THE prestigious Hotel on the Park has gone into administration.
The Pittville hotel, which offers stays from £185 a night, has called in joint administrators Duff & Phelps.
The hotel had been up for sale for £2.6 million since November.
The hotel will remain open for the foreseeable future, securing the nine employees' jobs in the short term.
A manager at the hotel, who would not give his name, said: "All staff have been told and we are carrying on business as usual.
"We are still taking bookings and are thought to be carrying on indefinitely at the moment."
The 12-room Evesham Road hotel was put on the market via Colliers International.
Peter Brunt, from the estate agents, confirmed the high-end boutique hotel had been struggling during the recession.
He said: "The joint administrators were appointed as the company has experienced a downturn in trading performance due to the current economic climate.
"This, in turn, impacted on the business' cash flow."
In a statement, Matt Bond of Duff & Phelps said: "We, the joint administrators, will continue to trade the hotel on a business as usual basis while seeking a buyer for the hotel which remains open and looking forward to a busy Festival week."
Mr Brunt said the Grade II-listed town house, which dates back to the 1830s, had stunning bedrooms and had undergone a top-quality refurbishment.
He said: "It retains many original features, but has also undergone a complete refurbishment bringing all the facilities very much up to date.
"It's a luxurious oasis of calm right in the centre of Cheltenham with numerous opportunities for exploring the legendary shops or further afield in the Cotswolds."
The hotel also includes a bar and 42-cover restaurant The Parkers Brasserie.
The business was trading under the name HTLP Limited after it was taken over in 2008 by Benjamin Bowen.
The Echo was unable to contact Mr Bowen for a comment.