Strathmore Hotels in Administration: What It Means

What Has Happened

Strathmore Hotels Limited, a family owned group with its head office in East Kilbride, entered administration on 11 August 2026. James Alexander Dewar and Alistair McAlinden of Interpath Limited were appointed as joint administrators and are managing the affairs, business and property of the company as agents of the company and without personal liability. Both are licensed to act as insolvency practitioners by the Institute of Chartered Accountants of Scotland. The administrators confirmed that all eight hotels in the group would continue to trade and that approximately 410 employees would be retained while options for the business are reviewed. The company had been under sustained creditor pressure for a number of months, and a winding up petition was presented against it in July 2026, which is the legal step a creditor takes to force a company into compulsory liquidation when it cannot pay its debts.

The portfolio spans the Highlands, the west coast of Scotland, Perth and the north of England. The Salutation Hotel in Perth, a former seventeenth century coaching inn described by the company as Scotland's oldest established hotel, sits alongside the Alexandra Hotel and the Ben Nevis Hotel and Country Club in Fort William, the Ben Wyvis Hotel in Strathpeffer, the Nethybridge Hotel near Aviemore and the Royal Hotel in Oban. In England the group owns the Cairn Hotel in Harrogate and the Cumbria Grand Hotel. The geographic spread matters commercially because several of these properties are the largest single employers and the largest conference and wedding venues in small towns, which makes the outcome of the administration a local economic question as well as a corporate one.

What Administration Means in Practice

Administration is a formal insolvency procedure governed by Schedule B1 to the Insolvency Act 1986. Its statutory purpose is hierarchical: the administrator must first try to rescue the company as a going concern, and only if that is not reasonably practicable may they aim for a better result for creditors as a whole than liquidation would achieve, and only if neither is possible may they realise property to pay secured or preferential creditors. That hierarchy explains why hotels continue to open, take bookings and pay wages during an administration. Trading preserves the value of the business, and a business that is trading and staffed is worth considerably more to a buyer than an empty building. It is not an indication either way about the eventual outcome.

The appointment triggers a statutory moratorium, which prevents creditors from starting or continuing legal action against the company without the permission of the court or the consent of the administrators. That freeze is what stops a winding up petition proceeding and gives the administrators room to market the business. Within eight weeks of appointment the administrators must send proposals to creditors setting out what they intend to do, and creditors are entitled to see those proposals and to vote on them. The most common outcome in hospitality is a sale of some or all of the sites as going concerns, sometimes to separate buyers, with the proceeds distributed according to the statutory order of priority rather than to the trade creditors first.

Guests With Bookings and Deposits

An administration does not automatically cancel bookings. Where the hotels are trading, reservations are generally honoured, and the administrators' statements at appointment indicated continued trading across all eight sites. The position changes if a site closes or is sold, at which point a booking becomes a claim against the company rather than a service that will be delivered. Guests holding reservations for weddings, conferences or block bookings carry more exposure than a guest with a one night stay, because the deposits are larger and the event cannot easily be replaced at short notice. The practical step is to confirm the booking directly with the hotel and to keep written confirmation, since a booking confirmed in writing during the administration period is easier to evidence than a verbal assurance.

Where money has been paid and the service is not delivered, the payment method determines the remedy. A deposit or balance paid by credit card for a purchase over 100 pounds and up to 30,000 pounds attracts protection under section 75 of the Consumer Credit Act 1974, which makes the card issuer jointly liable with the supplier for breach of contract. The claim is made to the card issuer directly. Debit card payments and credit card payments below the section 75 threshold fall instead under chargeback, which is a card scheme rule rather than a statutory right and is usually subject to a time limit of 120 days from the expected service date. Wedding insurance policies frequently include supplier failure cover, and travel insurance may respond where a stay forms part of a wider trip.

Suppliers and Other Creditors

Trade suppliers occupy the weakest position in an administration and the one least understood before it happens. Money owed for goods or services delivered before the appointment becomes an unsecured claim, ranking behind the administrators' fees and expenses, behind secured creditors holding fixed charges, behind preferential creditors including employees and certain HM Revenue and Customs debts, and behind the prescribed part set aside from floating charge realisations. Unsecured creditors in hospitality administrations frequently recover a small percentage of what they are owed, and sometimes nothing. Suppliers who continue to trade with the company after the appointment are in a different position, because those supplies are treated as an expense of the administration and are paid ahead of pre-appointment debt, which is why administrators generally pay suppliers promptly for post-appointment deliveries.

Suppliers with a retention of title clause in their terms of sale are better protected, since goods that remain identifiable, unused and unpaid for may be recoverable. The clause has to have been incorporated into the contract before delivery and the goods have to be traceable, which works for wine, linen and equipment but rarely for food used in a kitchen. Any supplier wishing to assert such a claim should notify the administrators in writing promptly rather than attempting to recover goods directly, since the statutory moratorium prevents self-help. Local authorities, utilities and landlords each have their own position, and for a hotel group operating from a mixture of freehold and leasehold sites the treatment of rent falling due during the administration is often the single largest determinant of whether a site is sold or closed.

Employees and Money Owed

The retention of 410 staff at appointment means the immediate position for employees is continuity of employment, and wages for work performed after the appointment are treated as an expense of the administration and rank ahead of most other claims. Where an employee is retained for more than 14 days after the appointment, their contract is generally adopted by the administrators, which strengthens the priority of their claims for wages and pension contributions accruing from that point. If sites are subsequently sold as going concerns, the Transfer of Undertakings regulations may transfer employment to the buyer with continuity of service preserved, which is one reason administrators favour going concern sales in hospitality.

If redundancies do follow, employees claim through the Insolvency Service's Redundancy Payments Service rather than from the company. That service covers statutory redundancy pay, statutory notice pay, arrears of pay for up to eight weeks and holiday pay for up to six weeks, each subject to a statutory cap on a week's pay that is reviewed every April. Amounts owed above those caps, and contractual entitlements more generous than the statutory minimum, become unsecured claims in the insolvency and are rarely paid in full. Employees are given a case reference number by the administrators, which is required to submit a claim. Unpaid pension contributions are handled separately, and the Pension Protection Fund may be relevant where a defined benefit scheme is involved.

Frequently asked questions

Are Strathmore Hotels still open?

The joint administrators confirmed at appointment on 11 August 2026 that all eight hotels would continue to trade while options for the business are reviewed, and that around 410 employees would be retained. Trading during an administration is normal and does not indicate the eventual outcome.

Is administration the same as going bust?

No. Administration is a rescue procedure under the Insolvency Act 1986 in which the administrator must first try to rescue the company as a going concern. Liquidation is a winding up procedure that ends with the company being dissolved. A company can leave administration through a sale, a restructuring or a move into liquidation.

What happens to a deposit paid for a wedding or event?

Where the hotel continues to trade the booking is generally honoured. If it is not, the deposit becomes a claim against the company. Payments made by credit card for amounts over 100 pounds may be recoverable from the card issuer under section 75 of the Consumer Credit Act 1974, and debit card payments may be recoverable through chargeback.

Do employees keep their jobs during an administration?

Employees retained by the administrators continue to be employed and are paid for work done after the appointment as an expense of the administration. If a site is sold as a going concern, employment may transfer to the buyer under the Transfer of Undertakings regulations with continuity of service preserved.

What can employees claim if they are made redundant?

Claims are made to the Insolvency Service's Redundancy Payments Service and cover statutory redundancy pay, statutory notice pay, up to eight weeks of arrears of pay and up to six weeks of holiday pay, each subject to a statutory cap on a week's pay. Amounts above those caps rank as unsecured claims.