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Business

Huge blow as hotel group goes into administration

By: KentOnline reporter multimediadesk@thekmgroup.co.uk

Published: 11:40, 21 September 2006

The Stone Court Hotel in Maidstone, one of eight hotels operated by Swallow Hotels in the county

HUNDREDS of hotel and bar staff across the county face an uncertain future after Kent-based Swallow Hotels plunged into administration.

The troubled group, run from offices in Medway Street, Maidstone, operated eight Kent hotels, including Stone Court, Maidstone, Larkfield Priory, Chaucer, Howfield Manor and Falstaff, all in Canterbury, The Shurland, Sheerness, Kent International, Ramsgate and Londsdale Court, Cliftonville.

The Swallow Hotels and London and Edinburgh Inns group also owned numerous bars, including Zebra and Ashes, Maidstone, and Stocketts, Coxheath.

Administrators Ernst & Young offered hope by revealing it had found a possible buyer. It said that, subject to contract, the business and asssets of 240 hotels and pubs would be sold to Flodrive Group, with its joint venture partners.

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Roy Bailey, one of the joint administrators, said: "We are delighted to have made early progress in salvaging a material part of the hotel and pub portfolio and importantly securing the jobs of almost 2,500 employees."

In a statement, Ernst & Young, said the companines in the London and Edinburgh Swallow Group or hotels and pubs, had "for some time struggled in the face of increasing heavy losses."

It added: "The directors of the group have considered various avenues and concluded that a restructuring through an insolvency process provided the best option for the business."

One of the joint administrators Angela Swarbrick said: "We are continuing to trade the various companies on a 'business as usual' basis while we explore the possibility of a sale of the businesses and their assets as going concerns."

No-one was available for comment at the group’s head office in Meadow House and local hotel staff were told not to speak to the press.

The Swallow group was the fastest growing hotel chain in the UK, expanding from 13 hotels to 180 in just three years.

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But insiders suggest the group expanded too rapidly by snapping up dozens of new hotels, including The Stone Court Hotel, which was sold by local entrepreneur Musa Kivrak.

The group was one of the UK’s biggest private hotel and pub businesses, employing more than 7,000 people and operating almost 700 hotels and bars.

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