The impending demise of the Hilton in Times Square is just the tip of the iceberg when it comes to what experts believe will be a wave of hotel closures across the country.
The 44-story landmark hotel in the heart of Manhattan, which is set to shut down permanently on Oct. 1, has lots of company.
Roughly one in four hotels across the country have fallen at least 30 days behind on their mortgage payments, according to a recent report by Trepp, with urban hotels in hospitality hubs like the Big Apple particularly hard-hit.
In fact, things are so bad that hotel industry leaders and municipal officials in New York and other major cities are already arguing about what will happen after hotels close.
In particular, industry executives are warning that a proposal being debated by the New York City Council could make a tough situation even worse, requiring new owners of hotels that have been sold to keep all workers on for 90 days, The Wall Street Journal reports. It follows on the heels of similar legislation passed by city officials in Los Angeles and other big cities, the Journal reports.
The bill before the New York City Council, slated for a vote next week, would also require hotels to give a heads-up to guests on a range of potentially bothersome conditions, from bed bugs and Wi-Fi service that has gone on the blink to picket lines and strikes.
“This will do damage to an industry that’s already been hurt worse than anything we could have imagined,” Chip Rogers, president and chief executive of the American Hotel & Lodging Association, told the WSJ.
Overall, just over a third of all hotels in New York are behind on their mortgage payments, with nearly 60 percent of the hotel rooms on Manhattan still closed at the start of September, PricewaterhouseCoopers' second-quarter Manhattan Lodging Index.
New York hotels have also taken a devastating hit to their revenue, falling 81.6 percent in the second quarter compared to last year, according to PricewaterhouseCoopers.