WaPo: Trump Org Facing Financial Pain As Pandemic, Reputational Costs Enact Toll
President Donald Trump’s divisive brand of politics had taken a toll on his businesses long before the coronavirus pandemic surfaced earlier this year, but with both factors now in play, the Trump Organization’s financial pain has only deepened.
The Washington Post reported that interviews with current and former Trump Organization employees and tenants, and emails the newspaper obtained “show the pandemic in particular has rattled operations at the company.”
The Trump Organization has laid off or furloughed more than 2,800 employees and resorted to eliminating even the smallest of costs.
The Post reported that “flowers, chocolates and newspapers at its New York hotel” were done away with, and the company “turned off lights in common areas in its Chicago hotel to save on electricity.”
“This was not just a step down,” Eric Danziger, the chief executive of Trump Hotels, told board members of Trump’s Chicago hotel on April 22, according to an account of his phone call obtained by The Post. “This was a steep dive.”
Trump’s resorts in Miami, Las Vegas, Scotland and Ireland — four of his five top-earning hotels — were closed through May after shutting down in March.
The Post estimated from prior financial disclosures that Trump likely “lost out on tens of millions of dollars in revenue over the past three months.”
Though Trump’s businesses are gradually reopening along with the rest of the country, it remains unclear when business will fully return to normal.
The Post noted that analysts “expect the hotel industry to be one of the last sectors to recover given people’s aversion to travel during the pandemic.”
Jan Freitag, a senior vice president at hotel data analysis firm STR, said, “There is corporate group demand that likely will not come back for four or five years.”
Apart from the pandemic, the president’s company also has suffered a reputational loss, The Post noted.
One former Trump Organization executive said the company should exit the hotel business altogether, which The Post reported accounts for about one-third of the company’s revenue.
The executive said that the president’s company has “too many rooms to fill in a market where demand has suffered,” adding: “He is too divisive a character in Chicago and NYC. In any market one wants to be neutral — he leaves many potential guests bitter and hostile.”
A former employee at Trump’s D.C. hotel who was involved with booking conferences told The Post: “The vibe I got was that half of the guests wouldn’t feel comfortable ever coming to a meeting there.”
The former staffer said while some obstacles can be overcome with good salesmanship, “this wasn’t overcome-able.”
Still, it is not all bad news for the Trump Organization, The Post reported.
The company “receives licensing and management fees for some Trump-branded properties that are owned by others; and there is no indication those fees have been disrupted.”