Getting rid of the Trump name!

SSTH Editorial Team | 28 Dec, 2017

When I visited Washington DC last May, I contacted the Trump International Hotel on Pennsylvania Avenue just down the street from the White House to enquire if I, as a European hospitality journalist, could come for a visit and conduct an interview.

The PR lady told me basically, "If you want to come down here and write an article about how this is the greatest hotel in the world, OK, but otherwise forget it".

There was total reluctance to discuss anything regarding the property's performance, e.g. ADR, occupancy, RevPAR, etc. This was a curious response, since in fact the hotel has done very well so far in 2017.

Getting rid of the Trump name

Indeed, Trump's Washington property performed way above expectations turning a profit of US$1.97 million over the first four months of 2017, despite company projections that it would lose US$2.1 million during that same period.

This was 192% better than what the Trump family predicted when the hotel opened in fall 2016.

The ADR through April 2017 came in at US$652.98 – 57% better than budgeted and F & B sales reached US$8.2 million - 37.2% above budget. 

Not all hoteliers want the Trump name

However, not all hoteliers are enchanted with the Trump name.

What seems to work well in Washington isn't necessarily acceptable elsewhere.

In fact, room prices at many Trump properties have tumbled since January and now three Trump hotels are getting rid of the Trump brand, including properties located in New York, Toronto and Panama.

Trump International Hotel and Tower in Toronto

The first hotel to extricate itself from the Trump affiliation was the 65-story Trump International Hotel and Tower in Toronto, whose new owner, JCF Capital, announced at the end of June that it had reached an agreement to end the Trump Organization’s contract to manage the hotel and condominium complex.

The hotel has been plagued by poor performance and went into receivership over a year ago in November 2016.

Getting rid of the Trump name

Evidence from a Canadian court case suggests that the hotel, which has a prime location in Toronto’s financial district, struggled to attract business in a market where other luxury hotels typically enjoyed high occupancy levels.

Negative fallout from Trump’s political campaign and presidency seems to have dragged down the property's performance.

For example, Hollywood stars and film studios reportedly avoided the hotel during the Toronto International Film Festival, held in September 2016. However, prior to Trump’s move into politics, the property had been a prominent venue for news conferences and celebrity gatherings.

There is another Trump International Hotel & Tower in Vancouver, which opened this year and still bears the Trump name, despite calls from the city’s mayor for its removal.

The Trump SoHo de-flagged

The Trump SoHo is in the Donald's hometown, New York.

In this case, the Trumps themselves, are taking steps to remove the Trump name from the property which has had a chequered history and has now been implicated in the ongoing investigations into Russian influence on the 2016 presidential election being led by the Justice Department's special counsel, Robert Mueller.

Trump and his two oldest children, Donald Jr. and Ivanka, partnered with a real estate firm, the Bayrock Group, on a series of real estate deals between 2002 and about 2011, the most prominent of which was the Trump SoHo.

According to Timothy L. O'Brien, a Bloomberg journalist, one of Bayrock's principals was a career criminal named Felix Sater, who had ties to Russian and American organised crime groups.

Before working with the company and with Trump, he had served as a mob informant for the US Government, and fled to Moscow to avoid criminal charges while boasting of his KGB and Kremlin contacts.

Getting rid of the Trump name

The property is a mixed-use hotel and condominium project and had trouble selling the condo units after it opened.

Subsequently, many of the early buyers sued Bayrock and the Trumps for misrepresenting the project's investment prospects.

Otherwise, the hotel was a poor performer and went into foreclosure in 2013, after which a new company took over from Bayrock and the Trumps, but the Trump Organization continued to manage the hotel until late November (2017), when the brand was finally removed from the property.

Panama hotel wants Trump name out

At the end of November, it was reported that yet another hotel is moving to rid itself of the Trump brand.

Ithaca Capital Partners, who own the 70-floor Trump Ocean Club International Hotel and Tower in Panama City want to remove the Trump Organization and brand. The property, which was completed in 2011, was Trump's first international hotel project.

The firm pulled out of a Rio de Janeiro hotel project in December 2016 after a Brazilian prosecutor began investigating whether pension fund managers were bribed to put money into commercial projects, including Trump’s.

Getting rid of the Trump name

The Panama complex includes apartments and a casino in a waterfront building that has earned Trump between US$30 and US$50 million.

Despite luxurious amenities, the hotel has been a poor performer and the owners of apartments and hotel units at the property have complained about Trump’s management.

Indeed, according to FairFx, a London-based provider of travel-currency services, prices at the Panama hotel have fallen by 32% since January.

Already, in 2015, the Trump Organization was ejected as managers of the property.


Learn more about SSTH programs