RBS takes on 21 hotels as debts drive Jarvis under

Royal Bank of Scotland is taking over two dozen regional UK hotels owned by Jarvis Hotels, which has entered administration after falling victim to the economic downturn.

RBS has teamed up with private equity group Patron Capital Advisors to buy the business and assets of 21 freehold and three leasehold hotels from Jarvis, which yesterday called in administrators from Grant Thornton.

The bank’s distressed property asset division West Register and Patron have set up Jupiter Hotels to buy the hotels, which trade under the Ramada brand.

Jarvis racked up £15 million of losses in 2009-10 because of the economic downturn and tough lease terms on some of its hotels.

RBS is understood to have considered injecting cash into Jarvis, which owes about £130m to RBS and other lenders including HSBC and Bank of Ireland. But it decided taking over the hotels was its only choice after reviewing restructuring options.