THE owner of the King Malcolm Hotel has said they are “considering its options” after writing it off as worthless.

Peel Hotels, which operates a portfolio of nine properties across the UK, said that they had experienced “persistent problems in regard to the cost base” of both the King Malcolm and the Strathdon Hotel in Nottingham.

In recently-filed accounts for the year ending January 28, the London-based firm said that its board had “reviewed the carrying values of the two hotels” and “determined it appropriate to write them down to zero”.

It meant they took a hit of £1.16 million in its accounts, which suggested an alternative use for the property may need to be investigated if it did not return to profit.

In what the company described as a “very challenging year”, Peel Hotels stated that hotel revenues had decreased by 4.1 per cent – from £16.79 million to £16.08 million – while a pre-tax loss of £734,986 was recorded, compared to a profit of £575,387 which was posted in the previous year.

The accounts said that occupancy was also down 4.5 per cent and noted that “demand has slowed in many of the provincial areas of the United Kingdom”.

In its business review within their accounts, the group said: “Shareholders are aware that there have been persistent problems in regard to the cost base of two of the group’s subsidiary companies, the Strathdon Hotel (Nottingham) Limited, and the King Malcolm Hotel (Dunfermline) Limited.

“The board have reviewed the carrying values of the two hotels within those subsidiaries and determined that it is appropriate to write them down to zero.

“The impairment value of the two hotels is provided for an an exceptional item of £1,161,241 in this year’s accounts.

“The board is considering its options in regard to the properties within the two subsidiaries, including change of use, it is therefore possible that the impairment could be reserved if a more profitable future for the properties could be found.”

They added: “Demand has slowed in many of the provincial areas of the United Kingdom and, together with upwards pressure from increases in the living wage, business rates and energy costs, this has created challenges to the profitability of the company.

“However, it is not unreasonable to suppose that once the terms and conditions of Brexit are clear, that stability and growth will return.

“In the meantime, we remain focused on reducing debt and our overall cost base.”

The King Malcolm has 48 bedrooms and has facilities for conferences, business seminars and function rooms for weddings and other celebrations.

The Press contacted Peel Hotels for further comment but they did not respond.