A RECEIVER has been appointed to two properties run by the Lynch Hotel Group – Breaffy House Resort in Castlebar, Co Mayo and the Clare Inn Hotel Suites.
Michael McAteer of Grant Thornton was appointed yesterday by Bank of Scotland (Ireland) following a request by Michael Lynch, founder of the Clare-based hotel chain.
Mr McAteer has appointed Pat McCann of Maldron Hotels to operate the two properties.
The hotels would continue to trade and the all customer bookings would be honoured, the various parties said yesterday.
The 150 staff at the hotels are being retained. Breaffy has about 200 rooms and a sports and events arena while the Clare Inn has about 180 rooms and self-catering lodges.
It is understood that the loans owed to Bank of Scotland total more than €20 million. The two hotels are owned by a group of investors in receipt of tax breaks.
In a statement yesterday, Mr Lynch said the decision of Bank of Scotland (Ireland) to withdraw from this market “had a serious impact” on its “ability to source working capital over the winter months”.
“It is with great regret that we have had to make this decision but I am happy that in our discussions with the bank and receiver we have secured a position where the properties will remain open and continue to trade,” Mr Lynch added.
He said the poor weather leading up to Christmas led to a “large numbers of cancellations” which was a “significant blow” for the hotel chain. The chain has seven properties with 900 bedrooms in three counties in the west.
“With average room rates down 15 per cent this year, it has made it much harder to trade in the family and corporate markets and to command any sort of rate to cover costs and meet our expenses,” Mr Lynch added.
The Lynch Hotel Group has had a troubled few years. It emerged from examinership in 2009 having secured a severe haircut with creditors and renegotiated its rents.
Accounts to the end of December 2009, show that West County Hotel (Ennis) Ltd, the parent entity for the Lynch hotels, had accumulated losses of €21.2 million.
Late last year, global internet travel service TripAdvisor gave a “red badge” warning to the Clare Inn for posting fake reviews to boost its ratings.