The company operating one of the island’s most iconic hotels has gone into receivership amid claims that it is massively in debt.

The Elbow Beach Hotel now faces fresh uncertainty about its future, more than three years after it closed temporarily during the Covid-19 pandemic.

A notice found at the property confirmed that three representatives from Ernst & Young had been appointed as joint receivers “pursuant to mortgages entered into by Elbow Beach Hotel and Development Company Limited”.

The management company took over the running of the hotel in 2014, claiming it was confident that the resort “will remain well positioned for success”.

But the owner — Saudi Prince Khaled bin Sultan bin Abdulaziz al-Saud — reportedly put the property up for sale in 2019.

The resort was forced to close temporarily in early 2020 when the island’s tourism industry shut down because of the coronavirus pandemic. All staff at the Paget facility were made redundant, even though it was expected to reopen at the beginning of 2021.

Although many island hotels did reopen that year, Elbow Beach remained shuttered “due to the pandemic”.

In October 2021, a representative of Prince Khaled told The Royal Gazette that he was “evaluating various options”.

In March 2022, the company held a public sale of many of the furnishings in the 120-year-old hotel, but insisted that this was not a sign that it was shutting down permanently.

Last year, a hotel spokesman revealed that there had been renewed interest in the property and that discussions were being held with a potential buyer.

Earlier this year, there were reports that two entities were vying to take over the resort.

The Royal Gazette understands that Elbow Beach Hotel and Development Company took out loans to upgrade the property after it assumed management of the resort.

It is also understood that much of the main structure is now in a state of disrepair after being left empty for almost four years.

However, beachside eateries on the property — Café Lido and Sea Breeze Lounge and Terrace, which are run by the MEF Group — as well as Elbow Cycle are still open to the public.

Confirming that both restaurants will remain open for the foreseeable future, an MEF Group spokeswoman said: “Lido Complex welcomes the news that joint receivers have been appointed for The Elbow Beach Hotel and Development Company Limited.

“The popular Café Lido restaurant, Sea Breeze Terrace and Deep nightclub will continue to be open six days a week, Tuesday to Sunday, as well as for private events and bookings.”

Last night, a spokeswoman for Ernst & Young declined to comment on the development.

The Gazette also sought reaction from the Bermuda Tourism Authority, the Bermuda Hotel Association, the tourism minister and the opposition One Bermuda Alliance. No responses were received by press time.

• UPDATE: this article has been amended to confirm that Elbow Cycles remains open for business