Hospitality industry - Arcona hotel group ends insolvency: creditors agree
Seven months after filing for insolvency, the Arcona hotel group, which operates in several German states, can breathe a sigh of relief. Creditors approved the insolvency plans of the affected hotel operating companies without opposition, as the company announced in Rostock on Thursday. "We are glad that our partners have remained loyal to us in this challenging phase and have allowed us to pursue the path of self-administration," said Alexander Winter, managing director of Arcona Hotels & Resorts. The Rostock District Court had invited creditors to a creditors' meeting on Wednesday.
Arcona operates four- and five-star hotels in Weimar (Thuringia), on Sylt (Schleswig-Holstein), and several hotels on Rügen and Usedom. Locations also include Austria (Kitzbühel) and Mallorca. The company filed for insolvency for all German businesses. In this insolvency procedure, management retains control.
Reduced Portfolio
During the restructuring phase, Arcona separated from a total of three businesses on Rügen (arcona Living First Sellin), in Thuringia (Romantik Hotel Auf der Wartburg), and Austria (Triforêt). This significant contribution has been made to secure the economic performance of the company again, according to Winter. The now accepted plans provide for payments to creditors, which also include shares in future profits. This would bring creditors a much clearer satisfaction than the liquidation of the company.
The hotel group, which operates the Barefoot Hotel (Till Schweiger's brand) on Mallorca, reduced its portfolio to eight businesses according to its own statements. There are still over 300 employees working for the company.
The company, founded in 2008, filed for insolvency in November of the previous year, among other reasons, due to investment decisions made during the ongoing pandemic and the rapid expansion of the company on unforeseeable external factors. This included, for example, the war in Ukraine, energy supply bottlenecks, and high inflation. The resulting general purchasing reluctance of guests led to significant sales losses, especially in the hotels' catering services.
- Despite the insolvency filings, Arcona Hotels & Resorts, known for its operations in the hospitality industry, has managed to keep control of its German businesses, as announced in Rostock.
- The district court in Rostock organized a meeting of creditors to discuss the insolvency plans, which were approved without opposition.
- Arcona's portfolio includes luxury hotels in Weimar (Meklenburg-Western Pomerania), Sylt (Schleswig-Holstein), and various locations on Rügen and Usedom.
- The company has also expanded to Austria (Kitzbühel) and Mallorca, with plans to operate the Barefoot Hotel, a brand by Till Schweiger.
- In the insolvency process, Arcona has separated from three businesses located on Rügen, Thuringia, and Austria to secure the company's economic performance.
- The insolvency plans include payments to creditors and shares in future profits, offering creditors a much clearer satisfaction compared to the liquidation of the company.
- The restructuring effort has reduced Arcona's portfolio to eight businesses, with over 300 employees still on the payroll.
- The company, founded in 2008, filed for insolvency in November, citing investment decisions made during the pandemic, rapid business expansion, and external factors such as the war in Ukraine, energy supply bottlenecks, and high inflation as reasons for financial difficulties, leading to significant sales losses, especially in gastronomy services.
