The Pakistan International Airline’s (PIA) iconic Roosevelt Hotel will close its doors to customers permanently from October 31 due to financial constraints.The development comes after the Economic Coordination Committee (ECC) on September 2 approved funds worth $142 million to address the financial challenges faced by the PIA-owned Roosevelt Hotel in New York, US.
In July when Government mulled to decide the fate of the hotel, it was learnt that the luxury property has piqued the interest of a name all too familiar in American real estate: Donald Trump. However, the Cabinet Committee on Privatisation (CCoP) had decided against selling off the Roosevelt and to run it through a joint venture instead.
At the same time , the Islamabad High Court heard a petition challenging the privatization of the hotel. The government denied that the hotel was being privatized and denied claims that Zulfi Bukhari, the PM’s special assistant on overseas Pakistanis, was buying the hotel at a low cost. The petition was disposed of after the government denied the claims. Later Government dismissed Chairman PIA and Zulfi Bukhari from the task force which has to decide the fate of the Roosevelt hotel.
However after the closure of hotel it would mere turn into a property. The mere building may worth to be a couple of millions of US$. As per an assessment in the year 2015, at the average price, the Roosevelt, with its 1,015 rooms, would sell for $636 million. If it sells for the prices of hotels sold in Midtown Manhattan, which are its true comparable, it will sell for between $1 billion and $1.4 billion in enterprise value.
Though there could be many factors in the failure of running Roosevelt hotel, however one reason was that hotel was run by a management company instead of a an individual who could have quality to run it amicably. There must be many likes of Fareed Hassan and Azeem Qureshi in New York who need to be reached out to rescue the Grand Dame of New York as the upswing of the economy has already started all around.
Closure of Roosevelt hotel would be a great setback for already struggling PIA and it would add its vows. PTI Government which is already struggling with economic issues miserably failed to take this case serious and find out a durable solution for the hotel. Selling and closing something easy but running it and making it successful is really difficult and we are habitual of choosing easy ways.