Home / US / Trump DC Hotel sales pitch boasts of being made by millions of foreign governments

Trump DC Hotel sales pitch boasts of being made by millions of foreign governments

According to a copy of CNN's booklet, the biggest selling point of the hotel is what the Trump family insists it was not taking advantage of: benefiting from foreign governments.

"Unbelievable Upside Potential" There is a possibility for a new owner to take full advantage of government-related business after renaming the asset, "he said on a 46-page investor pitch. Sacrifices 17,100 overnight stays in 2019, leading to a loss of $ 5.3 million in revenue and a $ 3.9 million loss in food and beverage sales.

The Investor's Course is an explicit recognition of the importance of It's about the 263-room luxury hotel in the building blocks of the Old Post of the White House.

Although it contains a certain number of funds that have been turned away by foreign governments, the field does not contain any figures about how much the hotel has despite reports accepted that it has become a magnet for foreign officials, there are no actual or historical finan provided with a number of lawsuits in which Trump is accused of using the property to illegally benefit from his presidency.

These lawsuits claim Trump has violated the US Constitution's compensation clause, which prohibits the President from receiving gifts or payments from foreign governments. In his defense, the Trump organization claims to have voluntarily donated over $ 340,000 in revenue received from foreign governments to the US Treasury in 201

7 and 2018. The lawyers of the president have also argued that he has put his assets in a trust does not benefit directly from the hotel business.

Instead, the materials provide financial projections for the years 2020 to 2026 based on a foreign-driven sales and marketing strategy.

Trump previously disclosed in its financial disclosure that the hotel had sales of $ 40.8 million in 2018 and $ 20.4 million in 2017. The family has never disclosed whether the hotel is profitable ,

The Trump organization did not respond to CNN's requests for comments.

Planned jump in sales

Nevertheless, the company expects a From 2018 to 2020 revenue increased by a whopping 65%. Investors estimate the hotel will generate $ 67.7 million in operating income and earnings before interest, taxes, depreciation and amortization of $ 6 million less the expense of maintaining the hotel next year

JLL Hotels & Hospitality, The real estate company commissioned to sell the hotel lease expects the hotel's occupancy in Washington to reach 68.3% next year. This is below the other five-star hotels in the region, which according to estimates by JLL will be 74.5%, according to Investor Brief. Exclusive: Data show that Trump's DC hotel in 2017 was more expensive and emptier than comparable companies. "src-mini =" // cdn.cnn.com/cnnnext/dam/assets/180126170214-trump-international-hotel-dc-small-169.jpg "src-xsmall =" // cdn.cnn.com/cnnnext /dam/assets/180126170214-trump-international-hotel-dc-medium-plus-169.jpg "src-small =" http://cdn.cnn.com/cnnnext/dam/assets/180126170214-trump-international- hotel-dc-large-169.jpg "src-medium =" // cdn.cnn.com/cnnnext/dam/assets/180126170214-trump-international-hotel-dc-exlarge-169.jpg "src-large =" //cdn.cnn.com/cnnnext/dam/assets/180126170214-trump-international-hotel-dc-super-169.jpg "src-full16x9 =" // cdn.cnn.com/cnnnext/dam/assets/180126170214 -trump-international-hotel-dc-full-169.jpg "src-mini1x1 =" // cdn.cnn.com/cnnnext/dam/assets/180126170214-trump-international-hotel-dc-small-11.jpg " data-demand-load = "not-loaded" data-eq-pts = "mini: 0, xsmall: 221, small: 308, medium: 461, large: 781" />

In recent weeks, the investor discussion began after the Trump organization announced last month that it is considering the sale of its 60-year lease with the General Services Administration. After signing the contract in 2013, the Trump organization invested millions of dollars in the renovation of the Old Post Office and opened its doors in October 2016, less than two weeks before Trump won the election.

"People are protesting that we're making so much money with the hotel, so maybe we're ready to sell," Eric Trump said in a statement last month. When Trump became president, he did not sell his fortune like previous presidents, but transferred the family business into a trust that transferred the family business's leadership to his two sons Eric and Don Jr. and other executives.

] $ 500 Million Selling Price

A person familiar with the matter told the Wall Street Journal that the company spent more than $ 500 million on the property or about $ 2 million a year Room Keys Expected (the selling price divided by the number of rooms) – that would be one of the highest prices ever paid for a hotel in Washington.

In contrast, Rosewood Hotel, a luxury five-star hotel in Georgetown, sold $ 1.3 million per room key in 2016.

"It's an extremely high price, but the location and recent refurbishment of the hotel will create a historic value for the Washington, DC region," said Dan Hawkins, senior director at Hotels and Hospitality Group of Berkadia, a commercial real estate companies.

A sale is not without complications. The buyer will not own the property as it was leased by the GSA, which would also have to approve the sale. The agreement also raises potential conflicts of interest, as Trump acts as the seller and head of GSA officials on both sides of the deal, with a mandate to approve a deal.

Some potential buyers have wondered why Trump would not wait until he's finished leaving the office to sell the property to avoid a debate over whether he wants to profit from his office. Others have expressed ethical concerns that it is overpriced and sold to foreign buyers who are deep in their pockets and may be motivated to negotiate with the President.

When Trump founded the Trust for his company, he appointed Bobby Burchfield, a lawyer in Washington, as an ethics consultant who had to approve certain transactions, including a sale of the hotel. After the ethics test, Trump may not sell to a sovereign wealth fund or a foreign government. However, a foreign national would not be immediately excluded from the purchase of the hotel.

The transaction must also be considered fair market value without any indication that the counterpart seeks to influence Trump's administration or obtain a concession.

Despite the Trump organization's claim that it has turned millions of dollars away from foreign governments, the Washington hotel has done good business with them. Delegations from Saudi Arabia, Malaysia and Kuwait have stayed or held events at the hotel, along with members of Trump's Cabinet and GOP fundraiser. The Romanian Prime Minister is said to have booked a room at the beginning of the year.

Foreign trade is not the only selling point that the Trump organization presents to potential buyers. They also expect the hotel market to pick up from a company that the president likes to hate, Amazon, whose CEO Jeff Bezos also owns the Washington Post.

A full page in the 46-page package promotes the benefits that may result from Amazon's decision to build its second headquarters in Northern Virginia. JLL estimates that Amazon could book 880,000 overnight stays in seven years to expand the accommodation business in Washington DC.

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