Accommodations Associated Press Breaking Business By BERNARD CONDON Condo-hotels Consumer products and services Consumer services Contracts and orders Corporate management Corporate news Florida General news Home buying Hospitality and leisure industry Hotel operators Hotels and resorts Intellectual property Licensing agreements Lifestyle Manhattan Miami Middle East New York New York City North America Outdoor recreation Personnel Recreation and leisure Recreational golf Recreational sports Residential real estate Trademarks Travel United States

Profiting off presidency? Trump biz takes hit since election

Associated Press Photo

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Associated Press Photo

On this Sept. 25, 2018 file photograph, crime scene tape meant to outline boundaries for protesters is strung in entrance of the Trump Worldwide Lodge & Tower throughout a rally towards President Donald Trump’s go to to New York Metropolis. Many believed that the presidency can be a boon to Donald Trump’s enterprise, however two years since he took workplace there’s mounting proof that president’s divisive feedback, which might be so engaging to his political base, have truly harm the Trump model. (AP Photograph/Andres Kudacki, File)

NEW YORK (AP) — When staff pried the Trump identify off one other Manhattan constructing earlier this yr, it capped a nasty few weeks for the president’s companies.

Donald Trump’s golf resorts in Scotland had simply posted tens of millions of dollars in losses, considered one of his motels in Panama had rebranded itself a Marriott, and New York officers introduced they have been wanting into how he prevented paying tens of tens of millions in taxes.

All that, together with the day by day drumbeat of Trump tweets and headlines about investigations into his administration, led Austin, Texas, tech government Gary Barrett to lastly surrender hope of ever turning a revenue on an condominium he purchased as an funding in a Trump tower in Las Vegas.

“People with enough cash to buy these units seem to be shying away from the Trump name,” says Barrett, calling it “the Trump effect.”

From golf charges and licensing offers to costs for Trump condos, many metrics used to gauge his enterprise within the first two years of his presidency are down because the divisive feedback and insurance policies so beloved by his political base have turned off a gaggle simply as pricey to him — the prosperous who gasoline his companies.

“He can be very polarizing. … The brand has been diminished,” says Jeff Lotman, CEO of licensing agency International Icons. New York model advisor Robert Passikoff places it extra bluntly: “The Trump brand has lost its mojo.”

Although it’s troublesome to know simply how badly Trump’s privately held companies are hurting, Related Press interviews with two dozen membership members, apartment consumers and actual property specialists recommend the impression has been broad and sustained, with the identical political divisions amongst voters enjoying out on the hyperlinks and in clubhouses and rental board conferences.

The Trump Group didn’t reply to repeated requests for remark however has stated prior to now its core operations are robust.

From the start, although, there have been indicators that mixing politics and enterprise have been backfiring. It began when Trump introduced his candidacy in 2015, calling some Mexican immigrants crossing the border illegally “rapists,” after which snowballed the subsequent yr following the “Access Hollywood” tape of him boasting about grabbing ladies by the genitals.

Macy’s and Univision severed ties together with his model, mattress maker Serta stopped licensing his identify, NASCAR and the PGA booked occasions that was held at his Doral resort in Miami elsewhere, and the TV community that aired his “Apprentice” — NBC — ended its relationship with him.

Then Trump blamed “both sides” on the neo-Nazi rally in Charlottesville, Virginia, in the summertime of 2017, and greater than a dozen charities and different organizations canceled galas and different events at his Mar-a-Lago membership in Florida. A lodge within the Soho part of Manhattan that had a licensing settlement to make use of his identify took it off its constructing, following a choice by one in Toronto to do the identical.

The revolt has prolonged to new Trump lodge ventures aimed toward those that can’t afford $450 or extra to remain at his big-city inns. Early final yr, the Trump Group introduced the rollout of two chains — one mid-priced, the opposite finances — and stated it had signed letters of intent for potential offers with greater than 20 builders.

At this time, just one deal, in Mississippi, has been introduced. Lodge specialists say potential companions don’t need to cope with the controversy the Trump identify brings.

“In today’s politically charged environment, everyone is cautious,” says Lee Hunter, CEO of consultancy Hunter Lodge Advisors in Atlanta. “You want as many guests staying with you as possible.”

Trump’s condos in New York have taken a hit, too.

An AP evaluation of gross sales knowledge from brokerage CityRealty exhibits costs per sq. foot have fallen in 9 of the 11 Trump-branded buildings in Manhattan within the first 10 months this yr after dropping final yr, too. Since Trump has taken workplace, costs have fallen 9 % on common and at the moment are right down to ranges not seen in 5 years. In that point, Manhattan condos general have risen 29 %.

CityRealty advisor Zach Gutierrez says Trump buildings are struggling partly as a result of they appear dated subsequent to all the brand new luxurious buildings which have gone up in recent times. However he provides that it doesn’t assist that some condo hunters gained’t even think about a Trump constructing now.

