The striking Fairmont Hotel, located in the heart of downtown San Jose’s cultural and entertainment district, is closing temporarily, it was announced Friday.
FMT SJ LLC, the operator of the iconic hotel, filed for Chapter 11 reorganization on Friday, closing the hotel temporarily for as much as three months while finding a management partner and extending existing mortgage debt.
The hotel abruptly ceased operations on Friday, moving the few remaining guests to rooms at nearby hotels at the property’s expense.
“We know that by taking this difficult step, we will come back to a more vibrant hotel for the benefit of everyone in San Jose, including the vitality of the city center, nearby businesses and the Silicon Valley conventions in a post- COVID-19 world., ” Said Sam Singer, the hotel’s representative.
Singer said the hotel is expected to be ready for operations again in about 60 to 90 days.
In addition, Singer said the hotel has suffered from the effects of COVID-19. As a result of the pandemic, all conventions for 2020 and 2021 have been canceled and the occupancy rate during the pandemic is less than 7%. The hotel lost at least $ 18 million in 2020 and is expected to lose at least $ 20 million by 2021, the hotel owner said.
Singer said he is optimistic that the hotel’s secured lender will work together to ensure the hotel comes back stronger after the reorganization and as the region and country emerge from the pandemic.
When the hotel reopens in mid-2021, the owner expects it to have a new manager and a new brand; one with the ability and willingness to put tens of millions of dollars in capital into the hotel and its operations, and a robust pipeline of future conference business for the hotel.
The consequences 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 both to the hotel and to San Jose’s important downtown and convention center,” he added.
The hotel is a Grade I listed building with 805 rooms at 170 South Market St. The 20-story twin-tower hotel has 65,000 square feet of state-of-the-art meeting and event space, three restaurants with bars, a cafe bakery, fitness center and pool on the roof and gazebo. The hotel offers large ballrooms for large conferences and conventions, as well as intimate spaces for smaller gatherings.