Trump Hotel Lost Money, Despite Lobbyist Spending, Documents Show
House investigators released data revealing that the hotel in Washington lost $74 million from 2016 to 2020, a figure disputed by the Trump Organization.,
Trump Hotel Lost Money, Despite Lobbyist Spending, Documents Show
House investigators released data revealing that the hotel in Washington lost $74 million from 2016 to 2020, a figure disputed by the Trump Organization.
The Trump International Hotel in Washington became a showcase of special-interest lobbying and maneuvering by allies of President Donald J. Trump to draw his attention or support during his presidency.Credit…Stefani Reynolds for The New York Times
WASHINGTON — Despite all the Republican-paid political events and big bar tabs from lobbyists, foreign dignitaries and other supporters of President Donald J. Trump, the Trump International Hotel in Washington lost an estimated $74 million between 2016 and 2020, according to data released on Friday by House investigators.
The tally came from Mr. Trump’s own auditors, showing losses that generally increased through his tenure in the White House, even as Mr. Trump’s annual financial disclosure reports showed revenues of more than $40 million a year, at least until the pandemic hit.
The new account of revenues and annual losses at the hotel — which is in a federally owned landmark known as the Old Post Office building — was released as House Democrats push the Biden administration to turn over additional documents to determine if Mr. Trump broke federal rules by continuing to operate the hotel through his family while serving as president.
“The documents provided by G.S.A. raise new and troubling questions about former President Trump’s lease,” said a letter sent Friday by the House Oversight and Reform Committee to the General Services Administration, asking for more information.
The materials released by House investigators estimated that the hotel also generated nearly $3.8 million in revenue from foreign government officials during the first three years Mr. Trump was in office, be it hotel stays or meals or other business. The president drew in foreign dignitaries who often liked to be seen at his hotel, at times even meeting with Mr. Trump’s aides at the complex.
Millions more were spent by the Republican National Committee and various election campaigns and other political groups backing Republican candidates, or supporting Mr. Trump’s re-election efforts, Federal Election Commission reports show. During his presidency, the Trump hotel became a showcase of special-interest lobbying and maneuvering by allies of Mr. Trump to draw his attention or support.
Still, the overall message was that the Trump International Hotel, despite all the headlines, is a money-losing operation, said David J. Sangree, an accountant who runs a firm, Hotel & Leisure Advisors, that evaluates hotel industry performance and who looked at the audited reports at the request of The New York Times.
“You would expect a hotel in Washington, D.C., to earn a profit,” he said.
The Trump family often has various ways of counting revenues and losses, for example presenting one set of figures suggesting losses to property tax authorities in an effort to reduce tax bills and giving another to the public that suggests higher returns reflecting well on Mr. Trump’s business acumen.
Prosecutors in New York are already investigating whether Mr. Trump essentially keeps two separate sets of books: one with glowing numbers that banks and insurers received and another bleaker set of data for tax collectors.
Eric Trump, who has helped run the family business since his father started his campaign for president, called the $74 million tally of losses at the hotel between 2016 and 2020 “total nonsense,” since it includes a common accounting exercise that cuts actual business profits by considering the annual depreciation of the value of the property.
The revenues collected from foreign government sources, Eric Trump added, would have been much higher if the Trump family had actively worked to solicit this business. Instead, the company attempted during most of the time Mr. Trump was in office to discourage it, he said.
The Trump family made annual payments to the Treasury for the Trump hotel in Washington — totaling $355,687 between 2017 and 2019 — to attempt to return profits from these sales to foreign government officials. The payments from foreign governments led to accusations in court cases that Mr. Trump was in violation of the so-called emoluments clause of the Constitution, which seeks to bar federal officials from receiving payments from foreign governments.
Eric Trump also disputed a suggestion by the House Oversight Committee that the Trump family had received preferential treatment from Deutsche Bank, which financed the renovation of the Old Post Office building before it reopened as a hotel. The committee questioned why the terms of loan were changed to interest-only payments in 2018, but Eric Trump said the relatively high assessed value of the hotel allowed the company to defer principal payments on the $170 million loan for several years.
“They have written a narrative that is purposely false,” Eric Trump said in an interview Friday. “And they know it is false.”
Former President Trump had filed annual public reports, as required under the law, providing only gross revenues from the hotel, not profits. The information released on Friday includes profitability figures calculated in a number of ways.
Detailed financial reports prepared by Mr. Trump’s auditors, which were also released by the House on Friday, show a total loss of $74 million by including depreciation in the value of the hotel of about $8 million a year.
But even taking out the losses from depreciation, the documents still show that year after year, once taxes, lease payments and rent paid to the federal government are factored in, the hotel still lost money. It just lost less by that standard than by the one highlighted by House Democrats on Friday.
For example, the statement of operations as of August 2018 showed that the losses for the prior year were about $5.3 million, once depreciation was removed, compared with the $13.5 million loss for that year that the House committee said occurred.
Losses in 2019, by this adjusted calculation, would have been $9.6 million, compared with the $17.8 million that the House Democrats cited.
Mr. Sangree said the net income at the Trump hotel in Washington, even after depreciation and interest on the loan is removed from the calculation, is relatively poor compared with other luxury hotels in major cities.
The financial reports released by House investigators provide once-confidential details on the operation of the hotel, showing that it earned an unusually high share of its revenues from its restaurant and bar, compared to its hotel rooms. Each category brought in about $25 million in 2018.
Typically, room revenues are considerably larger than meals and bar service, Mr. Sangree said. But large crowds of lobbyists and friends of Mr. Trump’s gathered almost every night in the Trump hotel lobby while he was president, and were sometimes even greeted by Mr. Trump himself as he arrived at the hotel to have dinner at its steakhouse.
Some allies of Mr. Trump were such frequent patrons of the hotel bar, like Rudolph W. Giuliani, the former New York mayor and personal lawyer to Mr. Trump, that they had tables they considered their own.
Still, the hotel would most likely post much higher profits under a different owner, Mr. Sangree said, because it would no longer be hard to sell to major corporations that have stayed away because of controversies related to Mr. Trump. Management costs at the hotel have also been abnormally high, he said, as a share of revenues.
“This hotel should be doing better,” Mr. Sangree said, noting that the documents released Friday showed an average daily room rate of about $500, which should be high enough to produce considerable profit.
The Trump family has moved twice in recent years to sell the lease it has with the federal government to operate a hotel at the site. Offers are still being considered, after about a dozen bids came in for the property, including from several major national hotel brands, one executive involved in the negotiations said.
With Mr. Trump out of office, the hotel is now much less of a draw among prominent Republican players in Washington. Its lobby now often sits largely empty, as the search for a potential buyer of the lease continues.