One of Adelaide’s landmark hotels, The Stag on East Terrace, has closed its doors in the face of financial difficulties within the group running the hotel and a problematic sale attempt.
Up to 35 staff, including seven full-time positions, have lost their jobs.
The Stag had been in administration since 19 March this year but the administrators, Ferrier Hodgson, announced today that the hotel’s lessee, Complete Hospitality Pty Ltd “has ceased trading effective immediately”.
“Whilst the receivers and managers had entered into a sale contract with a purchaser, the sale of this iconic hotel unfortunately could not proceed as an extension of the lease was not forthcoming,” Ferrier Hodgson Partner David Kidman said.
“The control of the hotel will now revert back to the landlord.”
The landlord is Rundle East Company Pty Ltd, owned by the Maras Group.
Maras Group chairman Theo Maras told InDaily: “We never received an offer from Ferrier Hodgson. No offer was made by Ferrier Hodgson, none”.
“We will negotiate our own tenant on the basis of who will offer the best for the hotel and the area in order to maintain the ongoing East End ethos,” Maras said.
A sign on the door of the Stag today said Complete Hospitality Pty Ltd had failed to pay rent of $20,713.22 owing for April.
The Stag joins a number of other Adelaide hotels which are in financial strife with industry insiders suggesting that up to a dozen hotels in the CBD are in receivership or on the market.
Australian Hotels Association General Manager Ian Horne said the industry was reporting that there had been unusually quiet trading in February and March this year.
He questioned the role being played by “pop-up” bars and food outlets.
“The majority of the hospitality sector is saying that February and March were the slowest for years,” Horne said.
“If you are going to make money you will normally do it in February and March to carry you though the slower months of May, June, July and August – but it didn’t happen this year,” he said.
“The Adelaide City Council has this fascination with pop-ups that trade for 30 days but these are, in fact, multi-million businesses.
“In February and March we reached a tipping point and now the bricks and mortar businesses are saying: ‘What went wrong?’
“There is no one thing that is the same for all venues but we would be pleading with the Adelaide City Council to show the same support for the bricks and mortar outlets as they do the public space outlets.”
Adelaide City Council Program Manager, Vibrant City, Penny McAuley responded saying “Adelaide City Council values the contribution to City life that venues such as the Stag Hotel bring”.
“It is always disappointing when an iconic business such as the Stag closes,” she said.
Horne said the hotel industry “has been seeing an accumulation of costs of doing business over the years while revenue has been stagnant.”
“If revenue is not making CPI and costs are going up, it just puts the squeeze on businesses,” he said.
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