For Trump, It’s Business As Usual
Donald Trump’s statements about Muslims and Latinos have drawn widespread rebuke from politicians in both parties and many other national leaders.
But the companies that do business with Trump have generally remained silent in the face of those polarizing remarks, and so far there’s little evidence that his businesses are suffering substantially as a result of his candidacy. Sales of his condominiums in New York appear normal, and there’s no public evidence his golf courses and hotels have been significantly affected. Personally, he’s seeing a surge in book sales.
The overall resiliency of Trump’s businesses may be a reason that he feels empowered to stake out controversial positions — such as last week’s call to temporarily ban Muslims from entering the United States — without suffering financially.
Longer term, however, Trump could face problems. There have already been several worrisome harbingers for the Republican presidential candidate. Last week, a major retailer in the Middle East cut ties with him. Canadian politicians have warned developers they could lose business if they don’t terminate a real estate deal with the mogul.
That followed decisions earlier this year by NBC and Macy’s to stop doing business with Trump, while the city of New York has said it will go out of its way to avoid dealing with the businessman.
“I think we’re going to have to explore how much baggage this all entails,” said Jim Dinegar, president of the Greater Washington Board of Trade, who will decide whether to hold events at Trump’s new hotel on the site of the Old Post Office Pavilion that is scheduled to open next year in the District.
“I get very wary of litmus tests because once you pull that thread, you can pull a whole lot of threads in terms of who owns this and who has an investment in that.”
In one sign of the durability of the Trump brand, his name was ripped off a golf course and housing complex in Dubai last week after his comments on banning Muslims. It was rapidly put back up, and the operator of the golf course released a glowing statement of solidarity. “We would like to stress that our agreement is with the Trump Organization as one of the premium golf course operators in the world,” said Niall McLoughlin, a senior vice president at Damac Properties.
In a statement, a Trump organization spokeswoman said the company’s real estate, golf and hotel properties were having banner years. “Trump Properties are performing incredibly well both here in the U.S. and abroad,” she said.
Trump’s business success rests on his continued ability to attract customers — players to his golf courses, travelers to his resorts, trade groups to his hotel conference facilities, buyers for the condominium units sold under his name.
Visitors and prospective tenants pay a premium to stay or live in Trump properties, and Trump licenses his name to developers for millions of dollars for use on new buildings, even when he does not personally hold an interest in them.
By running for president, Trump has garnered what amounts to millions of dollars in free publicity from television networks alone. But the comments that draw him such wide viewership have also cost him some business opportunities.
“There’s that saying, there’s no such thing as bad publicity,” said Neal A. Hartman, a business expert at the MIT Sloan School of Management. “But I think, in this case, that may not necessarily be true.”
After Trump called some Mexican immigrants “rapists” in the summer, NBC and Macy’s ended their business relationships with him. That didn’t stop him from getting more publicity, though — NBC’s Saturday Night Live later invited him to host an episode.
Over the past week, Trump faced a backlash from business interests in the Middle East over his proposal to turn away Muslims from entry to America as a security measure.
Lifestyle, one of the Persian Gulf region’s biggest home-retail chains, said it would stop selling “Trump Home” goods in its more than 170 stores across Kuwait, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates.
Landmark Group, the chain’s Dubai-based owner, launched the deal this year selling Trump-branded products to the area’s “style-conscious consumers.” The collection included Trump Home lotion dispensers, tables, mother-of-pearl bath accessories, lighting, decorative mirrors and leather jewelry boxes.
“As one of the most popular home-decor brands in the Middle East, Lifestyle values and respects the sentiments of all its customers,” Lifestyle chief executive Sachin Mundhwa said. “In light of the recent statements made by the presidential candidate in the U.S. media, we have suspended sale of all products from the Trump Home decor range.”
Trump’s controversial proposal could also complicate Trump’s Old Post Office project in the District, which had already run into difficulties from his immigrant comments. Construction is on schedule for a late 2016 opening of Trump’s hotel at the Old Post Office Pavilion, on Pennsylvania Avenue between the White House and Capitol, in time for the inaugural parade to proceed out front and for the hotel to host balls and guests in January 2017.
