Axed hotel staff to receive full pay after shock Virgin Hotels Glasgow closure

More than 100 hotel staff members whose jobs were axed six days before Christmas are to receive full pay until the end of the year, administrators confirmed.

On Tuesday, Virgin Hotels Glasgow closed with immediate effect after its operating company, V Hotel Glasgow Ltd, ceased trading when the property owners Lloyds Developments Ltd collapsed into administration at the beginning of the month.

The plush hotel on Clyde Street, which finally opened to fanfare on August 18 after its opening date was pushed back multiple times, had been welcoming guests for just four months.

A total of 130 employees were made redundant immediately and the doors of the hotel were locked on Tuesday.

Sarah Cook and Simon Carvill-Biggs of FRP Advisory have been instructed by the directors of V Hotel Glasgow Ltd to support the entry of the company into liquidation.

The lenders are now looking to pursue a sale of the property.

FRP confirmed that following a call with all staff members on Wednesday, Virgin Hotels had made up the shortfall in business finances, meaning all employees affected will receive full wages up until December 31.

Sarah Cook of FRP said: “We know that this will be a very difficult time for employees, particularly so close to Christmas. Every effort has been made by the directors and by Virgin Hotels to find a way forward for the hotel in recent weeks, but this has unfortunately not been possible.

“The immediate closure of the hotel has, of course, resulted in the business no longer being financially viable and will therefore enter a liquidation process in the coming weeks.

“We are grateful to Virgin Hotels for their support in making up the shortfall in the business finances to enable us to make payroll and ensure that all employees will receive full wages up to December 31. We will also continue to support employees in making any further claims to the Redundancy Payments Service.”

The hospitality industry in Glasgow has rallied to support workers after news of the redundancies broke.

Oran Mor, in the city’s west end, said it was “saddened” by the news, and said its team was on hand to help find availability for any festive celebrations that may have been affected, as well offering support to members of staff who found themselves unemployed.

Dakota Hotels, which operates in both Glasgow and Motherwell, also said that affected employees could contact their recruitment teams, who would try to help.

Virgin Hotels and Unite the union have been contacted for comment.