Why Margaritaville Resort Times Square Could Be On The Brink Of A Major Flop

The brightly colored billboards, the souvenir shops, the amateur Disney mascots — some things are practically symbolic of New York City's Times Square. However, just like the millions of pedestrians who pass through the famous Manhattan intersection every year, some Times Square mainstays don't stick around for long. One spot that may soon be booted from its Seventh Avenue address is Margaritaville Resort Times Square.

The happy hour-inspired hotel opened in 2021, Bloomberg reported, when the COVID-19 pandemic was still a major threat to tourism. Despite that, Margaritaville Resort Times Square won over many of its guests and earned rave reviews across several websites. It boasts a 4.4-star rating on Google, and according to the Margaritaville website, it was voted the #1 hotel in New York City on Tripadvisor. Some visitors have praised the property's convenient location, its relaxing outdoor pool, and its modern tropical decor. Even with some success and positive reception, Margaritaville Resort Times Square could shutter, just two years after opening its doors and soon after the September 1, 2023 death of "Margaritaville" singer Jimmy Buffett.

Margaritaville Resort Times Square filed for bankruptcy twice

When Margaritaville Resort Times Square first opened, it was clearly an ambitious project. A 2021 press release detailed its 32 floors of hotel space, no less than five eateries, and a 32-foot replica of the Statue of Liberty. It's no surprise that the development came with a hefty $370 million price tag, per Bloomberg.

The endeavor may have been too expensive for Margaritaville Resort Times Square's owner, Soho Properties, to keep up. According to Forbes, the real estate company suffered a financial loss after the resort opened and was unable to pay back debts. In July 2023, the property was at risk of being repossessed and placed in a foreclosure auction, but the owners swiftly filed for chapter 11 bankruptcy to block the auction from going forward.

In August 2023, Soho Properties filed for bankruptcy again, Commercial Observer reported, and the real estate firm blamed a weak market for its financial woes. The bankruptcy filing noted that occupancy rates remained at or above 95%, signaling that the hotel may be popular among NYC tourists, even if it's suffering behind the scenes.

Margaritaville Resort Times Square's owners remain optimistic

As of September 2023, Margaritaville Times Square is still available to book and continues to run as normal. Previously, Margaritaville Chief Investment Officer Evan Laskin promised that the bankruptcies wouldn't interfere with hotel operations, adding that his company "looks forward to delivering fun and escapism through the resort and restaurant experiences for guests and New Yorkers for a long time," according to Bloomberg.

However, only time will tell if the establishment will remain open and be able to turn its financial bad luck around. Even if the Times Square location does shut down, the "5 o'clock-somewhere" lifestyle can still be found in other vacation hotspots. Besides New York City, Margaritaville has resorts in Florida, California, Mexico, Costa Rica, and numerous other locations. There are even RV parks, private home rentals, a cruise ship, and other ways to experience a taste of Margaritaville.

Thankfully, for now, those involved in the Times Square location remain optimistic. Forbes reported that in a sworn declaration filed with the court, Soho Property's Sethian Pomerantz stated, "Given the projections for future income, the appraised value of the Hotel, and the solid location in Times Square where tourism is reviving, the Debtor believes that a refinancing of the Hotel can ultimately be achieved within a reasonable period of time."