The famous Fairmont Hotel, located in the heart of San Jose’s cultural and entertainment district, is temporarily closing, it was announced Friday.
FMT SJ LLC, the operator of the iconic hotel, on Friday unveiled the reorganization of Chapter 11, temporarily closing the hotel for up to three months while finding a management partner and expanding existing mortgage debt.
The hotel abruptly ceased operations on Friday and moved its few remaining guests to nearby hotel rooms at the expense of the property.
“We know that by taking this difficult step, we will return to a more vibrant hotel for the benefit of everyone in San Jose, including the vitality of downtown, nearby businesses and Silicon Valley conventions in a post-COVID-19 world. said Sam Singer, the hotel representative.
Singer said the hotel is expected to prepare again to operate in about 60 to 90 days.
In addition, Singer said the hotel has suffered the impacts of COVID-19. As a result of the pandemic, all agreements for 2020 and 2021 have been canceled and employment throughout the pandemic has been less than 7%. The hotel lost at least $ 18 million in 2020 and is expected to lose at least $ 20 million by 2021, according to the hotel owner.
Singer said he is optimistic that the hotel’s guaranteed lender will work cooperatively to ensure the hotel returns stronger after its reorganization and as the region and nation emerge from the pandemic.
When the hotel reopens in mid-2021, the property expects to have a new manager and a new brand; one with the capacity and willingness to infuse tens of millions of dollars of capital into the hotel and its operations, and a solid business channel of future conventions for the hotel.
Singer said the impacts of the pandemic have been significant.
“The owner is committed to a process that will ensure the long-term viability of the hotel and boost business both at the hotel and at the major convention and convention center in San Jose,” he added.
The hotel is an iconic 805-room property at 170 South Market St. The 20-story 20-story hotel has 65,000 square feet of state-of-the-art meeting and event space, three restaurants with bars, a coffee shop Bread oven, a gym and a rooftop pool and a gazebo. The hotel has large ballrooms for large conferences and conventions, as well as intimate spaces for smaller meetings.