How Donald Trump’s campaign may cost his travel business
Donald Trump made it clear from day one of his presidential bid that he’d be mixing business and politics, with his newest property: the Trump International Hotel Washington, D.C., housed in the historic old post office, and blocks away from the Capitol and the White House.
“We’re just opening up on Pennsylvania Avenue right next to the White House, so if I don’t get there one way, I’m going to get to Pennsylvania Avenue another,” he said.
It may be the part of Trump’s business most vulnerable to customers voting with their wallets, reports CBS News travel editor Peter Greenberg.
Trump’s presidential campaign could have a lasting, negative impact on his businesses. A recent survey by Travel Weekly found 61 percent of travel agents have not been recommending Trump-branded hotels and resorts since the billionaire began his run for president.
His new hotel is just part of a travel portfolio that includes several U.S. hotels, 17 golf clubs, a winery, and a hotel management and licensing business that exports the Trump name to exotic locations, like Panama and Waikiki.
“You need media attention,” said Mickael Damelincourt, the Washington hotel’s managing director. “I think I got enough media attention over the last 12 months, so this is fantastic for me.”
But some of Trump’s comments throughout his campaign (“They’re bringing drugs. They’re bringing crime. They’re rapists.”) have also sent shockwaves through the hospitality industry.
Alex Zozaya, CEO of the travel company Apple Leisure Group, removed the Trump name and offerings for Trump properties from all his brochures and website.
“One thing’s for sure: the Trump brand, it used to be an asset, and now it’s a liability,” Zozaya said.
And celebrity chefs José Andrés and Geoffrey Zakarian pulled their restaurants from the D.C. hotel.
Arnie Weissmann, editor-in-chief of the industry publication Travel Weekly, says the leaked videotape of Trump making lewd comments about women in 2005 may be a tipping point for agents who book hotels.
“Travel agents are overwhelmingly women,” Weissmann said. “Travel decisions are made overwhelmingly by women. We surveyed our readership recently, and they said that 50% of their clients are proactively saying, ‘Don’t put me in a Trump hotel.’”
Trump himself paints a different picture. During a June deposition for one of two lawsuits he filed in reaction to the chefs pulling out of his hotel, he was asked about the impact his presidential bid has had on business.
“I don’t think it’s had much,” Trump said. “One example where it’s actually been very positive is in Florida, Mar-a-Lago. The manager told me recently, he said, ‘Boy, this is the best -- it is actually the best year we’ve ever had at Mar-a-Lago.’ And I was looking at the numbers and I said, ‘What do you attribute this to?’ He said, ‘The campaign.’”
Forbes editor Dan Alexander says revenues at Trump golf courses were all up in the last year. But in other areas, the response has been mixed.
“Some of his partners in the Middle East, who he has licensing deals with, as you can imagine are not very happy with some of his comments,” Alexander said. “On the flip side, we’ve talked to some of his partners in places like the Philippines, who say, ‘Hey, there’s a lot more notoriety in Asia. That means we can bring in more people and so they’re very excited about it.’”
The stakes are high at the hotel in Washington, D.C. The Trump family and their partners has poured a reported $200 million into renovating the old post office into a 263-room luxury hotel.
Trump’s organization also has a nearly $200 million, 60-year lease for the building with the U.S. Government.
Greenberg asked Damelincourt, “What about all the rumors that corporations or travel companies that are booking away from you guys now -- have you seen that at all?”
“No, because the numbers have been a lot higher than what I’ve seen in other Trump hotels,” Damelincourt replied. “It’s always going back to business.”
“So you’re telling me now that, at least in the hotel business, business trumps politics?”
“Business trumps politics.”
Or maybe not. Industry insiders told Greenberg Trump won the bid from the government because he substantially overpaid for the deal, and competitors like Hilton and Marriott dropped out.
Marriott told CBS News that they crunched the numbers and determined that, based on the Trump deal, they could not figure out how anybody could make a profit on it.
CBS News reached out to the Trump organization for comment, and has received none.
One final piece of irony, notes Greenberg: Right next door to the Trump Hotel on Pennsylvania Avenue is the headquarters of the Internal Revenue Service.
After our story aired, a spokesperson for the Trump Organization provided the following statement:
The Trump Brand remains incredibly strong and we are seeing tremendous success across business units. Trump properties are known for their iconic locations, achieving the highest accolades and for providing unrivaled five-star service. We continue to outperform our competitors and are very enthusiastic about the future and our continued growth.