‘Special Room’
The suite Ivanka chose to carry her name is a duplex in the building’s clock tower with views up and down Pennsylvania Avenue and a circular wrought-iron staircase leading to a library. It has a different color palette -- “just a very special room,’’ she said.
David Bernand, general manager of the Four Seasons hotel in Washington, the current rate leader in the market, said the new Trump property will boost the cachet of the city as a luxury destination and provide some tough competition.
“If there’s one thing they’ve been good at doing, it’s to sustain their rates -- they may do that at the expense of occupancy at times,’’ a strategy followed by many high-end hotels, including the Four Seasons, said Bernand. “If you have a luxury product, it’s important to not drop your prices when quality remains the same, despite the demand.’’
After Inauguration
It’s hard to predict how the hotel will perform after the inauguration, especially if Trump loses. Conventions such as the spring and fall meetings of the International Monetary Fund and World Bank, are big draws, as is the Fourth of July. Washington had a record number of visitors last year, yet the city, unlike London or Paris, isn’t its country’s center of finance or its main tourist destination. And with 900 new luxury rooms coming on the market, including Trump’s, the competition will be fierce. One plus: Demand for big suites, often for long-term stays, is high.
If Trump is elected president, he will have to address questions about conflict of interest in any negotiations between his family and the General Services Administration, the federal agency that in 2012 awarded Trump a 60-year ground lease, with potential for two renewals of 20 years each. The GSA said it would answer those questions after the election.
Trump will probably place the Trump Organization in a blind trust if he’s elected, and his three grown children from his first marriage would run it, a spokeswoman for the company said in an e-mail. “Mr. Trump would not be involved,’’ she said, declining to comment on how potential conflicts would be handled.
One person who’s familiar with Trump’s history in the hotel business is Tom Barrack, chairman of Colony Capital Inc. and a supporter of the Republican candidate. Barrack exited as a partner in the Washington hotel in 2013 because the project’s timeline became “too long for the firm,” he said in a statement. “As the project became more evolved, cheaper sources of capital for longer-term investment became available to Trump.”
Barrack represented billionaire Robert Bass in 1988 when Bass sold New York’s Plaza Hotel to Trump. Revenue increased and Trump won praise for the hotel’s new interiors, but renovation and interest costs ate into performance. When the economy weakened, Trump lost the hotel in 1992 as part of a restructuring of $900 million of loans tied to various deals. He and Ivana, Ivanka’s mother, divorced the same year.
This article was provided by Bloomberg News.