“His politics are definitely alienating people,” Gutierrez says.

Ivanka Trump’s enterprise has been hit by the political backlash, too.

The president’s daughter shut down her firm making clothes, footwear, purses and different equipment in July after boycotts towards her model and after retailers reminiscent of Saks Fifth Avenue and Nordstrom determined to drop her line, the latter particularly citing weak gross sales. Her firm stated on the time that enterprise was robust and that the shutdown was triggered by Ivanka’s want to focus extra on her work as a White Home adviser.

Ivanka’s brother Eric Trump is equally optimistic about his father’s 17 golf resorts around the globe, telling the AP earlier this yr that the golf equipment are doing “spectacularly.”

The few public numbers out there recommend in any other case.

Monetary reviews launched by the British and Irish governments in October present two Scottish resorts and one in Eire misplaced tens of millions final yr, the fourth yr in a row of losses. Income at his public course within the Bronx fell 9 % within the first six months of this yr, on prime of a 7 % drop for all of final yr. Income from his Doral golf resort in Miami, which generates the majority of Trump’s golf income, is estimated by Forbes journal to have plunged 26 % final yr.

One other enterprise dealing with hassle: Trump’s “condo-hotel” enterprise, during which individuals on the lookout for revenue purchase lodge rooms in Trump lodges and hand them over to his firm to lease out to friends.

“When I bought, it had to do with the Trump name. It was a respected name,” says Terry Gould, who bought two condos in his Trump’s Vegas tower final yr out of frustration with what he says was the puny revenue from them. “I don’t know what the market sees in it now.”

The Washington Submit says personal paperwork it has seen present revenue to condo-hotel house owners at a New York property dropped 14 % from 2015 to 2017. The newspaper reported an analogous drop at a Trump lodge in Chicago.

Beforehand, Donald Trump Jr. and his brother Eric have stated that new limits their father has positioned on his companies, reminiscent of agreeing to not strike any new enterprise abroad, have certainly slowed deal-making. However they stated that may be the worth to pay for his or her father being president.

To make certain, it hasn’t been all dangerous information. Trump’s companies nonetheless hauled in no less than $453 million in income final yr, based on the president’s monetary disclosure.

His Washington lodge, which took in $40 million of that, is doing a brisk enterprise with Republican Get together officers, lobbyists and enterprise teams that may lose or win huge on modifications in laws and legal guidelines.

Overseas diplomats and dignitaries and teams with ties to the governments of Turkey, Azerbaijan, Saudi Arabia, Kuwait, Bahrain and different nations have held occasions or stayed on the lodge, too. Referring to his determination to throw a celebration there in June, the Philippine ambassador wrote in a newspaper op-ed, “Since several other embassies have also held their national day celebrations at the Trump hotel which were well attended — I decided — why not do it there, too.”

The Trump Group has promised to donate any income tied to overseas governments to the U.S. Treasury to allay conflict-of-interest considerations, and made a cost of $151,470 to the company earlier this yr to cowl 2017. The corporate has declined to offer particulars on how the determine was calculated.

Trump’s summer time White Home at his Bedminster, New Jersey, golf membership — the place he has spent 71 days of his presidency — is benefiting from political spending, too.

A gaggle backing New Jersey Rep. Tom MacArthur’s re-election marketing campaign spent greater than $15,000 on lease and meals for an occasion on the membership, and fellow New Jersey Rep. Daryl Kipnis spent $eight,000 the subsequent yr. Each misplaced within the midterms.

A gaggle supporting the president’s 2020 re-election — Donald J. Trump for President Inc. — spent greater than $50,000 on the membership since he was elected, a part of a $three million spending spree by the group at Trump properties.

Tax dollars spent at Bedminster to place up and feed aides and different help employees for the president’s many stays have helped Trump’s firm, too — a full tally of which has not been made public.

Then there’s all of the untapped alternative overseas after the presidency. Because the election, an AP evaluate of logos around the globe exhibits the president has acquired approval for dozens of logos in China and different nations to arrange new companies and license merchandise.

Larry Chiagouris, a advertising professor at Tempo College, thinks Trump will transfer quick to generate profits off these logos after he leaves workplace, notably in rising markets the place newly rich shoppers are much less involved about his divisive feedback and insurance policies.

“He’ll go to work and put product underneath them and his business will be worth a lot more,” Chiagouris says.

Others are much less optimistic.

Marketing consultant Passikoff has been surveying shopper attitudes towards Trump for 30 years and says his knowledge exhibits the model was so fashionable at one level that Trump might get individuals to pay 30 % greater than they might for rival manufacturers on lodge rooms, steak, bottles of vodka and different items and providers.

“Once you’ve lost the brand value,” he says, “it’s hard to get it back.”


Condon might be reached on Twitter at @BernardFCondon.

About the author