Investors find Trump hotels underperforming
CHICAGO — Ten years ago, retired electrician Dave Roberts invested $650,000 in Donald Trump. Roberts bought a single room in Trump’s hotel on the Chicago River, then waited for his share of the Trump profit stream.
“Everything he touches turns to gold,” Roberts remembered being told.
But the gold wore off, starting in 2016. Fewer guests checked in. Revenue dropped. Roberts estimated that his property value decreased by half as the real estate market was flooded with unsold Trump hotel rooms.
“I don’t even like walking past the building” now, he said. “I can’t even look at it.”
As a private company, the Trump Organization says little about its financial ups and downs. But The Washington Post obtained details from two of President Donald Trump’s landmark properties — his luxury hotels in Chicago and Manhattan — from small-time investors such as Roberts, who get details that the public does not.
Those investors — and the internal documents they provided — showed that revenue at both properties dropped noticeably as Trump’s political career took off. The decreases have stirred tensions in the buildings and left many investors worried that the Trump brand may be curdling in the liberal cities where Trump built much of his empire.
In New York, documents show that the ownership board at Trump’s hotel considered the stunning idea of removing the Trump name from the hotel the president still calls his “flagship.” The idea stalled.
For the small-time investors who bought individual hotel rooms under an unusual arrangement that allowed Trump to offload financial risks onto others, the downturn has brought a bitter sense that they’re suffering for the political rise of a figure who is now loathed in their communities.
“There’s a lot of people who have nothing to do with him that are being injured,” said Howard Finkelstein, an investor in Trump’s New York hotel. “We’re the ones that are paying the price for his ridiculous ego. There’s no reason to have that name on there.” The Trump International Hotel and Tower, built beside the Chicago River in 2006, once attracted small investors, who bought individual rooms in order to share in any profit. But many of the rooms haven’t sold, and fewer people are staying at the hotel because of the polarizing politics of the developer. One investor said his $650,000 investment is now worth half that.
Between 2015 and 2017, revenue from room rentals at the New York hotel declined 14 percent after adjusting for inflation, according to quarterly statements the Trump Organization provided to unit owners.
At Trump’s hotel in Chicago, a document investors saw recently showed a similar drop-off. Bookings fell 8 percent from 2015 to 2016, and this year’s figures are still lower than the pace in 2016.
Eric Trump — the president’s son, who now runs the Trump Organization with his brother Donald Jr. — said this “has been an incredible year” for the Trump hotel brand. Across all Trump hotels, he said, business has increased since 2017.
The Trump Organization declined to give specifics about individual hotels or the chain as a whole.
There are now 11 Trumpbranded hotels worldwide. That number is smaller than it used to be: Since Inauguration Day 2017, the owners of Trump hotels in Toronto, Panama and New York’s SoHo neighborhood all cut ties with the Trump brand and changed their hotels’ names. Marriott announced this week that it will take over the Panama property.
Among the remaining 11, some seem to be prospering: Trump’s hotel in Washington, D.C., is busy with conservative groups, foreign embassy parties and GOP fundraisers. At Trump’s hotel in Las Vegas, investors said their low rates have brought an influx of tourists from China.
But the news has been worse at the Trump hotels in New York and Chicago, according to people who have invested in them.