Whitworth Hall Hotel will close indefinitely on 25 October, despite recently transitioning to new ownership.
The Spennymoor-based hotel and deer park was bought this summer by The Apartment Group, a regional leisure company.
Some 30 staff will be made redundant as a result of the pandemic, bringing the total redundancies at the firm’s sites to 350.
According to the Northern Echo, Debrah Duggah, chief operating officer at The Apartment Group, said: “Covid hit us, we thought by the end of August or September we would be coming out of it so we kept running the hotel.
“But it is just not viable to keep open. With the Covid restrictions and not knowing when it is going to end, we got to the stage where we had to close.”
She added: “We have had to make 350 people redundant in total, I’ve worked in hotels and hospitality for 30 years and known nothing like it.
“The hospitality industry is simply in a crisis.”