News / Joint venture could see new hotel built
A NEW BUSINESS partnership has announced its intention to build a new hotel in or around Lerwick as part of a wider agreement to provide and operate different types of accommodation to address the unprecedented demand in the isles.
The Norwegian owner of the accommodation sites at Sella Ness, Malthus, has signed a partnership agreement with SaxaVord Resort aimed at tackling the shortage.
Hotel beds have become increasingly hard to come by in Shetland lately, with over 2,000 workers now in the isles helping to build Total’s £1bn gas plant.
Demand is likely to remain high even once that project, which is far behind schedule, is complete – construction of Sullom Voe’s new £500 million gas sweetening plant is expected to commence in the coming months. Other big new projects in the offing include a new power station in Lerwick and the new Anderson High School.
The new joint venture is in talks on increasing accommodation capacity at Sella Ness, currently at its limit of 848 people, by building new wings to house the work forces employed on various projects at Sella Ness itself and Sullom Voe.
In addition, the Malthus-SaxaVord partnership intends to build a new hotel in or around Lerwick as soon as an appropriate site can be found and planning permission secured.
SaxaVord owner Frank Strang said he envisaged the hotel could have “somewhere between 80 and 120 beds” and would be “not just to cater for the short term demand from the oil industry, but for future projects in Shetland as well as the tourism business”.
Shetland Islands Council development committee chairman Alastair Cooper said he was “delighted” the accommodation village was being retained. He believes there is “at least another five years and possibly longer” of work in the area.
“In the short term we are needing more accommodation,” he told BBC Radio Shetland, “but with more hotel space in Lerwick, in time we’ll have to grow the economy so that they can all survive.
“That’s probably the challenge for us – while the economy is buoyant, we need to look to the longer term and how we’re going to keep folk coming to Shetland and keep the hotel bed spaces being used.”
Speaking about the joint venture more generally, Strang said: “We have been in discussions with Malthus for several months about working together and I am delighted that we have now formalised the relationship.
“We really enjoy working with our new Norwegian partners and believe the mix of Shetland-based local knowledge and Norwegian business acumen will be pivotal to the success of the venture.
“We want to grow the SaxaVord core business of accommodation provision to the business and tourist sectors on Shetland and this relationship will allow us to expedite the process.
“SaxaVord will be the public face of the new enterprise with Malthus providing the design, procurement, build and project management skills.”
Malthus Group CEO Espen Ingebretsen said: “Malthus has maintained a vital presence on Shetland for several years and we are very excited to join forces with SaxaVord and realise a mutual vision to develop the island’s capacity for accommodation, offices and recreational facilities.
“We are proud to take part in supporting Shetland’s industrial and economic growth, and look forward to a positive long term partnership with SaxaVord, local authorities and the industrial communities on Shetland.”
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