Jobs at risk as hotels group hit by recession

Hundreds of jobs across the Midlands were today at risk as that company that runs Quality Hotels in Walsall, Wolverhampton, Penkridge and Birmingham went into administration.

Around 150 jobs have already gone in Staffordshire as The Stop Inn in Newcastle-under-Lyme closed and a further 1,200 are at risk.

The Real Hotel Group suspended its shares last week amid uncertainty over its financial position after sales were down 34 per cent in the first seven days of this month.

Its 36 remaining UK hotels, which include the Purple Hotel at Star City, are continuing to trade while the group is in administration.

The company runs the Quality Hotels brand in the Midlands as part of a franchise deal.

Staff at the hotels in Wolverhampton Road in Walsall, Penn Road in Wolverhampton, Pinfold Lane in Penkridge and Hagley Road, Birmingham, today declined to comment.

Shay Bannon, of administrators BDO Stoy Hayward, said: "The Real Hotel Group has experienced deterioration in trading during the last quarter of 2008 with this trend accelerating into the first two weeks of January, which resulted in severe cash flow pressures.

"It is regrettable that we have had to close a small number of hotels.

"But we continue to trade a significant number of hotels with the support of stakeholders and will be actively marketing the group for sale. We have already received several expressions of interest."

The Penn Road hotel, a popular business venue that also hosts weddings and themed music nights, had been planning an expansion after being granted planning permission in 2004 to build a three-storey annexe on the car park, doubling its size.

It also wanted to remodel its 125-space parking area and reduce the number of rooms in the main building from 66 to 58 to build better family accommodation.

Today, a sign on the reception desk states that The Real Hotel Group had gone into administration and that the hotel would continue to trade until further notice.