President Trump’s Washington hotel has fallen well behind competing properties despite continuing to charge among the highest rates in the city, according to financial information provided to potential bidders as his company tries to sell the hotel’s lease.
Marketing materials distributed by a real estate firm hired by Trump’s company say that a new owner, operating “unencumbered” by Trump’s name or his management company, could dramatically increase profits, particularly through a massive increase in business with foreign governments.
The hotel “is organically positioned to market and solicit foreign government business” given its “unbelievable proximity to the White House, U.S. Capitol, Internal Revenue Service, Treasury, Department of Justice” and other offices, according to the marketing materials given to potential buyers by the firm, JLL, which was obtained by The Washington Post.
The marketing materials cite 77 official state visits to Washington that have occurred since Trump entered office and say that the hotel “turned away” an estimated 17,100 guest stays in 2019 alone, forgoing as much as $9.2 million in revenue, according to the materials.
The Trump Organization did not respond to questions about how it calculated those figures and whether the hotel was actively turning away foreign governments that call and ask for bookings. JLL did not provide comment.
“People are objecting to us making so much money on the hotel and therefore we may be willing to sell,” said Eric Trump in a statement announcing the proposed sale last month.
Donald Trump Jr., who along with his brother Eric is managing the Trump Organization while their father is in office, told Fox News recently that they were exploring a sale because they had agreed not to pursue events held by foreign governments.
In a Thursday appearance on CNN, which earlier reported some of the information, White House counselor Kellyanne Conway batted away questions about the possible sale.
“It’s a great hotel. Have you been there? The food is delicious, the hotel is great, it has proximity to many places,” she said.
“The family, beginning with President Trump, have made financial sacrifices to be President of the United States,” she said.
Other Trump properties, including his Doral golf resort and Chicago hotel, have suffered steep financial declines since Trump entered office, but the D.C. hotel — operating at the center of Trump’s Washington — has become wildly popular with Republican campaigns, conservative authors, Christian organizations and other Trump-aligned groups holding events in Washington.
Republican groups have spent almost $2.4 million at Trump’s D.C. hotel since January 2017, according to campaign filings. The biggest spenders include a pro-Trump Super PAC, Trump’s own reelection campaign, the Republican National Committee and a PAC set up by Vice President Pence.
During the first four months of 2017, with Trump newly in office, his hotel turned a $1.97 million profit, dramatically beating the company’s own expectations, according to documents posted online by the General Services Administration, which leases the building to Trump’s company. (The GSA under Trump has resisted providing financial information on the hotel, prompting House Democrats to issue a subpoena for it last month.)
The Trump hotel’s occupancy for that time period, which included Trump’s inauguration festivities, was still below that of competitors, but the hotel was charging much higher rates than other hotels, and its revenue was $6 million above the company’s own projections.
Last year — in an indication that the hotel was not living up to original expectations — District of Columbia tax officials agreed to reduce the property’s 2018 assessment by $53.6 million, saving Trump’s company nearly $1 million. Trump received $41 million in income from the property in 2018, according to his financial disclosure form with the government.
More recently, the boost in pro-Trump business hasn’t been enough.
Occupancy this year has been around 57 percent, compared with 75 percent for competitors including the Four Seasons, the Ritz-Carlton and the Hay-Adams, according to an analysis of information in the marketing materials by The Post.
As a result, the hotel has taken in about $20 less per available room than competitors this year, even though the average guest paid about $650 per night to stay there. Real estate experts say that could be an indication that some travelers and groups remain extremely loyal to Trump’s brand, but Democrats and government ethics experts have charged that the hotel’s clients are trying to buy favor with the president.
In three lawsuits wending their way through federal court, plaintiffs argue that Trump has violated the Constitution’s foreign emoluments clause by maintaining ownership of his business and leasing rooms to foreign governments, including Malaysia, Saudi Arabia and Kuwait.
The Trump Organization has donated $340,000 to the U.S. Treasury since Trump took office, money the company says equates to profits it has made from foreign governments. Attorneys for Trump argue that he has not violated the emoluments clause because the payments are market-rate transactions.
Trump leased the property from the government in 2013 and spent an estimated $210 million redeveloping it, using a $170 million loan from Deutsche Bank. The lease stipulates that he may sell his interest, subject to approval by the GSA.
Anu Narayanswamy contributed to this report.