The Scalloway Hotel has entered administration with the loss of 17 jobs.
The popular attraction run by Peter and Caroline McKenzie had closed its doors temporarily as a result of Covid-19 crisis.
But a drop in trade from the oil and gas sector together with the ongoing pandemic has resulted in its permanent closure.
Stuart Robb and Michelle Elliot – of Leonard Curtis Business Rescue and Recovery in Glasgow – were appointed joint administrators of The Sea Door Limited, operators of The Scalloway Hotel.
After reviewing the company’s options the directors made the decision to close the hotel and appoint administrators.
Joint Administrator Stuart Robb said: “Despite having strong bookings in the tourist season, in recent years the business had experienced a significant reduction in turnover during winter periods, mainly due to the downturn in the oil and gas sector and increasing overheads.
“As a result, the company experienced cashflow difficulties.
“Unfortunately, having assessed the company’s trading and financial performance – and in light of the current COVID-19 pandemic – it is not possible to re-open the hotel and, as such, all 17 employees have been made redundant with immediate effect.
“We appreciate that this is disappointing news for the staff at what is already an unsettling time.
“We are working with Partnership Action for Continuing Employment (PACE) to ensure that those employees impacted by redundancy receive the best possible support.
“There remains an opportunity to acquire the hotel, and we would encourage any interested parties to contact Emma Cameron by email at firstname.lastname@example.org with a note of interest.”
Located on Main Street, in Scalloway, the independent hotel has 23 rooms, a bar and 2AA rosette restaurant.