Virgin Hotels Glasgow closes suddenly with all staff fired
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Virgin Hotels Glasgow has closed with immediate effect.
Staff were reportedly told of the closure in a meeting on Tuesday morning.
The hotel is no longer bookable online.
Virgin Hotels issued the following statement:
“Lloyds Developments Limited – the owner of Virgin Hotels Glasgow, which Virgin Hotels has a management contract with – has financial problems and on 1 December its lenders put it into administration. As a result, the directors of V Hotel Glasgow Ltd, the employer and operating company in respect of the hotel, are being advised by FRP Advisory LLP as they place that company into liquidation. 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 in order 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. Virgin Group and the owners are committed to ensuring employees are paid for every day they have worked this month.
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.”
Virgin Hotels Glasgow
The hotel opened in August after substantial pandemic-related delays.
Set on Clyde Street it had 242 rooms, a ‘Commons Club’ restaurant and a cafe. Many rooms had panoramic views of the river – see above.
Pricing was always punchy, with rooms being priced around the £300 mark at opening.
Virgin tells us the hotel was performing as expected, and that the closure was “caused by the financial problems of the owner …. not underperformance by Virgin Hotels as the manager or brand.”
I would expect, given the excellent condition of the hotel, that it will be swiftly bought out of administration by a new owner. That said, nothing seems to be in hand.
Geoff Jacobs, managing director at Interpath Advisory said:
“We will focus our efforts on working with stakeholders to facilitate a sale of this significant and attractive property for the benefit of the creditors of Lloyds Developments Ltd.
“Although the property is not actively on the market as yet, those with an interest should get in touch with the Joint Interim managers to register their early interest.”
Whether it retains the Virgin Hotels branding under new ownership is a different question. Even if it does reopen soon, it is likely that anyone who has prepaid a stay will lose their money. With no sale process in hand, a reopening would seem some months away.
In an email to staff, Virgin Hotels CEO James Bermingham said:
“We plan to re-open the hotel once a new owner is in place and we hope we can work together to give you priority on jobs as before.”
All of Virgin’s hotels are owned and managed separately, and this closure doesn’t affect any other Virgin Hotels site. Our review of Virgin Hotels Edinburgh is here and our review of Virgin Hotels New York City is here.
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