A POPULAR hotel has filed for bankruptcy just two years after opening.
Located in Silverthorne, Colorado, over an hour west of Denver, The Pad is struggling to pay $16.7 million in debt.
The hybrid hotel and hostel reported just $2.1 million in revenue last year, and $1.9 million in the first nine months of this year, Summit Daily reported. It is valued at $21 million.
The room rates range from $45 per night for dorm-type rooms to $325 for suites.
“We wanted to build something that was unique and special,” Rob Baer, co-owner, told the news outlet.
“Now we are in a very hard lending market and a lot of industries, not just hospitality, are going through a very hard refinance situation, so we find ourselves here.”
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He and his wife, Lynne Baer, hope the bankruptcy filing will allow The Pad to stay in business.
The couple faced higher-than-expected construction costs due to sharp price hikes during the pandemic.
In addition to that, The Pad was sued by BRMK Lending, which claimed it hadn't been repaid the $12.9 million it loaned to the hotel.
Two weeks before that suit was filed, Kevin Bowen, the former operations manager at The Pad, also sued the company.
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Bowen claimed he worked there between late 2020 and late 2022, and had agreed to a $195,000 severances but said he only received $150,000.
Lynne Baer said: "For customers of The Pad, even though we filed Chapter 11, our incredible team is still there serving everyone, so we would love to see familiar faces."
“In light of everything, we are hoping for a positive outcome.”
On the news outlet's Facebook post, one local said they "saw this coming."
"Seeing it defaulted on $17 million in loans, and unable to even pay the person who runs the place after one year, that $21 million valuation is a pipe dream," wrote one person.
But other residents said it was a shame to see the company struggle.
"A lot of effort by the owners to build this. A shame it didn't work out," said another person.
Someone else added: "Sad! Such a great place and vibe."
The U.S. Sun reached out to The Pad for more information.
A BIGGER ISSUE
Businesses of all sizes from different industries have filed for bankruptcy this year.
The retail industry has been hit especially hard, with once high-performance stores like Bed Bath & Beyond and Tuesday Morning being forced to shut down all of their brick-and-mortar locations for good.
“Consumers continue to spend, but how and where they spend is evolving,” Bankrate’s chief financial analyst Greg McBride previously told The U.S. Sun.
“More retail spending occurs digitally and less in a physical store location."
Tuesday Morning closed at least 860 stores across the country, and Bed Bath & Beyond closed 360.
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A wedding retailer abruptly closed 100 stores, taking people's payments with them despite not being able to fulfill orders.
Plus, a craft store is facing major bankruptcy fears as it deals with debt.
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