As the rising costs of operations continue to squeeze cash flow even with strong visitor numbers, a number of small and mid-size hotel and short-term rental platform operators have filed for bankruptcy in the last six months.
In September 2025, the company behind hotels such as The Tuscany and Hotel 27 abruptly shut down, leaving many guests, who had come to New York City from all over the world, without accommodation. The shutdown followed short-term rental platform Sonder filing for Chapter 7 liquidation, after Marriott pulled out of what was supposed to be a multi-decade licensing agreement.
German hotel chain Revo Hospitality Group blamed rising operational costs on it entering voluntary insolvency in January 2026, and two Miami beach resorts filed for Chapter 11 bankruptcy in the Southern District of Florida within a few weeks of each other in late February and early March.
Company behind Hilton, Best Western in downtown Chicago files for Chapter 11 bankruptcy
The latest property to file for Chapter 11 bankruptcy in District of Delaware bankruptcy court while is Chicago-based BY Hotel Spe-3.
Owned by mother-daughter duo Su-Mei Yen and Cassie Yen, the parent company also operating under the name SB Yen Management Group is behind two hotels in downtown Chicago: a Hilton at 1101 South Wabash Avenue and a Best Western at 1100 South Michigan Avenue.
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The filing lists between $100 million and $500 million in estimated assets and the same amount in liabilities, including $146.7 million in mortgage debts.
The parent company owes money to dozens of creditors, including lenders, food suppliers, cleaning services, and construction vendors. Collections will be paused as the case works its way through bankruptcy court.
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Su-Mei and Cassie Yen file for bankruptcy amid foreclosure efforts, multiple lawsuits
“The Debtors attribute the filing to acute liquidity constraints stemming from the COVID-19 pandemic during the properties’ initial ramp-up period, compounded by an unsustainable debt burden,” according to Bondoro.
“[…] Following early pandemic-related distress, the Debtors entered into a forbearance agreement that mandated aggressive terms, including rate and spread increases pushing interest above 8%, additional fees, and partial paydown requirements.”
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The Yens filed for bankruptcy protection amid a looming lawsuit from San Francisco-based lender Acore Capital. The company is asking a court to foreclose on the two hotels, given the owners’ more than $140 million in mortgage debts, The Real Deal reported.
As a secured creditor, Acore has the right to request that a bankruptcy court allow it to proceed with its lawsuit even as the company in question goes through bankruptcy proceedings.
Several other Illinois investors who put money into the company have also filed recent lawsuits, claiming that an agreement for them to back the project, with the expectation of receiving immigration benefits in return, was not honored.
For the time being, the two Chicago hotels are still accepting new reservations from guests.
Although the bankruptcy filing indicates they are expected to continue operating while the parent company undergoes restructuring, the extensive financial and legal problems are likely to spell trouble, even if bankruptcy protection is granted.
Related: Prominent Miami resort files for Chapter 11 bankruptcy
