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The iconic Fairmont hotel, located in the heart of downtown San Jose’s culture and entertainment district, is temporarily closing, it was announced Friday.
FMT SJ LLC, operator of the iconic hotel, filed a Chapter 11 reorganization request on Friday, temporarily shutting down the hotel for three months while it finds a management partner and extends existing mortgage debt.
The hotel abruptly ceased operations on Friday, moving its few remaining guests to rooms in nearby hotels 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 vibrant downtown city, nearby businesses, and Silicon conventions. Valley in a post-COVID-19 world, ”said Sam Singer, the hotel representative.
Singer said the hotel is expected to re-prepare in about 60 to 90 days.
Additionally, Singer said the hotel suffered from the effects of COVID-19. Due to the pandemic, all conventions for 2020 and 2021 have been canceled and the occupancy rate throughout the pandemic has been below 7%. The hotel lost at least $ 18 million in 2020 and is expected to lose at least an additional $ 20 million in 2021, according to the hotel owner.
Singer said he was optimistic the hotel’s secured lender will work cooperatively to ensure the hotel comes back stronger after its reorganization and as the region and country 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 pipeline 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 conduct business both at the hotel and at the major downtown San Jose and convention center,” at -he adds.
The hotel is an 805-room historic property at 170 South Market St. The 20-story, two-tower hotel features 65,000 square feet of state-of-the-art meeting and event space, three restaurants with bars, a café-bakery, fitness center, rooftop pool and gazebo. The hotel has large ballrooms for large conferences and conventions as well as intimate spaces for small gatherings.
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