Here's Why Donald Trump's New DC Hotel May Be a Financial Flop

[demmiblue]

Source: Mother Jones

On Monday, Donald Trump's newest hotel, located in the iconic Old Post Office Pavilion a few blocks from the White House, will open for business. But there already are signs that the $200 million project could face trouble achieving financial success—and that Trump family claims about the project were not accurate.

In 2011, when Trump submitted the winning bid to lease and renovate the historic building, which is owned by the federal government, at least one rival bidder expressed surprise regarding the terms of Trump's offer. Trump proposed a lavish rehab estimated to cost at least $60 million more than other bidders. He also offered the government generous financial terms, under which the Trump Organization would pay annual rent of $3 million, plus a cut of any profits. In a protest filed with the General Services Administration, the government agency overseeing the project, lawyers for a competing development team noted that in order to make the hotel financially viable, Trump would have to charge some of the highest room rates in the city.

"A properly conducted price reasonableness analysis would have resulted in the conclusion that the minimum base lease proposed by Trump would require Trump to obtain hotel room revenues which are simply not obtainable in this location based on the concepts for the redevelopment," the lawyers asserted.

After the project was awarded to Trump, a Washington Post columnist calculated that Trump's new hotel might have to charge average rates of as much as $750 per night. At the time, Ivanka Trump responded angrily that "his numbers are pure speculation and, simply put, wrong."

Yet it was Ivanka who was wrong. On weeknights this fall, the hotel's least expensive rooms will go for between $735 and $995 a night. On many days, the hotel is as expensive or more so than the Four Seasons. (Ivanka Trump had said that Trump Organization originally aimed to have lower rates than this high-end hotel.) And it's not at all clear whether Trump's hotel can command such steep rates in a market already crowded with luxury hotels—especially because Trump's hotel will lack some of the amenities initially promised.

Read more: http://www.motherjones.com/politics/2016/09/donald-trumps-old-post-office-hotel-financial-flop

Sounds like the project is pretty much guaranteed to fail.

[Orangepeel]

1. What a metaphor!

[liberal N proud]

2. Trump will just declare another bankruptcy

And not pay the contractors or employees.

[annabanana]

11. He's probably already figured out how to not pay the lease . .

Who's gonna get OUR money back for US?

[matt819]

3. A must read story (nt)

[demmiblue]

5. It is very interesting.

I knew about the chefs/restaurateurs backing out, but I didn't know that he is now forced to host a chain restaurant because of his arseholeness! That is going to make a big negative impact.

[greymattermom]

4. I hope what they did to the building is ok

and I wonder if the rooms will be listed on hotwire.com.

[tanyev]

6. A new Trump hotel in D.C.? How conveeeenient.

Why, he could live in a gilded penthouse suite there instead of that tacky old house all the other presidents have lived in. He could move all the state dinners there and have them catered by Trump catering and serve Trump steaks and Trump wines. He could have all his press conferences and interviews there and require media to have a hotel reservation to get access.

The really scary part is I can easily imagine him trying this.

[Gothmog]

7. Great article-Trump is bad a business and this project will likely collapse

I love the fact that the Top Chefs will not touch a trump facility

[erpowers]

8. Par For the Course

I am beginning to think the Trump family needs to be in jail. This is not the first time they have pulled this stunt. They at least did something similar in Mexico. Ivanka Trump claimed up an down that her father, Donald Trump, was running the project and had total control. When the project went south and investors began to lose money she changed her tune and began claiming someone had improperly used her family's name and the Trump family had never been involved in the project. She said this even though there was video evidence of her previous statement.

[Gothmog]

9. I was just polled by Gallop and was asked if I read anything today about Trump

I discussed this article in detailed including spelling the name of one of the chefs and the guy from Top Chef who turned Trump down

[demmiblue]

10. Good for you!

Trump is nothing but a grifter.

[Paladin]

12. Plenty of other nice hotels in D.C.

I will sleep on the streets before a Trump establishment ever sees a dollar from me.