The project, part of a broader £3m refurbishment, will reposition the hotel from its previous offering to a four-star luxury hotel and spa.
It will increase the number of jobs at the hotel from 17.5 full time equivalent posts to 40.8 and is forecast to boost turnover by up to 28%.
There will be significant improvements made to the guest rooms, public areas and grounds.
The Isle of Mull Hotel is an important contributor to the local economy on the island and a valuable source of rural employment. Once re-opened as a four-star hotel and spa, it is expected it will make a valuable contribution to economic recovery in the area’s tourism sector.
Confirming the HIE investment, Morag Goodfellow HIE area manager for Argyll and the Islands, said:
“Tourism is hugely important to the economy of Argyll and the Islands, and indeed the wider Highlands and Islands region. High value visitor accommodation is a vital part of the industry. It supports other local businesses, creates rural employment, and contributes to community resilience.
“The upgrade of the Isle of Mull Hotel will bring the facility into line with other hotels in the group and enable it to target the growing market of higher spend visitors. It will also create new jobs on Mull, including opportunities for younger people. We are very pleased to be able to support the project and look forward to the upgraded hotel re-opening.”
Chris Wayne Wills, CEO of Crerar Hotels said:
“Crerar Hotels are injecting over £2.5m into this, and other improvements to the Isle of Mull Hotel, resulting in the development of more than 20 new jobs across the hotel. I’d like to thank the Muileachs for all of their support over the years and HIE who have provided us with this funding, allowing us to complete the work ahead of what we believe will be a busy and successful year for the hotel. All of this will help continue to push the hospitality offering on Mull.”
The upgraded Isle of Mull Hotel is due to re-open in the spring.