A Surprise Awaited These Travelers at Check-In: The Hotel Was Closed

Eliza Simopoulou and Tasos Simopoulos, siblings from Thessaloniki, Greece, arrived at the Tuscany by LuxUrban hotel in Midtown Manhattan around noon on Monday, eager to check in during their vacation in New York.

But when they reached the building, they found a surprising message posted on the door: The hotel had closed.

The note, signed “Building Ownership,” cited “unresolved safety and compliance issues left by the previous hotel management company, who abandoned the property without notice,” and referred to an order from the Fire Department to vacate immediately. It directed guests to contact their booking agency or credit card company for a refund.

As it turned out, the Tuscany and two other LuxUrban hotels in Manhattan, the Herald and Hotel 27, had shuttered about a week earlier, and the company filed for Chapter 11 bankruptcy protection on Sunday. The closures were previously reported by CBS News.

None of that, however, was conveyed to the hotels’ incoming guests. In fact, Ms. Simopoulou had received an email from LuxUrban the previous day — the same day as the bankruptcy filing — saying she could request an early check-in. Now, she and her brother were scrambling to find a place to stay for the week.

“We’re young, and we’re not rich,” Ms. Simopoulou said as the pair combed through exorbitant hotel listings for that night. She said they had paid $2,070 for a seven-night stay at the Tuscany. Their bank told them reimbursement could take months.

The two were hardly alone. Throughout the day, guests trickled in to the lobby expecting to check in, only to be turned away. A security guard from a third-party firm had as little information as the stranded guests.

James Bricknell, a journalist at the technology publication CNET, arrived at the Tuscany around 5 p.m. on Monday after a day of meetings. He had flown in that morning from Virginia and planned to spend three days working in New York.

“If they had just canceled my reservation, even if they did it this morning, I would’ve been able to do something about it,” said Mr. Bricknell, who had booked the hotel through his company.

Clare Bourke, a spokeswoman for the F.D.N.Y., said fire officials had conducted a routine inspection of the 124-room Tuscany on Sept. 8 and “encountered numerous issues, including a lack of staff.” They issued several violation orders and, when they returned four days later, found that the hotel had been vacated.

As of Wednesday afternoon, websites including Expedia and Hotels.com were still allowing travelers to make new bookings at Hotel 27. They allowed for new bookings at the Tuscany until Tuesday.

The situation was just as strange for guests who had checked in before the hotels shut down. Jose Rodriguez and his family stayed at the Herald for 10 days, on vacation from their home in the Canary Islands. They saw no other guests at the hotel during their stay, Mr. Rodriguez said, and there was no housekeeping staff.

At one point, a person in the lobby asked the family to leave the hotel a negative review online, and the family submitted a complaint through their booking app, Mr. Rodriguez said.

The Rodriguez family checked out of the Herald on Monday, and a lone employee at the front desk confirmed they were the hotel’s last guests.

It was unclear if LuxUrban would try to reopen any of the hotels after bankruptcy restructuring. Filing for bankruptcy “is in the best interest of LuxUrban as a company” and would help “preserve the future of LuxUrban and its assets,” said Leo Jacobs, a lawyer and founder of Jacobs P.C., the firm representing the company in its bankruptcy proceedings.

Multiple emails to LuxUrban went unreturned. The company’s phone number had been disconnected.

New York City’s Office of Special Enforcement sued LuxUrban in April, seeking to recover $1.2 million as part of a settlement agreement over illegal short-term rentals. The city sued after it said LuxUrban refused to pay the settlement, which it had previously acknowledged it would cover.

Mr. Jacobs said the lawsuit “did not have a singular effect” on the company’s decision to file for bankruptcy.

A fourth LuxUrban property in Manhattan, Hotel 46, has not had guests in several months, said Prinkal Sharma, who was working at the front desk on Monday. She said more than half the staff was laid off in January, and that she hadn’t been paid in more than a month.

Ms. Sharma said she had continued to work without pay partly out of hope that the hotel might reopen and she would receive back pay. “We have to feed our kids,” she said, adding that she didn’t know what to do.

Mr. Jacobs said he had no information about employees’ pay.

Vijay Dandapani, the chief executive of the Hotel Association of New York City, said travelers who prepaid and arrived to find their hotel closed would have the best chance at a refund by contacting their credit card company, though it could take a long time to get their money back. Those who had not prepaid should still notify their credit card, but likely wouldn’t be charged because they didn’t check in, he said.

Ultimately, Ms. Simopoulou and her brother were able to find a comparably priced hotel nearby. Once they settled in there, they said, they wouldn’t let the debacle affect their vacation. Still, it was a nerve-racking experience.

“It’s crazy that this can happen,” Ms. Simopoulou said, “and that now it’s happening to us.”

By Gabe Castro-Root