The iconic Fairmont Hotel, located in the heart of San Jose’s downtown cultural and entertainment district, will be temporarily closed, it was announced Friday.
FMT SJ LLC, the operator of the iconic hotel, filed for Chapter 11 reorganization on Friday, temporarily closing the hotel for up to three months while it finds a managing partner and extends existing mortgage debt.
The hotel abruptly ceased operations on Friday and relocated the few remaining guests to nearby hotel rooms at the property’s expense.
“We know that by taking this difficult step, we will once again be a more vibrant hotel for the benefit of all in San Jose, including the vibrancy of downtown, nearby businesses, and Silicon Valley conventions in a post-COVID-19 world. . “, said Sam Singer, representative of the hotel.
Singer said the hotel is expected to be ready for operations again in about 60 to 90 days.
Additionally, Singer said the hotel has suffered the impacts of COVID-19. As a result of the pandemic, all conventions for 2020 and 2021 were canceled, and occupancy during the pandemic has been less than 7%. The hotel lost at least $ 18 million in 2020 and is projected to lose at least another $ 20 million in 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 the nation emerge 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 portfolio of future convention business for the hotel.
The impacts of the pandemic have been significant, Singer said.
“The owner is committed to a process that will ensure the long-term viability of the hotel and boost business for both the hotel and the major San José downtown and convention center,” he added.
The hotel is a historic 805-room property 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 with bars, a coffee shop, a fitness center, and a pool and a gazebo on the roof. The hotel has large ballrooms for large conferences and conventions, as well as intimate spaces for smaller gatherings.