Folio Hotels, the operator of 36 three and four-star hotels across Britain, has become the latest casualty of the current economic downturn and has been forced into administration.

MCR was appointed on 2 December to review the financial position of the Swindon-based company, which has a turnover of £70m. It is hoped that Folio, which was founded in 2005, can now be sold as a going concern. Paul Clark, partner at MCR, said: "We are being repeatedly told that consumers discretionary spending is being reduced and that inevitably, the leisure sector will be impacted.

"The Folio Hotels Group has been in the middle of an expensive and comprehensive refurbishment project and has also suffered from rentals that were fixed at the height of the market. Together with the current economic climate, this has exacerbated cashflow demands. "However, all the hotels in the group will continue to trade while a buyer is sought as a going concern. We are confident that there will be a significant amount of interest."

Legacy Hotels and Resorts, the operator of 10 fully managed properties across the UK, as well as seven associate marketing sites, has already expressed its interest in acquiring some of Folio's hotels. Andy Townsend, chief executive of Legacy Hotels and Resorts, said: “We are in contact with the owners of several Folio hotels and are keen to explore further the possibility of taking on some of the properties.

"We feel that several of the hotels have great potential – potential which Legacy could realise to the advantage of the owners.”