Economy

Hilton To Permanently Close Its Hotel In New York City's Times Square

The Hilton Times Square is the latest victim of the coronavirus pandemic. In a filing with New York’s State Department of Labor, the managing director of the 44-story landmark said it will close permanently next month and 200 jobs will be lost.

The iconic hotel on West 42nd Street was shuttered and furloughs began in mid-March as COVID-19 struck the city, The Wall Street Journal (WSJ) reported.

The property had been operated under the Hilton Hotels & Resorts flag.

In an email to the WSJ, a spokesman for the Sunstone Hotel Investors Inc., the Irvine, California-based real estate investment trust which controls the hotel, said the notice to state officials “was not intended to imply that there is a permanent closure.” He told the newspaper that the filing was intended to tell state officials that the layoffs might last longer than six months. The spokesman added a “definitive reopening date has not been determined or established and will be impacted by negotiations with our lender, as well as market conditions.”

The notice said the 478-room hotel will shutter on Oct. 1.

While the nation’s hospitality sector has been devastated by the outbreak, it especially took a toll on New York City as Broadway shows were put on hold to prevent the spread of the virus, tourists stayed home and business travel was replaced with virtual teleconferencing. In a typical year, New York City sees more than 65 million visitors.

The WSJ reports the Hilton is one of the first hotels to say publicly that it won’t reopen.

In a filing with the Securities and Exchange Commission last month, Sunstone revealed that it has missed mortgage payments since April. The $77 million mortgage is due in November. Discussions are underway with its lenders about possible solutions. The filing reported the value of the property has dwindled to $61 million, down from $108 million.

The Hilton is not the only New York hotel taking a hit.

The city’s hotel occupancy rate fell to nearly 20 percent in April, according to STR Inc., a division of CoStar Group that provides market data on the hotel industry worldwide.

Analysts have said as many as 25,000 New York hotel rooms might never reopen, the WSJ reported.

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