The historic Fairmont Hotel, located in the heart of downtown San Jose’s cultural and entertainment district, is temporarily closing, it was announced on 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 meeting an administrative partner and extending the existing mortgage debt.
The hotel abruptly stopped operations on Friday, transferring its few remaining guests to nearby hotel rooms at the property’s expense.
“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 the city center, nearby businesses and Silicon Valley conventions in a post-COVID- 19, “said Sam Singer, the hotel representative.
Singer said the hotel should prepare for operations again in about 60 to 90 days.
In addition, Singer said the hotel has been impacted by COVID-19. As a result of the pandemic, all conventions for 2020 and 2021 were canceled and occupation during the pandemic was 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 was optimistic that the hotel’s guaranteed lender will work cooperatively to ensure that the hotel comes back stronger after its reorganization and as the region and country exit the pandemic.
When the hotel reopens in mid-2021, the property expects it to have a new manager and a new brand; someone with the ability and willingness to inject tens of millions of dollars of capital into the hotel and its operations, and a robust pipeline of future convention business for the hotel.
The impacts of the pandemic were significant, said Singer.
“The owner is committed to a process that will ensure the hotel’s long-term viability and drive business for both the hotel and the important San Jose center and convention center,” he added.
The hotel is a historic 805-room property at 170 South Market St. The 20-story, two-tier hotel has 65,000 square feet of state-of-the-art event and meeting space, three restaurants with bars, a coffee bakery, a fitness center and a rooftop pool and gazebo. The hotel has large halls for large conferences and conventions, as well as intimate spaces for smaller meetings.