GuestInvest, the company that pioneered the concept of buy-to-let investment to luxury hotel rooms, has gone into administration.
The company was set up by entrepreneur Johnny Sandelson in 2004, and had a number of hotels in the Notting Hill and Bayswater districts of London. Investors could buy a luxury hotel room, stay there free for 52 nights of the year, and receive a slice of the rental income for the rest of the time (see for more on how the concept worked - and its risks and limitations)
The company, whose adverts famously boasted "earn money while others sleep", claimed investment returns of more than 8 per cent were achievable.
Guestinvest is a privately run company. I 2006, Bank of Scotland Corporate's joint ventures team acquired a shareholding in GuestInvest in exchange for a debt and equity package worth £200m.
Administrators Deloitte & Touche are now "assessing the position of the group in order to determine the best outcome for its creditors".
GuestInvest's most famous hotel, celebrity haunt Blakes, is unaffected by the insolvency and will continue to trade as normal. GuestInvest bought the property last year, and was planning to sell rooms to private investors for £1m each. However, none were sold, so it continues to operate as a traditional hotel.
The company's first hotel, Guesthouse West, is no longer part of the GuestInvest group and continues to trade normally.
