New York’s mayor terminates $220 million lease for Roosevelt hotel

Pakistan International Airlines (PIA) has again come into the spotlight; however, this time, the national carrier has nothing to do with the developments in question. As per reports, the mayor of New York City (NYC) decided to terminate a $220 million lease with Pakistani authorities.

The lease agreement was for the Roosevelt Hotel in NYC, which is owned by PIA. However, because of rising domestic anti-asylum sentiments, the mayor binned the deal to avoid criticisms of wasting taxpayer funds to support asylum seekers.

This spells bad news for PIA, which will now have to find thousands of guests for the soon-to-be vacant Roosevelt Hotel. The hotel ceased operations in 2020 after sustaining large financial losses during the COVID-19 pandemic. It was only able to remain financially buoyant because Texas’ conservative governor reportedly expelled asylum seekers from his state to other liberal states around 2023.

According to reports, the hotel has a staggering 1025 rooms, which were housing over ten thousand immigrants at an estimated cost of $200 per night. At the time the lease was inked, it appeared as a mutually beneficial deal for both PIA and NYC.

However, a fall in the influx of migrants has been witnessed since 2023, when a colossal 4,000 immigrants were coming into the city every week. This number has now fallen to just 350 immigrants per week. Reports reveal that PIA’s Roosevelt Hotel was a major immigrant processing centre catering to and housing approximately three-quarters of immigrants coming into NYC.

With migration levels under control and US President Donald Trump’s hardline stance against immigrants, it did not seem like a beneficial deal to continue the lease agreement. Eric Adams, the mayor of NYC, had been facing rising criticisms from both the right wing and the government. The pressure resulted in convincing him to shut the facility down, causing PIA to lose its sole client for the hotel.

The lease had been signed with the NYC administration for an annual amount of approximately $73 million, and it was agreed that the deal would last for three years, allowing for PIA to rake in a total of $220 million. With the hotel out of business, many wonder how this will affect the privatisation prospects of the airline.

Since the national carrier has lost a steady source of revenue, its profitability figures may take a hit, causing it to not seem as attractive as before. NYC administration’s decision could prove to be costly for PIA.