Owner Of Clarion Hotel Near Airport Files For Bankruptcy
A hotel near Hartsfield-Jackson Atlanta International Airport has filed for bankruptcy as tourism and travel continue to feel the impact of the pandemic.
YC Atlanta Hotel LLC, the registered owner of the Clarion Hotel Atlanta Airport, filed for Chapter 11 bankruptcy reorganization on Feb. 3 in the Northern District of Georgia, citing debts between $10M and $50M, according to the filing. The hotel is off Virginia Avenue and 2 miles from the airport.
YC Atlanta is an affiliate of YC Fernley Hotel LLC, a Reno, Nevada-based company run by Balbir Gosar and Baldev Johal. The Atlanta hotel's largest creditor is Atlanta-based hotel finance company Access Point Capital, which has a partially secured claim for $11.9M in unpaid debt, according to the bankruptcy filing.
Other major creditors include Choice Hotels, which owns the Clarion brand, which is owed $86K, and the city of College Park, which is owed $132K, according to the filing.
When reached by phone, Johal, who is managing the bankruptcy restructuring before the court, declined to comment. In April of last year, YC obtained a $161,100 loan from Live Oak Banking Co. as part of the federal Paycheck Protection Program.
Companies controlled by Gosar and Johal own several other hotels in the country, including multiple properties in Corpus Christi, Texas, a Four Points by Sheraton in Juneau, Alaska, and a Best Western in West Yellowstone, Montana.
The hospitality industry is coming off one of the most disastrous years in its history, but a full recovery is still years away, according to industry experts. Since the pandemic began, hotel operators filed for bankruptcy at their fastest pace in January as relief financing begins to run out, Bloomberg reported.
“The impact of COVID-19 on the travel industry so far has been nine times that of 9/11,” American Hotel & Lodging Association officials said in a recent report.
Hotel revenues fell by half in the U.S. last year to $84.6B and are only expected to increase by $26B this year, still 34% below 2019 levels. Lodging research firm STR estimates a full recovery for hotels is at least three years away.