Hundreds lose jobs before Christmas as Virgin Hotels Glasgow closes after four months

More than 100 staff members at Virgin Hotels Glasgow lost their jobs on Tuesday just six days before Christmas after its operating company collapsed into administration.

Employees, whose rotas had been completed until the end of January, were told at a midday meeting on December 19 that the premises was to close its doors with immediate effect.

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.

Uncertainty had loomed for more than two weeks as on December 1, the property firm behind the hotel and which Virgin Hotels has a management contract with – Lloyds Developments Limited – fell into administration due to financial difficulties.

Interim managers were appointed at the time but staff had been assured it was “business as usual” and there was no threat to jobs.

It is understood the company which operated the hotel, V Hotel Glasgow Limited, had insufficient funds to continue.

However, on Tuesday lunchtime the hotel’s doors were locked, and guests arriving with their suitcases found themselves unable to check in.

Speaking to STV News Lorna Gascoigne, the former Common Club supervisor at Virgin Hotels Glasgow, said: “We turned up at 12pm to not only just find out that we’ve lost our jobs, but there’s a potential we might not get paid.

“There’s a lot of people who work for us who have children who are absolutely distraught. We’re furious, we’re absolutely livid.”

Kevin McMonagle, another former supervisor described the situation as “soul destroying”.

In a bid to rescue the troubled hotel, Richard Branson-owned Virgin Group had approached owners Lloyds Developments Limited to purchase Virgin Hotels Glasgow to keep it in operation, however, this was not accepted by the lenders who now intend to pursue a sales process with the hotel closed.

A spokesperson from Virgin Hotels, said: “Lloyds Developments Limited – the owner of Virgin Hotels Glasgow, which Virgin Hotels has a management contract with – has financial problems and on December 1 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, 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 said it was “disappointed” by the 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”.

The spokesperson added: “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.   

“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.”

In an email sent to employees, Virgin Hotels CEO James Bermingham explained that administrators from FRP Advisory were responsible for organising the payment to employees.

Mr Bermingham added: “We are grateful to all of you at Virgin Hotels Glasgow for all you have done to launch this hotel and make it a success. In the meantime, Virgin Group and the owners are committed to ensuring you are paid for every day you have worked this month.

“The team will work through the details with you. We are also happy to connect you with other Virgin companies if and when job opportunities arise in the future.

“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.”

Bryan Simpson, lead organiser for Unite Hospitality, described the treatment of the workers as “outrageous”.

“Our members were told today by the CEO that the hotel would be closing with immediate effect, without the required notice or consultation, all just six days before Christmas,” he said.

“Senior management couldn’t even confirm whether workers would be paid wages for hours worked.

“This isn’t just morally reprehensible, it may be unlawful and we will be doing everything in our power to ensure that these workers get the wages, severance packages and compensation that they deserve.”

As all Virgin Hotels are owned and managed independently, only Virgin Hotels Glasgow is impacted by the decision and no other Virgin hotel or company is impacted.