By Shahien Nasiripour and Patrick Clark
Donald Trump’s hotel company looked set for a major expansion across the US in the early months of his presidency. A top executive spoke of two dozen US cities under consideration and 39 signed letters of intent. These days, the business appears stalled.
President Trump’s name has come off one of his luxury US hotels, and the only four new Trump hotels being developed in the US are clustered in three small towns in the Mississippi Delta.
The Trump name — which in 2015 he considered the Trump Organisation’s most valuable asset — has become something of a liability.
Interviews with eight hospitality analysts and consultants suggest that property owners, land developers and lenders are wary of going into business with Trump Hotels, worried about the president’s approval rating and the company’s lack of experience.
“The office of the presidency is casting a shadow over the hotel company,” said Bob Hunter, chief executive of brokerage Hunter Hotel Advisors.
Trump Hotels’ market share has remained largely flat at many of its US hotels, according to System2, a New York-based big-data startup that uses location pings from mobile phones to estimate hotel visits. The Trump Organisation isn’t required to publicly disclose its financial statements or its hotel occupancy rates.
There are a few bright spots. His Washington DC hotel is out-charging the competition, winning business from Republican donors and foreign governments, and the company continues to expand in some parts of the world, with projects in India and Indonesia.
Yet struggles remain. President Trump’s hotel in Chicago, with 339 rooms in a 92-story tower along the
Chicago River, has spent years struggling to land a single tenant for its more than 60,000 sq ft of open retail space. The Trump name was removed from a lower Manhattan hotel last year, as well as from hotels in Toronto and Panama City.
And ambitious plans to launch two new US brands, Scion and the three-star American Idea, are languishing. Eric Danziger, who runs the hotel business, said last June that Trump Hotels had 39 signed letters of intent for its four-star Scion brand.
Mr Danziger also talked last year about almost tripling the number of its US-based hotels, including the possibility of new luxury hotels in Dallas, Denver, San Francisco and Seattle.
Scion and American Idea, however, have yet to open any of the four planned hotels it has announced under either flag. No other new deals have been announced. “These Trump brands just have not gotten legs yet,” said Drew Dimond, who runs Dimond Hotel Consulting Group. “I haven’t heard one developer mention that’s a brand they’d want,” he said.
Some of the challenges for Trump’s hotel business include the company’s lack of brand recognition and large central reservation system, as well as doubts about whether the US hospitality industry can continue an eight-year long streak of revenue growth.
The company says its revenue remains strong.
President Trump’s new line of hotels, Scion and American Idea, are “seeing significant interest and we have a number of deals in the pipeline,” Trump Hotels spokeswoman Christine Da Silva said.
“We are very pleased with the performance of our Trump Hotels portfolio, with most of our properties exceeding our projections to date. Occupancy, revenue and profitability are up across the majority of our hotels.”
She didn’t provide any figures.
Before he took office, Donald Trump’s hotel in Chicago generated 30% more revenue per room in 2016 than the average comparable luxury hotel, according to securities filings.
The hotel in Washington, a 15-minute walk from the White House, often is frequented by President Trump himself and senior officials in his administration, making it a top draw in a town that prizes proximity to power and enabling the hotel to command higher nightly rates than its peers.
Republican campaigns and committees have spent more than $500,000 (€405,100) at President Trump’s Washington hotel since the start of last year, Federal Election Commission filings show.
Saudi Arabia’s representatives in Washington spent hundreds of thousands of dollars there, too.
Trump Hotels has publicly disclosed just four new hotels, all of them owned by a pair of Indian-American brothers from Mississippi with a track record of giving money to Republican campaigns.