The landmark of the Fairmont Hotel in the heart of the cultural and entertainment district of downtown San Jose is temporarily closed, it was announced on Friday.
FMT SJ LLC, the operator of the legendary hotel, filed for Chapter 11 restructuring on Friday and temporarily closed the hotel for up to three months while finding a management partner and extending the existing mortgage debt.
The hotel abruptly shut down on Friday and moved its few remaining guests to rooms in nearby hotels at the owner’s expense.
“We know that taking this difficult step will return us to a more vibrant hotel that benefits 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 be back up and running in about 60 to 90 days.
In addition, Singer said the hotel suffered from the effects of COVID-19. As a result of the pandemic, all 2020 and 2021 conventions were lifted and the occupancy rate during the pandemic was less than 7%. The hotel lost at least $ 18 million in 2020 and is set to lose at least another $ 20 million in 2021, according to hotel owners.
Singer said he was optimistic that the hotel’s secured lender would work cooperatively to ensure the hotel gets stronger again after its restructuring and the region and nation get out of the pandemic.
When the hotel reopens in mid-2021, the property expects to have a new manager and brand. One with the ability and willingness to inject tens of millions in capital into the hotel and its operations, and a robust pipeline of future convention business for the hotel.
The impact of the pandemic has been significant, Singer said.
“The owner is committed to a process that will ensure the long-term viability of the hotel and propel business to both the hotel and major downtown and the San Jose Convention Center,” he added.
The 805-room landmark hotel at 170 South Market St. The 20-story, two-tower hotel has 65,000 square feet of state-of-the-art meeting and event space, three restaurants and bars, a cafe-bakery, a fitness center, and a pool on the Roof and a pavilion. The hotel has large ballrooms for large conferences and meetings, and intimate spaces for smaller gatherings.