British banks failing hotel industry, says new Good Hotel Guide

British banks are failing the hospitality industry by withdrawing their support from well-run, profitable hotels, according to the Good Hotel Guide 2012: Great Britain and Ireland (GHG), published today.

The editors of the GHG, Adam Raphael and Desmond Balmer, said several rated hotels, whose property is worth more than £5m each, have had their overdraft facilities withdrawn without warning.

In particular, they highlight one hotel, owned by the same family for 30 years, which was told that before the facility could be reinstated, it would have to call in consultants. When the hotel did so at a cost of thousands of pounds, the local bank manager said he ‘never bothered to read such stuff'.

Another profitable hotel was told by its bank that it had withdrawn its overdraft facility because it had not been used for two years, and insisted that it could only be reinstated at 6% over base rate, because ‘hotels were a very risky business'.

Raphael and Balmer said the banks are penalising successful hotels as a consequence of their lamentable record in lending to unstable businesses.

"If either Lloyds or Barclays, the two principal creditors of the failed Von Essen Group, had made even the minimum of inquiries, they would have found out that the group was not rated highly by the hotel industry," they said. "Its owner, Andrew Davis, was described memorably by one prominent GHG hotelier as ‘Uriah Heep in a helicopter'."

The editors are surprised that Mark Stokes of the Lloyds Banking Group took a different view regarding the viability of Von Essen. "In an article 18 months ago headed: ‘Helping our rising stars to sparkle', he wrote: ‘Von Essen is defying the downturn with ambitious plans for expansion. [the company] is creating wealth and employment in Britain with the support of Lloyds'," they added.

Now on sale for £20, the GHG 2012 includes this year's winners of the guide's annual César awards:

The Zetter Townhouse - London hotel of the year
Burgh Island, Bigbury-on-Sea, Devon - romantic hotel of the yearThe Horse and Groom, Bourton-on-the-Hill, Gloucestershire - pub-with-rooms of the year
Beech House and Olive Branch, Clipsham, Rutland
Lavenham Priory, Lavenham, Suffolk - historic house of the year
Bedruthan Steps, Mawgan Porth, Cornwall - family hotel of the year
Romney Bay House, New Romney, Kent - Art Nouveau hotel of the year
Scarista House, Scarista, Isle of Harris - Scottish guest house of the year
Penbontbren, Glynarthen, Ceredigion - newcomer of the year
Ballinkeele House, Enniscorthy, County Wexford - Irish country house of the year

Good Hotel Guide 2011 slams TripAdvisor for malicious reviews >>

Good Hotel Guide 2010 says small hotels benefit from staycations and Euro visitors >>

How have independents around the UK responded to the recession >>

By Janet Harmer

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