The development will allow the hotel to continue in its endeavour to become Shetlands only four-star hotel. Significant improvements will be made to the 18 en-suite bathrooms and its ecommerce website will be enhanced.

The project will enable 14 jobs to be retained, secure the hotel’s future through a winter of Covid restrictions and ensure it provides an even better service when it reopens for overnight stays and indoor dining.

Located in Busta Voe on Mainland, Shetland, the hotel was built in 1588. It serves predominantly local and tourism markets as well as being popular with international guests.

Pre-Covid, the hotel had 80% occupancy rate during the summer. The pandemic had a devastating effect and was forced to close its rooms and diversify by offering a takeaway service due to restrictions.

The business has taken every opportunity possible to survive and was rewarded with a Community Spirit Award from Voluntary Action Shetland for their “go-ahead spirit, amazing work and serving their community”.

Staff at the hotel also work with the local school and Developing Young Workforce programme to provide employment and training opportunities for young people.

The support from HIE includes £97,400 in working capital to support the company through the pandemic. A further £90,000 investment from HIE will support the company to upgrade the hotel and provide anti-Covid19 measures.

The business also received £6,375 through HIE’s Digital Enablement Grant to help redesign its website, introduce an integrated online booking system and provide a gift purchase service.

Grant O’Neil, co-owner of Busta House, said: “We truly appreciated the support from HIE. Without such help I feel that we would have been in an unavoidable position of having to close not only one of Shetland’s finest hotels, but also one of Shetland’s most historically important buildings. Thanks to HIE we have been able to continue to operate and offer our services to both the local community and to national and international travellers alike.”

Andrew Gear, head of business growth, added: “Tourism is hugely important to the economy of Shetland. High value visitor accommodation is a vital part of the industry. It supports other local businesses, creates employment and contributes to community resilience. The upgrade of the Busta House Hotel will enable it to target the growing market of higher visitor spend. We are really pleased to support the project and look forward to the upgraded hotel reopening.”