The old Clarion Hotel will remain open beyond March, but it remains unclear whether current staff will be retained or if the hotel will continue trading under the City Park Grand Hotel name.
Vision Hotels will take on the lease from March 23, adding the hotel to its growing Tasmanian management portfolio which includes the Coach House, Cornwall Historic Hotel and their recent outright purchase of the Scamander Beach Resort.
The company will soon "relaunch" the hotel and begin taking bookings again. All forward bookings had previously been cancelled, which the current operator said was at the request of GP Hotels.
A letter from the hotel's manager last month stated all staff positions would be terminated. The retention of staff was still subject to discussions between Vision Hotels and the current operator.
Vision Hotels director Brendon Deeley said the company could not, at this stage, confirm if current staff could be retained, but he could guarantee there would be "no net job losses".
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"Without us knowing all of the information about the arrangements between staff and the current operator, it's difficult to discuss anything regarding staffing," he said.
"But whether we employ all or some or none of the staff, we still need a team to operate the hotel. We have teams at our two Launceston hotels, we have potential managers that we can bring over, and we have managers in training who can take a step up."
The lease agreement is for a minimum of 12 months, meaning works within the old Clarion as part of GP Hotels' $80 million five-star plans for the site cannot begin in that time. Singaporean-owned GP Hotels bought the hotel for $7.2 million in 2016.
The agreement with Vision Hotels can continue until the time when GP Hotels has final planning approval and can begin work, Mr Deeley said.
The current owner of City Park Grand Hotel, Ian Hall, bought the Clarion in 2005 when it was called The Prince Albert Inn. It underwent a significant internal revamp before its sale to GP Hotels in 2016.
Mr Hall said they were asked by GP Hotels to continue operating in March last year, but in December they received a notice to terminate trading by March 2020.
He met with staff this week to discuss the changes.
"They were very open and honest discussions," Mr Hall said.
"Many of the staff have already made arrangements to leave the business and others are applying for jobs in the industry. We will do everything we can to make sure they're looked after.
"Just to keep it running and to keep paying staff over the 12 months, I've had to pay $300,000 of my own money to keep it afloat. We broke even for the first time in November after starting from zero bookings."
Staff have been offered the opportunity to take part in the Rapid Response Skills Initiative run through the Department of State Growth.
Vision Hotels took over the operation of the Coach House on York Street two years ago, and the Batman Fawkner Inn on Cameron Street which it converted into the Cornwall Historic Hotel, changing it from a backpackers to a boutique hotel.
Mr Deeley said the strength of Launceston's tourism market had put the two hotels among their most successful acquisitions.
"Apart from the current glitch with the coronavirus, we've had a lot of success in Tassie," he said.