With the General Services Administration publishing on August 10 that the Trump International Hotel in Washington, D.C., recorded a US$1.97 million profit for the first four months of 2017, HOTELS reached out to Trump’s D.C. luxury competitors to get their perspectives.
According to the GSA, which is the property’s leaseholder and receives a monthly report about the hotel’s forecast and actual results, Trump Hotels’ D.C. hotel recorded very strong results based on an average rate of US$652.98 (further buoyed by US$8.2 million in F&B business), yet an average occupancy of 42.3%. The GSA later that day pulled the Trump performance data from its website, stating it was posted by mistake, but local hoteliers did take notice.
With rate reportedly beating projections by 57% and F&B running 37.2% above budget, one local GM’s first response was “no way it happened.” But, he added, “As I thought about it there is no question the first few months of the year were very busy with the presidential transition team already in the hotel. So I am sure occupancy was through the roof – but at what rate and who was paying, I have no idea. Even so, I have never heard of a hotel doing that level of profit in the first three months. At the very least, I would be very surprised if that was net profit.”
Another local hotelier said the claim of running a US$652.98 average rate for the time stated with an occupancy of 42.3% leaves the property in a rather delicate state with RevPAR of US$276.21.
If the Trump hotel in D.C. is beating projection by 57%, as stated by the Trump Hotels team, their initial projections must have anticipated lesser margins than actually realized, one of HOTELS sources added.
When HOTELS reached out to the Trump Hotel Group to verify the reported data, it said it would not provide comments. However, CEO Eric Danziger did say, “Since the property’s official opening, both awareness and bookings continue to grow. We are very happy with the response we have received from both the business and leisure markets as well as the warm reception from the travel industry and the local community. We are very pleased with the performance of the hotel and we are very proud to have elevated the luxury standard in D.C.”
Of course, the Trump hotel in D.C. benefited from big rates during inauguration week and even more so as it has a lot of suites (including one that seats 30 for dinner), but a competing hotelier added, “Trump would have had to get top dollar for those suites, and beyond that I just don’t see it (the US$653 average rate across four months). If the data is correct, they are off to a very good start. The biggest question going forward is if they can sustain it.”
At the same time, one of HOTELS local sources added that the Trump hotel does not take same-day reservations, which also limits their opportunities to grow occupancy.
When asked if the Trump hotel in D.C. has an unfair advantage over its competition due to ownership’s connection to President Donald Trump, one luxury hotelkeeper said “not at all.” He added, “If anything, the brouhaha actually helps us. Corporate guests have told us they were approached with a rate in US$200s, but our customers say they are not moving. We are far more personal and individual. People who go there do so to be seen, and they come to us because they don’t want to be seen.”
The same competing hotelier said he is not making any changes based on the news about Trump’s early success, but added, “I know others are pushing catering and group business and likely have felt more of an impact than we have.”