What lies ahead for the Trump Hotel in DC?

H&LA’s David Sangree was asked to weigh in on Bloomberg article about the future of the Trump Hotel in DC as the new Biden administration takes over.

Trump’s D.C. Hotel Enters Biden Era With Brand in Tumult

Since opening in 2016, the Trump International Hotel in Washington has played a supporting role in the nation’s political drama, hosting lobbyists, right-wing media figures and others trying to win favor with the U.S. president.

Now the property, whose grand design and proximity to the White House stand out among the city’s luxury hotels, is entering the post-Trump presidential era with the Biden administration as its new landlord and questions about its future.

The family could seek to sell the hotel again, or use it as a home base for the next steps in its political ambitions. But Donald Trump’s post-presidency will be the first test of how the property can fare without the allure of being tied to the most powerful person in America.

During the last four years, the hotel was an unofficial White House lounge, a place where top aides and donors gathered for meetings. Trump attended Stephen Miller’s wedding there, and it was his go-to dining spot in Washington for steak with ketchup.

Going forward, it remains to be seen how many of Trump’s supporters can stomach $1,000-a-night suites and $35 cocktails, while his name is increasingly toxic to a broad swath of the population after the Capitol riots capped four years of tumult.

“The old real estate maxim ‘location, location, location’ still holds, but the brand has been so tarnished from a consumer point of view,” said Robert Passikoff, president of Brand Keys Inc., a research consultancy.

The Trump Organization, in a statement, said the property attracted bids “north of $350 million” that it rejected in full. Such a price would still be the most expensive paid for a hotel in the city, the company said.

“We are confident that Trump International will remain one of the most preeminent luxury hotels in the world for a very long time,” the company said.

The Trump Organization operates the hotel under a 60-year lease from the federal government — making the Biden administration its new landlord. The company won the deal to redevelop the Old Post Office in 2012 and spent $212 million on the makeover, building a sprawling lobby under a glassed-over atrium that management refers to as “America’s Living Room.”

The restoration was widely admired, but the family’s decision to hold on to the building was not. The hotel was at the center of at least two lawsuits accusing the president of violating the emoluments clause of the U.S. Constitution, which bars presidents from receiving gifts or payments from foreign governments.

The Trump International became a point of controversy for companies such as such as T-Mobile US Inc., which had several top executives check in there the day after announcing a merger with Sprint Corp. that required government review. The property also been popular with emissaries of foreign governments, including Kuwait, the Philippines, and Saudi Arabia — whose lobbyists paid for 500 nights within a month of Trump’s election, according to the Washington Post.

One question is how a federal government controlled by the Democratic Party will behave as landlord to a political opponent who spent the last two months rallying supporters around the idea President-elect Joe Biden’s win was illegitimate.

In New York, the city government canceled about $17 million in contracts with the Trump Organization, arguing that the deals could by voided because the president broke the law by inciting insurrection against the U.S. government.

Even if a Biden Administration plays nice, it’s unclear how the opulent hotel will fit in a company whose audience has changed in recent years. For decades, the Trump brand has been about aspirational luxury. These days, his backing rests more on blue-collar supporters.

Still, Trump has a fervent base and attracted 74 million voters in the election, making it possible the hotel remains a haven for conservative visitors to Washington. The building is in a prime location, and if the family does plan to sell, the universe of potential buyers would probably increase to include foreign purchasers once Trump’s exit from office removes a potential conflict.

“That hotel is a prime asset, and it’s a beautiful property,” said David J. Sangree, president of Cleveland-based Hotel & Leisure Advisors. “I’m sure a number of people will still be interested because the facility is so nice.”

Any deal would likely be far below the initial asking price, which represented roughly $2 million per room. That would have been nearly double the $1.1 million that Four Seasons in Washington commanded in a 2019 deal that was eventually terminated as the pandemic squelched travel.

Washington hotels reported occupancy rates of 38% through the first 11 months of last year, down from 72% in 2019, according to lodging data firm STR.

For now, the Trump International is operating through the pandemic and is open this week as Washington prepares for the Biden inauguration — and potential unrest. Guests rooms for the inauguration started at $2,225. One area that remains closed, managing director Mickael Damelincourt tweeted this week, is America’s Living Room.