Iconic Melbourne landmark Adelphi Hotel shuts doors amid ATO dispute

The iconic Melbourne Adelphi Hotel has shut its doors, another victim of the harsh hospitality environment throttled by a high Australian dollar, and consumers who are spending fewer dollars on hotels interstate.

The hotel has been closed by its parent company, Gabriel Hotels Group, following a winding-up order issued by the Australian Taxation Office. 

Liquidator Gary Fettes of Rodgers Reidy told SmartCompany the business itself has now been placed in liquidation. SmartCompany understands the company’s debt to be around $150,000. 

“They had an outstanding ATO taxation liability and the ATO wound them up,” he said. 

While Fettes said he could not disclose the size of Gabriel Hotels Group with regard to revenue, he did confirm he had not been contacted by the directors. “So I assume the winding up order is going ahead,” he said. 

Gabriel Hotels Group director Damien Hodgkinson was also contacted this morning, but was not available. Hodgkinson told The Australian the tourism industry had been hard on the hotel, also citing poor levels of domestic tourism.

“Business declined during the global financial crisis. We recovered and stabilised the business (but) we were carrying a lot of debt,” he said. “In its day it was a prime boutique hotel. . . (but) for hotels under 100 rooms it is a fairly difficult market.”

The hotel had been purchased for the group out of bankruptcy in 2006. The company’s website is still operational, although multiple calls were left unanswered.

The Adelphi has been noted around the world as a boutique hotel landmark, appearing in several best-of lists and collections.

Hotel broker Nick Tinning told SmartCompany this morning the hospitality industry has been struggling, although the regional market for hotels has been improving.

“Unfortunately the regional market has come to a change in price quicker than our city partners, and that’s what’s resulted in the marketplace moving forward out here,” he said.

“Vendors’ expectations aren’t as high as they might be in the city.”

The high Australian dollar and consumers spending less money on interstate travel have hurt the hospitality industry. A recent report from Access Economics found that while tourism is increasing, domestic operations are moving at a different pace.

The ATO was also contacted, but SmartCompany did not receive a reply prior to publication.