A loss-making Fife hotel has permanently closed and its owner has started a liquidation procedure.
Newly filed documents at Companies House show loss-making King Malcolm Hotel in Dunfermline closed earlier this month.
The subsidiary of Peel Hotels which operated the 48-bedroom property has been put into voluntary liquidation.
The hotel has struggled financially for several years, with its value completely written off in Peel Hotel’s company accounts in 2018. The number of job losses is unknown.
The group has started a similar process with its 68-bedroom Strathdon Hotel in Nottingham.
Sadly no alternative
A notice to investors written by Peel Hotels chairman Robert Peel confirmed the start of the liquidation process.
He stated: “As shareholders will be aware, the performance of two of the company’s subsidiaries, operating hotels in Nottingham and Dunfermline, has been problematic for some years, resulting in the value of those investments having been recently written down to zero.
“Those subsidiaries have continued to trade at a loss despite the best efforts of management and staff, and when combined with the impact of Covid-19, has led the board of directors of those two subsidiaries to sadly decide that there is no alternative but to now put those subsidiaries into liquidation.”
Loss making
Two years ago Mr Peel said the Fife hotel’s profitability had been impacted by a recent rent rise and the end of construction of the Queensferry Crossing.
He had previously attempted to renegotiate the lease agreement with the landlord, a London-based investment company.
The accounts of King Malcolm (Dunfermline) Ltd, the subsidiary of Peel Hotels which operated the hotel, showed pre-tax losses of £1.2m in 2018 and £154,000 in 2019.
London-based Peel Hotels, which has six other hotels, was asked to comment on the closure.
