ISLAMABAD: Pakistani minister for aviation Ghulam Sarwar Khan said on Monday the country had no plans to sell the Roosevelt Hotel, owned by Pakistan International Airlines (PIA), and any decision on the property’s future would be ‘collectively’ taken by the hotel board and the government.
Last week, the hotel in New York’s Manhattan borough said on its website it would close from October 31, after 100 years in service.
The Roosevelt Hotel opened on September 23, 1924 and was leased by Pakistan International Airlines (PIA) in 1979, with an option to purchase the building after 20 years, which it did in 1999.
“There is no agenda or program under consideration of the government to sell or dispose off the iconic Roosevelt Hotel New York,” Khan was quoted as saying in a statement released by his office.
PIA had more than $4 billion in accumulated losses and was struggling financially when flights were grounded in March to curb the spread of the coronavirus pandemic. Just as the airline resumed operations in May, a domestic PIA flight crashed in Karachi, killing 97 of 99 people on board.
An initial inquiry pointed to a number of safety failures, and disclosed that nearly a third of PIA’s pilots may have fake qualifications, after which EASA, the United States Federal Aviation Administration (FAA) and other regulators banned PIA flights.
Explaining reasons for the Roosevelt Hotel’s decline, the aviation minister said: “The main reason for its downfall is progressive decline of its infrastructure and dilapidated room conditions, further reinforced by the global COVID-19 pandemic … With limited to no flights to the city during peak COVID days and almost zero occupancy, Roosevelt’s cash flows and revenue streams were badly affected”
Khan said the hotel was currently operational and had valid contracts with various airlines till December this year.
“Multiple options are being considered for its future and all decisions are made collectively by hotel’s board and the government of Pakistan,” Khan said. “No individual or company or business concern can or will be able influence the decisions or its working. Every decision shall be taken collectively involving all tiers of the government, with transparency and accountability.”
Khurram Shahzad, a members of the Standing Committee of the National Assembly on Privatization, told Arab News last week that a meeting would be held on Monday, today, to “decide about the future plan for the hotel.”
On July 2, 2020, the Cabinet Committee on Privatization held a meeting on the privatization of Roosevelt Hotel, directing the privatization commission to hire a financial adviser to start the privatization process in the light of a report by Ms Deloitte which recommended, “that the highest and best use of the Roosevelt Hotel Property is to redevelop the site into a mixed use (through Joint Venture) of primarily office tower over retail and condominium.”
PIA officials say the Roosevelt hotel has remained profitable throughout its history but suffered a loss of $1.5 million last year.
In September this year, the government approved up to $142 million to meet the hotel’s financial challenges.
