The famed Fairmont Hotel, located in the heart of downtown San Jose’s cultural and entertainment district, is closing temporarily, was announced Friday.
FMT SJ LLC, the operator of the iconic hotel, filed for the reorganization of Chapter 11 on Friday, temporarily closing the hotel for up to three months while finding a management partner and extending the existing mortgage debt.
The hotel stopped abruptly on Friday, relocating its few remaining guests at the expense of ownership to rooms in nearby hotels.
‘We know that by taking this difficult step, we will find a more vibrant hotel for the benefit of everyone in San Jose, including the vibrancy of the city center, businesses in the area and Silicon Valley events in a world to COVID-19, ”said Sam Singer, the hotel’s representative.
According to Singer, the hotel is expected to be ready for operations again in about 60 to 90 days.
Singer further said that the hotel suffered from the effects of COVID-19. As a result of the pandemic, all conventions for 2020 and 2021 were canceled and the occupancy rate in the whole pandemic was less than 7%. The hotel lost at least $ 18 million in 2020, according to the hotel owner, and is expected to lose at least another $ 20 million in 2021.
Singer said he is optimistic that the hotel’s secured credit provider will work together to ensure the hotel returns stronger after the reorganization and if the region and the country emerge from the pandemic.
When the hotel reopens in mid – 2021, the ownership expects it to have a new manager and brand; one with the ability and willingness to invest tens of millions of dollars in capital in the hotel and its operations, and a robust pipeline for future conference businesses for the hotel.
The effects of the pandemic were significant, Singer said.
“The owner is committed to a process that will ensure the long – term viability of the hotel and drive business to the hotel and San Jose’s important downtown and conference center,” he added.
The hotel is a distinctive 805-room property in South Market St. 170. The 20-storey two-storey hotel has 65,000 square meters of modern meeting and event space, three restaurants with bars, a café-bakery, a fitness center, a rooftop pool and a gazebo. The hotel has large ballrooms for large conferences and events, as well as intimate spaces for smaller events.