It is not unheard of for airlines to own other products/services related to the travel experience. For example, the parent company of Allegiant Air, Allegiant Travel Company, owns the Sunseeker Resort in Florida. Doing this allows Allegiant to bundle vacation offers and make an appeal to leisure travelers beyond just low air fares or convenient routes.

Photo: sockagphoto | Shutterstock

Offering hotels and other travel products can help airlines boost revenues in a notoriously low-margin business. However, some airlines own properties that might be a bit more surprising than Allegiant. For example, Pakistan International Airlines (PIA) owns the Roosevelt Hotel in New York City. While this could be a potentially lucrative and important revenue stream for PIA, especially in the wake of a high-profile scandal regarding the credentials of its pilots that locked it out of key markets, PIA is facing another hardship thanks to New York City’s government.

When did Pakistan International Airlines purchase a hotel in New York City?

It might seem a bit out of the ordinary that an airline as small as Pakistan International Airlines owns a hotel in The Big Apple. According to Profit, PIA first fully acquired the hotel in the year 2000. The Roosevelt was once seen as a luxurious facility. It is in a prime location, situated just a block away from the New York Stock Exchange and Wall Street. Being in Manhattan, it is just a few blocks from the World Trade Center as well, making it an ideal location for travelers in New York for business.

Photo: Profit

Despite its strong location, the Roosevelt Hotel was shut down permanently in 2020. The drop in travel demand caused by the COVID-19 pandemic was strong enough to permanently end the hotel’s 96-year history. The property quickly became a liability for PIA, which needed to find a way to generate revenue from the facility.

Luckily, New York City’s government had a use for the building, and leased it from PIA. New York City is notorious for receiving immigrants from other nations, and the city’s government decided to open a migrant shelter as new US residents tried to gain self-sufficiency in the United States. This initiative began in June 2023 with a three-year lease. With 1,025 rooms, the Roosevelt Hotel had the space needed to effectively care for immigrants starting their lives in the United States.

Photo: jremes84 | Shutterstock

New York City leased the building at a time when a record-breaking number of asylum seekers were immigrating to America. The City of New York reports that The Roosevelt Hotel Arrival Center served about 173,000 people during its existence. At the peak of the crisis, the facility served 4,000 asylum seekers every week. However, the city is now closing the arrival center, which will give PIA a difficult challenge.

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PIA will be harmed by New York City’s decision

Despite the success of the arrival center, New York City announced on February 24th that it would close the facility. This poses a significant challenge for Pakistan International Airlines. According to Ch-aviation, the lease signed by New York City was worth $220 million, an important asset for an airline that consistently encounters currency shortages.

Photo: Mike Fuchslocher | Shutterstock

Even before New York City announced it would vacate the property, PIA showed a lot of interest in selling the hotel. There were several talks about closing the hotel or redeveloping it, though these conversations were characterized as “on again, off again.” Some of these talks did progress rather far. Last year, Pakistan’s government signed an agreement with a US consortium valued at over $78 million to assist in selling or reviving the hotel.

The closure of The Roosevelt Hotel Arrival Center comes as the Trump Administration continues to criticize agencies for using US taxpayer money to fund immigration programs. As of the time of writing, it is unknown how PIA will address these changes.