Gresham Hotel Group has told 100 staff at its Royal Marine Hotel in Dún Laoghaire that they will lose their jobs in October.

The job losses will coincide with the termination of the lease Gresham holds on the hotel, which it sold and leased back three years ago.

Gresham chief executive Mr Patrick Coyle stressed yesterday that the decision to exit the Royal Marine had been made independently of the firm's recent takeover by a consortium of three investors.

"Everybody knew this in advance," he said, adding that unions at the hotel had been receiving briefings on the matter from management for some time.

Mr Coyle said Gresham had been offered an extension of the Royal Marine lease that would last six months at the most.

He pointed out that such an arrangement would not make financial sense for the hotel group, particularly since it would cover the quieter winter months.

The hotel delivered just a marginal operating gain to Gresham last year after leasing costs.

The brevity of the new lease offered is linked to plans by the current owner, Mr Seamus Neville, to begin a major renovation of the hotel over the coming months. The hotel is expected to close for several months while the work is undertaken.

The workers were told yesterday that Gresham would be offering them options including redundancy and relocation to other hotels within the group.

Most of the staff are represented by SIPTU, which had been pushing Gresham for a decision on the Royal Marine over the past few months.

Mr Neville bought the Royal Marine from Gresham for €22 million in 2001.

Gresham said at that time that the operation was not generating an "appropriate return" and did not fit in with a strategy of basing hotels in city-centre locations.

About two years after the leasing deal was approved by shareholders, staff at the hotel were paid a "loyalty bonus" of €5,000 each. They had been aware for some time that Mr Neville had plans to redevelop the hotel and that this would affect their positions.

Mr Coyle said yesterday that it had been clear since then that Gresham's involvement with the hotel was contingent on the continuation of the lease.

He said that the Royal Marine has for some months now been operating on the basis that its circumstances would change in October. Bookings have not been taken for dates after that point and budgets have been drawn up with October as an end date.

Under Mr Neville's plan to refurbish the Royal Marine, the hotel will double its number of bedrooms to 237 and will rise to seven stories. It will have treatment rooms, a leisure centre, a new lounge, two restaurants, four function rooms and a swimming pool among other facilities.

Mr Neville is expected to take on the running of the hotel himself after that time.

Gresham said yesterday, meanwhile, that five non-executive directors - Mr Harvey Soning, Mr Amos Pickel, Mr Tom Byrne, Mr Jim O'Leary and Mr Donal Chambers - had resigned from their positions with the company.

The resignations follow Gresham's de-listing from the stock exchange earlier this month.