TLTP
ISLAMABAD
Terming all the news reports about closure of Roosevelt Hotel as speculation and nothing more than political point-scoring, Minister of Aviation Ghulam Sarwar Khan has said that there is no agenda or programme under consideration of the government to sell or dispose of the iconic hotel in New York. In a statement on Monday, he said that the hotel is currently operational and has valid contracts till December this year with various other airlines. Multiple options are being considered for its future and all decisions are made collectively by the Hotel’s Board and the government of Pakistan.
He further reiterated that 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, he added.
The minister said that since 2019, the financial position of Roosevelt Hotel has been in the red, despite the fact that it is run by world’s premier Hotel Management Company ‘Interstate’. The main reason for its downfall is progressive decline of its infrastructure and dilapidated room conditions, further reinforced by the global Covid-19 pandemic.
He said that with limited to no flights to the city during peak Covid-19 days and almost zero occupancy, Roosevelt’s cash flows and revenue streams were badly affected.The Hotel Management still tried to utilize the hotel by providing services to medical staff at discounted rates, but with them gone now, the conditions are bad.
He said that Roosevelt Hotel’s management had obtained a loan of USD 160 million from JP Morgan Bank, the payments of which were being made regularly by the hotel management from its own revenue stream. By the year 2020 the accumulated loan amount payable reduced to USD 105 million, making regular and timely payments without any default.
However citing the overall situation of the travel and hotel industry, the lender sold off its liabilities to another company which was very much interested in acquiring the Hotel for itself. It started eyeing at calling back the loan during these times and attempting a take over of the property. This was unacceptable to PIA and the government of Pakistan.
He said the PIA management sensing the possible outcomes, convinced the government to intervene by paying off the loans in one go and getting the asset secured for the country. TLTP
