioned and the impact of Covid-19 lockdown, created the perfect storm which made trading conditions unsustainable.
Mr Davis has indicated that the holding company is hoping to agree the rectification of the deficiencies within the lease so that funding may be obtained and the Hotel reopened in due course, with the intention of honouring customer deposits and vouchers that have been affected by the closure.
Customers who paid deposits to Sharrow Bay Hotel prior to it ceasing to trade for bookings the company was unable to fulfil due to lockdown and the subsequent closure can await the proposed re-opening or seek to recover funds via their credit card provider, where appropriate, under the Consumer Credit Act and support is being provided in this regard.
Director of Portland Business Recovery Mike Fortune commented: “The impact of Covid-19 lockdown caused the enforced closure of the business in March, and the subsequent social distancing restrictions effectively made reopening unviable for the company.
“Sadly, the tourism and hospitality sector has been hit the hardest and the harsh reality is that many businesses are now facing critical financial distress due to the loss in income during the temporary closure and due to the ongoing restrictions which has caused a reduction in footfall when they have reopened.
“Many hotels are realising that this pandemic could be here for the foreseeable and are therefore making the early decision to close all together. The bottom line is that, despite Government intervention such as the newly announced Job Support Scheme which is set to replace the current Furlough Scheme, businesses across the UK are predicting a bleak autumn and winter.
“Between April and June, gross domestic product (GDP), the broadest measure of economic prosperity, fell by 20.4% which is the biggest quarterly decline since comparable records began in 1955. These are truly unprecedented times where in some cases business closure may be the only viable option.”
The formal appointment of Mike Fortune & Carl Faulds from Portland as liquidators is anticipated to take place on 2nd October.