The hotels under the Irish Hotel Federation are likely to face cash flow problems, says Irish Hotel Federation President, Paul Gallagher. He has demanded for a `guarantee' scheme for the sector from the Irish government.
Following the declaration about the shutting down of the Bank of Scotland Ireland, there have been rising apprehensions that this would lead to an undue threat to almost 150 hotels as the bank provides 20% of all loans to the sector.
The catastrophe is likely to come somewhere near December, which has frightened the sector even the more as during this time of the year the banks are most unlikely to entertain new customers. The banks will hence be unable to find credit and would face severe cash-related attrocities.
He added, ''In addition to long-term loans, the existing package of facilities provided by Bank of Scotland Ireland to our members includes vital seasonal funding to carry them through the quieter winter period".
The Bank of Scotland, which is a Lloyd's subsidiary, will soon transfer its business to its parent Company and will also stop all its operations.
The financial crisis is said to have hit the Irish banking market real hard and its closure is likely to leave 150,000 individual account holders looking for a new bank.