Exclusive: Trump DC hotel sales pitch boasts of millions to be made from foreign governments

The Trump Organization has put together a glossy investor brochure for the Trump International Hotel complete with pictures showcasing the hotel's grandiose architecture, central location and it's ability to capitalize on "government related business." CNN's Brian Todd reports.

Posted: Nov 15, 2019 6:00 AM
Updated: Nov 15, 2019 6:00 AM

In its effort to sell off the lease to the Trump International Hotel in Washington, the Trump Organization has put together a glossy investor brochure complete with pictures showcasing the hotel's grandiose architecture, its central location and its spa's Himalayan salt chamber.

The hotel's biggest selling point though, according to a copy of the brochure seen by CNN, is the one thing that the Trump family insists it didn't take advantage of: profiting off foreign governments.

"Tremendous upside potential exists for a new owner to fully capitalize on government related business upon rebranding of the asset," reads the 46-page investor pitch.

The Trump Organization insists that its refusal to solicit foreign business has cost it more than $9 million. According to the brochure, those "sacrifices" include turning away 17,100 room nights in 2019, resulting in $5.3 million in lost room revenue and $3.9 million in lost food and beverage revenue.

The investor pitch is an explicit acknowledgment of how important foreign business is to the 263-room luxury hotel in the Old Post Office building blocks from the White House.

Though it includes specific numbers of how much money it turned away from foreign governments, the pitch does not include figures for how much the hotel has accepted, despite reports showing it has become a magnet for foreign officials. Nor does it provide actual or historical financial performance data for the hotel, which is named in multiple lawsuits accusing Trump of using the property to illegally profit off his presidency.

Those lawsuits claim Trump has violated the emoluments clause of the US Constitution, which forbids the President from receiving gifts or payments from foreign governments. In its defense, the Trump Organization says that it has voluntarily donated over $340,000 in income it has received from foreign governments to the US Treasury in 2017 and 2018. The President's lawyers have also argued that since his assets have been placed into a trust, he does not directly benefit from the hotel's business.

Instead the materials offer financial projections for years 2020 to 2026 based on a sales and marketing strategy targeting foreign governments.

Trump previously reported in his financial disclosure form that the hotel made $40.8 million in revenues in 2018 and $40.4 million in 2017. The family has never disclosed whether the hotel is profitable.

The Trump Organization did not respond to CNN's requests for comment.

Projected jump in revenue

Nevertheless the company is projecting a whopping 65% jump in revenue from 2018 to 2020. According to the investor pitch, the hotel is estimated to have operating revenues of $67.7 million next year, and $6 million in earnings before interest, taxes, depreciation and amortization minus expenses to keep the hotel updated.

JLL Hotels & Hospitality, the real estate company hired to sell the hotel lease, projects the occupancy rate at the Washington hotel next year will hit 68.3%. That's below other five-star hotels in the area, which JLL estimates will have 74.5% occupancy rates, according to the investor brief.

The investor pitch began circulating in recent weeks after the Trump Organization announced last month that it was exploring the sale of its 60-year lease with the General Services Administration. After signing the lease in 2013, the Trump Organization poured millions of dollars into revamping the Old Post Office building, and opened its doors in October 2016, less than two weeks before Trump won the election.

"People are objecting to us making so much money on the hotel, and therefore we may be willing to sell," Eric Trump said in a statement last month. When Trump became President he did not sell off his assets as previous presidents have, but put the family business into a trust delegating the running of the family business 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 is hoping to get more than $500 million for the property, or about $2 million per room key (the sales price divided by the number of rooms) -- which would be one of the highest prices ever paid for a hotel in Washington.

By contrast the Rosewood Hotel, a luxury five-star property in Georgetown, sold for $1.3 million a room key in 2016.

"It's an extremely high price but the location and the recent renovation of the hotel are going to command a historic value for the Washington, DC, area," said Dan Hawkins, a senior director in hotels and hospitality group of Berkadia, a commercial real estate firm.

A sale is not without complications. The buyer won't own the land since it's leased from GSA, which would also have to approve the sale. The arrangement also raises possible conflicts of interest since Trump is effectively on both sides of the transaction as the seller and the boss of the GSA officials charged with approving a deal.

Some potential buyers have questioned why Trump wouldn't wait until he leaves office to sell the property to avoid debate over whether he sought to benefit from his office. Others have raised ethical concerns that it is overpriced and being marketed to deep pocketed foreign buyers, who may be motivated to curry favor with the President.

When Trump created the trust for his business he also named as ethics adviser Bobby Burchfield, a Washington lawyer, who would have to approve certain transactions, including a sale of the hotel. Under the ethics review, Trump is not permitted to sell to a sovereign wealth fund or to a foreign government. A foreign citizen however would not be immediately disqualified from buying the hotel.

