Although more than a year has passed since President Donald Trump departed the Oval Office, the Trump name remains as politically polarizing as ever, leaving the Trump Hotels portfolio beset by challenges.
Dan Wasiolek, a senior equity analyst for the financial services firm Morningstar, said that controversy surrounding Trump has created an “overhang” on the company in general.
The luxury brand’s latest sign of churn is the offloading of its crown jewel, the Trump International Hotel Washington, D.C. Although the 263-room property emerged as a political hot spot during Trump’s presidency, the Trump Organization sold the hotel’s lease to Miami-based CGI Merchant Group. In partnership with Hilton Worldwide Holdings, CGI plans to convert the property into a Waldorf Astoria hotel.
The deal was completed Wednesday, according to reports. In a tweet retweeted by the Trump Organization, Eric Trump said that the transaction marked the largest sale of a historic hotel in 15 years.
The D.C. property joins a list of former Trump-branded hotels that have been reflagged in recent years, including properties in Panama City, Toronto, Vancouver and Manhattan’s Soho neighborhood.
In 2015, the group had 14 properties within its portfolio. Today it has nine, including one each in New York and Chicago.
“Because of the polarized nature of the political space, around half of the U.S. population doesn’t want to stay in a Trump property,” said Robert Cole, a senior research analyst for lodging and leisure travel at Phocuswright. And, Cole added, because Trump is a populist candidate, some of his supporters may not be in the same demographic as guests who stay at his luxury hotels.
According to Cole, two spin-off hospitality concepts that the Trump Organization unveiled several years ago, Scion and American Idea, may have been better able to target Trump’s core audience, in part due to their more accessible positioning at the upscale and midscale price points, respectively. Both brands, however, failed to get off the ground and were scrapped shortly after their launches.
Another red flag for the Trump Organization was the abrupt departure of its CEO, Eric Danziger, in early March; his replacement has yet to be named.
Wasiolek said that Danziger’s departure was further cause for concern.
“Leaving without having someone to replace him certainly raises some potential questions,” Wasiolek said.
Trump Hotels did not respond to a request for comment for this report.
Complications for advisors
For advisors selling Trump properties, it continues to be a challenge to navigate conversations around the brand.
Joe Cerino, president of golf-focused travel company Sophisticated Golfer in West Palm Beach, Fla., sometimes gets pushback when pointing clients to the Trump National Doral Miami, especially when it comes to group travel.
“When you have a group of, say, 12 people, there’s a good chance that some of them may be Republicans and some may be Democrats,” said Cerino. “And that’s the challenge, because the ones that are Democrats just won’t go, and even if it’s just one person, then the whole group won’t go. People would just rather not get into the whole political thing.”
- Related: Virtuoso has dropped Trump Hotels from its network
Trump Hotels’ other golf resorts include the Trump Turnberry Scotland, which Cerino describes as “one of the best courses in Scotland,” and the Trump International Golf Links & Hotel Doonbeg in Ireland.
“At the end of the day, these are good products, with golf courses in very good condition, and the service and food are also very good,” said Cerino. “And it is frustrating, because as a travel seller, I really don’t discuss politics with clients.”
Phocuswright’s Cole similarly sees a dearth of group and corporate business as Trump Hotels’ biggest headwind moving forward.
“Especially in the larger hotels, you need corporate and group traffic,” said Cole. “But folks [planning that travel] are dealing with that whole perception of what it could mean if, say, they decide to have their annual event or board meeting at a Trump hotel.
“Because you are going to have some employees that don’t like that. It’s a nonstarter.”
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