Crain’s New York Business: AKA Wall Street hotel closes permanently
By Gwen Everett
September 30, 2020
Another city hotel has bit the dust. AKA Wall Street has shut down permanently, a filing with the Department of Labor shows.
The hotel made its closure permanent after temporarily shutting its doors in late March amid the Covid-19 pandemic. The latest move puts 31 employees out of work, per a worker adjustment and retraining notification filed Tuesday.
AKA, the hotel group owned by Korman Communities, operates 11 locations globally, including five (previously six) in New York. Its Tribeca location extended its temporary shutdown, first announced in March, days before the filings showed the Wall Street location had closed, per the same Labor Department filings.
Closure of the Wall Street location follows shutdowns of three other hotels in Lower Manhattan: The Assemblage on John Street, the W New York Downtown on Albany Street, and Suites by Sonder on Wall Street. The closures illustrate how stressed the hotel industry has become in the wake of the pandemic.
“All hotels have been hit with a massive liquidity problem due to an immediate drop in revenue by 85% starting on March 22, that is now turning to a solvency problem, which will account for more hotel closures,” said Vijay Dandapani, president of the Hotel Association of New York City. AKA’s closure demonstrates the headwinds facing the industry, he said.
Before the pandemic, Lower Manhattan was home to 37 hotels and as of Sept. 1, 27 hotels were operating, said Andrew Breslau, spokesman for the Downtown Alliance. The alliance, which represents business interests in that part of the city, is focused on finding new ways to “articulate demand” for hotels, he said.
But the decline of tourism across the city is a significant hurdle. Hotels depend on a mix of business and leisure travel. Limiting the spread of Covid-19 has meant halting travel and activities that drive it. People from a majority of U.S. states must quarantine for 14 days if they enter New York, per a rule from Gov. Andrew Cuomo. That is affecting industries, such as hospitality, that depend on tourism.
Foot-traffic data can be one indicator of how the pandemic is affecting neighborhoods. The Financial District is among the hardest hit neighborhoods, with foot traffic down 42% as of mid-September, according to FourSquare. Although that’s not as bad as Times Square, the numbers lag Fifth Avenue in Midtown, 125th Street in Harlem and Morris Park in the Bronx.
“While the proximate cause is obviously the pandemic, it is aggravated by the strictures on travel to NYC,” Dandapani said, referencing the quarantine rule.
It’s bad news for hotels, he said: “The industry is stressed to the point of being comatose.”
Representatives for the hotel and AKA did not respond to requests for comment.