The transaction also has to be determined to be a fair market value with no indication that the counterpart is trying to influence the Trump administration or extract a concession.

Despite the Trump Organization's claims that it turned away millions of dollars in business from foreign governments, the Washington hotel has done brisk business with them. Delegations from Saudi Arabia, Malaysia and Kuwait have stayed at the hotel or held events there, along with members of Trump's cabinet and GOP fundraisers. The Prime Minister of Romania reportedly booked a room earlier this year.

Foreign business is not the only selling point the Trump Organization is highlighting to possible buyers. They're also anticipating a boost to the hotel market from one company the president loves to hate, Amazon, whose CEO Jeff Bezos also owns the Washington Post.

One full page in the 46-page package promotes the benefits that may come from Amazon's decision to build its second headquarters in northern Virginia. JLL projects that Amazon could add 880,000 room nights in seven years, "further driving compression," or full occupancy, "to the lodging sector in Washington DC."

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 46387

Reported Deaths: 2662
CountyConfirmedDeaths
Marion11434680
Lake4985241
Elkhart313343
Allen2695117
St. Joseph185766
Cass16369
Hamilton1502100
Hendricks1371100
Johnson1244118
Porter69037
Tippecanoe6598
Madison64363
Clark62744
Bartholomew58044
Howard55057
LaPorte54125
Kosciusko5003
LaGrange4646
Jackson4583
Vanderburgh4576
Noble45128
Delaware42949
Boone42743
Hancock42535
Marshall4183
Shelby41825
Floyd37044
Morgan32331
Montgomery29020
Grant28726
Clinton2812
Monroe26328
Dubois2616
White25910
Decatur24732
Henry23615
Lawrence23624
Vigo2278
Harrison20822
Warrick20729
Dearborn20622
Greene18432
Miami1802
Jennings16911
Putnam1658
DeKalb1594
Scott1557
Daviess13916
Orange13323
Wayne1296
Franklin1248
Steuben1242
Perry1239
Ripley1148
Jasper1132
Carroll1092
Wabash1092
Fayette967
Newton9610
Whitley814
Randolph774
Starke773
Huntington702
Wells681
Jay670
Fulton661
Jefferson661
Washington651
Knox630
Pulaski621
Clay594
Rush563
Benton480
Adams471
Gibson462
Owen451
Sullivan441
Brown381
Blackford372
Posey360
Spencer331
Tipton301
Crawford290
Fountain292
Switzerland260
Martin220
Parke220
Ohio140
Warren141
Union130
Vermillion130
Pike80
Unassigned0193

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 52865

Reported Deaths: 2876
CountyConfirmedDeaths
Franklin9338407
Cuyahoga7013366
Hamilton5224198
Marion273138
Lucas2628302
Pickaway217641
Summit1969206
Montgomery178426
Mahoning1752228
Butler144844
Columbiana120960
Stark1052112
Lorain96267
Trumbull86362
Warren75721
Clark7399
Belmont53421
Delaware51815
Tuscarawas51510
Fairfield50316
Medina49132
Lake44316
Miami44231
Ashtabula42144
Portage41858
Licking41611
Geauga39042
Wood38451
Clermont3566
Wayne35452
Richland3185
Allen29740
Mercer2728
Darke23625
Erie22922
Greene2229
Holmes2043
Madison1888
Huron1772
Crawford1357
Ottawa13023
Washington12720
Sandusky12213
Morrow1151
Putnam11516
Hardin11312
Ross1092
Auglaize993
Monroe8617
Coshocton811
Jefferson802
Union801
Hancock761
Hocking767
Muskingum731
Preble661
Lawrence650
Williams652
Clinton620
Guernsey603
Shelby594
Logan581
Wyandot584
Fulton570
Ashland551
Brown531
Carroll513
Defiance483
Fayette460
Highland431
Knox391
Champaign381
Athens371
Scioto360
Seneca332
Perry301
Henry290
Van Wert270
Paulding230
Vinton222
Adams211
Pike200
Jackson170
Gallia141
Harrison121
Meigs110
Noble110
Morgan90
Unassigned00
Fort Wayne
Few Clouds
91° wxIcon
Hi: 92° Lo: 69°
Feels Like: 93°
Angola
Clear
86° wxIcon
Hi: 90° Lo: 68°
Feels Like: 88°
Huntington
Broken Clouds
91° wxIcon
Hi: 90° Lo: 68°
Feels Like: 91°
Decatur
Scattered Clouds
91° wxIcon
Hi: 93° Lo: 70°
Feels Like: 91°
Van Wert
Scattered Clouds
91° wxIcon
Hi: 95° Lo: 70°
Feels Like: 91°
Heatwave Continues
WFFT Radar
WFFT Temperatures
WFFT National

Community Events