JLL Marketing Materials For Trump D.C. Hotel Reveal Below-Market Occupancy
The Trump Organization last month retained JLL to seek buyers for its D.C. hotel, and marketing materials reportedly show the hotel has lagged behind its competition.
A JLL marketing brochure revealed the 263-room Trump International Hotel on Pennsylvania Avenue has experienced around 57% occupancy this year, compared with 75% for competing high-end hotels, the Washington Post reports.
The average guest paid about $650 per night to stay at the hotel, but its revenue per available room was $20 less than competitors, including the Four Seasons, Ritz-Carlton and Hay-Adams, the Post reports.
The marketing materials claim the hotel has had lower occupancy because it has refused to solicit business from foreign governments, CNN reports. The brochure said it turned away 17,000 room nights in 2019, resulting in over $5M of lost room revenue. But the hotel has done business with some foreign governments, including those of Saudi Arabia, Kuwait and Malaysia, CNN reports.
The hotel, a redevelopment of the Old Post Office Building, opened in September 2016, two months before its owner was elected president.
President Donald Trump declined to divest himself from his business upon taking office, and the company has faced several lawsuits and investigations over foreign payments to the hotel that could violate the constitution's emoluments clause.
The potential for a new owner of the hotel to do more business with foreign governments was highlighted as a primary selling point in the marketing materials, CNN reports. The company is seeking to sell the hotel for over $500M, or roughly $2M per room, the Wall Street Journal reported last month.
Savills Executive Managing Director Marc Magazine, a D.C.-area hospitality broker with no involvement in this deal, said the $500M target seemed high, partially because the sale would not include the land. The Trump Organization ground leases the property from the federal government, an arrangement he said creates a "distraction" for potential buyers.
Magazine said a realistic comparison for the deal would be the 2016 sale of Georgetown's Rosewood hotel, which traded for about $1.3M per room. That price-per-room would equate to about $342M for the Trump hotel.
"It will certainly sell for a high number," Magazine said. "I don't know if they'll get the $500M number, but they'll get a big number."