The chief executive of GuestInvest, the buy-to-let hotel operator, is trying to put together the funding to buy back the company following its collapse into administration, Times Online has learnt.

Johnny Sandelson, who founded the company in 2004, is understood to be in advanced talks with an equity investor with a view to making a formal offer to the administrators at Deloitte, who were appointed on Thursday evening.

GuestInvest has five hotels in London that are either trading or under development, including part of The Brewery in Chiswell Street, due to be relaunched in June next year as the 218-room Chiswell Street Hotel.

It also owns Blakes, the celebrity hangout in Kensington, in partnership with Sir Mark and Lady Weinberg, although the luxury hotel is unaffected by the insolvency and continues to trade as normal. Guesthouse West, in Notting Hill, the company's first property, is also unaffected.

Analysts have long questioned the viability of the GuestInvest model, which involves buying and developing hotels and selling the rooms individually to investors who are guaranteed a minimum return and can stay in their rooms free for up to 52 nights. The company's advertising catchline is "earn money while others sleep".

As recently as August, Mr Sandelson had denied rumours of financial problems, insisting the business model was robust. However, the recent woes of HBOS, its joint venture partner, may have played a factor in the bank's decision to call in administrators.

It is understood that HBOS owned 50 per cent of the development company and almost 20 per cent of the management company, while also supplying most of the estimated £210 million of debt.

Observers said that GuestInvest had bought most of its properties at the height of the market, while investing heavily in their redevelopment. The investment in The Brewery is put at £75 million, while The Jones, due to open shortly in Bayswater with 174 rooms, represents a similar investment.

The 157-room Nest in Bayswater has undergone a £45 million investment, while Blakes was due to be the subject of a £7 million restoration, reducing it from 52 rooms to 40.

In recent months, GuestInvest had also been in discussions about turning part of Somerset House on the Strand into its sixth property, although no deal had been signed.

Other buy-to-let hotel companies today sought to distance themselves from GuestInvest's woes. Skelwith Group, which is developing the Flaxby Country Club in North Yorkshire at a cost of £100 million, said its model, which guarantees a return of up to 14 per cent, was very different.

Paul Ellis, managing director of the Skelwith Group, said that over half the 303 rooms had already been sold, even though the project is not due for completion until early 2011.

“Our model of a guaranteed yield is a lot more sustainable than the GuestInvest model of offering personal use for 52 days a year," he said.

"Our business model survives not only from room income, in fact this is a mere 40 per cent of income. The other 60 per cent of our income comes from our ancillary uses, which we will own outright with zero funding, such as the spa and gym, bars and restaurants, golf course, conference centre and shops.

“Virtually all our investors are from overseas and have purchased for the return on their money, rather than usage of rooms. The GuestInvest model of selling the rooms and staying there yourself on a regular basis was just not sustainable.”

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