Sofitel Auckland Viaduct Harbor (read more) collapsed last week, and now the operator behind Sofitel Berlin has filed for bankruptcy.
Sofitel Berlin that has 267 rooms and 44 suites, opened in 2005. The hotel will continue operations until the end of August, while the administrator is coming up with a restructuring plan.
You can access Sofitel Berlin’s website here.
Here’s an excerpt through Google Translate from the Berliner Morgenpost (access their piece here)
Sofitel am Kudamm had applied for short-time work allowance for its employees, and the deferral of the lease had been agreed with the landlord of the building, said Brockdorff. The decisive factor for how the hotel will continue from the end of August is also how the number of bookings will develop, the lawyer continues. The occupancy rate of the five-star hotel is currently only 25 percent.
The provisional insolvency administrator Brockdorff is now drawing up a restructuring plan for the operating company. One thing is clear: if hotel operations are to continue beyond the end of August, creditors – including the landlord of the building – have to forego money. “The continuation perspective includes founding a new operating company or restructuring the existing company in the current bankruptcy proceedings,” said Brockdorff.
We will see many hotel bankruptcies in the next 12 to 24 months, especially at city center properties that have seen their corporate travel and conference business evaporate, and those will be depressed for an extended period.
The prices of hotels went through the roof in the past few years, and they were priced for perfection and ever-increasing ADRs (Average Daily Rates).
The lenders will eventually decide if they decide to take over and to whom to award the management contract. Many will likely continue to operate under their existing flags. Some hotels will be converted to condos