Trump and his daughter Ivanka touted the signing of chefs Jose Andres and Geoffrey Zakarian, but they backed out of their leases after Trump’s comments about Mexican immigrants, prompting lawsuits from the presidential candidate. The Trumps announced that BLT Prime, owned by Esquared Hospitality, would take Andres’s spot but haven’t announced a restaurant for the second opening.
Elliott L. Ferguson II, president and chief executive of the District’s marketing arm, Destination D.C., said there is no sign that the new hotel has taken a hit from the campaign remarks in booking guests and events.
Ferguson said that when he fields requests for meeting space or hotel rooms, planners will occasionally have stipulations about ownership, such as requiring a hotel that uses unionized labor. But Ferguson said he had not received any requests that specified not going to a Trump hotel.
“Quite frankly, there will be a different story by the time the hotel opens, in terms of the election of a new president of the United States,” Ferguson said. “I expect that the climate at that time will be different.”
Mickael Damelincourt, managing director of Trump’s $200 million hotel project in the District Old Post Office Pavilion, said this was his fifth hotel project, but he had never seen so much advance interest.
“Despite the fact that we are not opening until next year, we already have a significant amount of weddings and large group events confirmed for 2016 and beyond,” he said.
Many of Trump’s business partners would not comment for this story. Calls to two architecture firms that worked on Trump’s Chicago tower — Adrian Smith and Gordon Gill as well as Skidmore, Owings & Merrill — went unreturned. Deutsche Bank, which is lending Trump three-quarters of the money needed to build the Old Post Office, declined to comment about whether it would continue to work with him, as did Esquared.
The head of the Retirement Industry Trust Association, a trade group that held a conference at the Trump Hotel in Las Vegas in October, also declined comment. A spokeswoman for Visit Loudoun, the group that promotes tourism and the economy in the northern Virginia county where Trump operates a golf club, declined to say whether his comments have had or might still have an effect on club membership or the venue’s business.
In the New York City market, Trump also seems to have avoided any substantial fallout. Data show that prices of Trump-branded condominiums in New York City, home to the majority of his portfolio, haven’t budged.
A review of sales at 16 Trump condo buildings before and after his campaign by the data firm StreetEasy found that sale prices have maintained their place in the lower tier of Manhattan luxury units, data scientist Alan Lightfeldt said.
“Buying a Trump tie could be a make-or-break decision based on his candidacy. It’s a small investment,” Lightfeldt said. “Buying a multimillion-dollar condo, I think there are a lot of very complicated factors that go into that decision.”
One complicating factor for the Trump business equation: It may not be easy to break up with Trump, even if his associates want to.
Trump, for instance, has run a handful of New York landmarks for years, including ice skating rinks in Central Park and a golf course in the Bronx. In light of Trump’s immigrant comments in the summer, Mayor Bill de Blasio said the city would review those contracts.
In a statement, de Blasio’s office said the city found no legal way to cancel these contracts, adding: “In the future, however, the mayor said he would not go out of his way to do any business with Mr. Trump.” Trump’s contract to run the Central Park Carousel expires in 2021, while his deal for the Central Park skating rink doesn’t end until 2035.
In Canada, public officials have taken aim at Trump hotels, but faced pushback from the developers. On Tuesday, a Toronto official wrote the owner of a Trump-managed hotel — the second-tallest building in Canada — asking that the Trump signs come down. Vancouver Councillor Kerry Jang said on Wednesday that while the Trump name was once a standard of luxury, it “will forever be synonymous with intolerance, bigotry and discrimination.”
But the building’s owner, Talon International Development, issued a statement saying that Trump’s “opinions as a private citizen in no way reflect the position of the company’s views or those of its other investors and owners.”
Joo Kim Tiah, chief executive of developer Holborn, said the project would create 300 jobs and that his firm wasn’t involved in U.S. politics. “As such, we would not comment further on Mr. Trump’s personal or political agenda, nor any political issues, local or foreign,” he said.