Iconic San Jose Fairmont Files For Bankruptcy, Closes Until Summer – NBC Bay Area
The Fairmont Hotel, located in the heart of downtown San Jose’s cultural and entertainment district, is temporarily closing, it was announced Friday.
FMT SJ LLC, operator of the iconic hotel, filed for a Chapter 11 reorganization on Friday, temporarily shutting down the hotel for three months while it finds a management partner and expands existing mortgage debt.
The hotel abruptly ceased operations on Friday, displacing its few remaining guests, including the Vegas Golden Knights hockey team just before their game against the San Jose Sharks. Most of the guests were moved to neighboring hotel rooms at Fairmont’s expense.
“We know that by taking this difficult step, we will return to a more vibrant hotel for the benefit of everyone in San José, including the vitality of the city’s downtown core, nearby businesses and Silicon conventions. Valley in a post-COVID-19 world, “said Sam Singer, the hotel representative.
Singer said the hotel is expected to re-prepare for operations in about 60 to 90 days.
Additionally, Singer said the hotel suffered from the impacts of COVID-19. Due to the pandemic, all conventions for 2020 and 2021 have been canceled and the occupancy rate throughout the pandemic has been below 7%. The hotel lost at least $ 18 million in 2020 and is expected to lose at least an additional $ 20 million in 2021, according to the hotel owner.
Singer said he was optimistic that the hotel’s secured lender would work cooperatively to ensure the hotel comes back stronger after its reorganization and as the region and country emerges from the pandemic.
When the hotel reopens in mid-2021, the property expects it to have a new manager and a new brand; one with the ability and willingness to inject tens of millions of dollars of capital into the hotel and its operations, and a strong pipeline of future convention activities for the hotel.
The impacts of the pandemic have been significant, Singer said.
“The owner is engaged in a process that will ensure the long term viability of the hotel and stimulate business both to the hotel and to the important downtown and convention center of San José,” said he added.
The hotel is an iconic 805-room property located at 170 South Market St. The 20-story, two-tower hotel features 65,000 square feet of state-of-the-art meeting and event space, three restaurants with bars, a cafe-bakery, a fitness center and a rooftop pool and gazebo. The hotel has large ballrooms for large conferences and conventions as well as intimate spaces for small gatherings.