Trump Org. Blames Zika, Gun Violence for “Severely Underperforming” Hotels – By Bess Levin (Vanity Fair) / May 15 2019
Don Jr. and Eric swear a dip in income has nothing whatsoever to do with their radioactive dad.
In some ways, being president of the United States has been good for Donald Trump’s bottom line. For instance, when he spends weekends at Mar-a-Lago, his resort charges (taxpayers) top dollar for rooms for Secret Service and other members of his entourage, along with their bar tabs—money that winds up in the president’s pocket. Overall, according to an investigation by ProPublica, between 2015, when the real-estate developer kicked off his bid for office, and June 2018, “at least $16.1 million has poured into Trump Organization-managed and branded hotels, golf courses, and restaurants from his campaign, Republican organizations, and government agencies.” And because the business empire is run by a trust of which he is the sole beneficiary, he profits handsomely from the many hotel stays, meals, and banquet-hall rentals.
Yet in other ways, becoming president has been very bad for Trump’s business, thanks to his name becoming synonymous with racism, corruption, sexual misconduct, possible tax fraud, and mental instability. (Ironically, had Trump not insisted on slapping his name on the side of every single one of his properties in 1,000-inch font, the damage might not have been so bad.) Earlier this week, we learned that tenants in New York’s Trump Tower are selling their condos at a loss just to escape the taint by association, and a new report shows the president‘s other properties aren’t faring much better.
According to The Washington Post, business at Trump National Doral Miami is reportedly in “sharp decline.” At the resort, which the president has listed in disclosures as his “biggest moneymaker hotel,” net operating income from 2015 to 2017 was down a whopping 69 percent, so much so that Jessica Vachiratevanurak, a tax consultant for the company, said late last year that the property was “severely underperforming” due to a “negative connotation that is associated with the brand.” As the Post notes, the decline at Doral is “especially significant because the resort had seemed better insulated from political backlash than other Trump properties, protected by its place in golf’s history, by its recent renovations, and by its location in a booming state that Trump won in 2016.” Yet Michael Bellisario, an analyst with Robert W. Baird & Co. who reviewed data that the Trump Organization sent to Miami-Dade County—which is “legally required to be accurate”—confirmed Vachiratevanurak’s assessment. “Profitability is down across the board,” he said, adding that the only reason the situation isn’t worse is because the company has cut costs.
Doral, of course, is not the only property damaged by presidential association. In addition to Trump Tower, which, per Bloomberg, “has been struggling for months to find tenants for more than 42,000 square feet of vacant office space,” Trump’s hotel along the Chicago River has seen revenue fall since he got into the race. Ask the company, run by Don Jr. and Eric Trump, why income is down, though, and they’ll insist it has nothing to do with their radioactive father. In a statement about the Chicago property, the Trump Organization claimed the drop in revenue is due to—wait for it—“the perceived threat of gun violence [which] has harmed visitation to the destination,” despite the fact that the figures it submitted to investors and Cook County, Illinois, show no other Chicago competitors have experienced a similar decline. (“Among the hotel community in Chicago, everyone is aware of the relative underperformance of the Trump hotel over the last two to three years,” Bellisario told the Post.) Meanwhile, the family business has another excuse for why revenue has dropped at Doral: fears of Zika and hurricanes, which it claims have driven tourists away from South Florida. (Again, data the company itself provided to Miami-Dade County “showed competing resorts in the same region of Florida still outperformed the Trump resort in the key metrics of room occupancy and average room rate.”)
And that’s when Team Trump is admitting there’s a problem at all: Last year, Eric told a reporter, “The Doral is on fire,” and in a statement to the Post huffily rejected the notion that the Trump taint has affected business. “This story is completely senseless,” he said. “Our iconic properties are the best in the world, and our portfolio is unrivaled by anyone.”
Still, there is a silver lining to declining revenue that can be directly attributed to the stench of Trump: After presenting Miami-Dade County with the situation at Doral, the magistrate lowered the assessed value of the property to $105.6 million from $110.3 million, saving Trump about $80,000 in taxes.