Trump businesses see sharp revenue decline at key properties

Photo: Reuters
Photo: Reuters

Summary

Pandemic-related financial challenges facing former president could intensify as clients seek to cut ties

Former President Donald Trump saw sharp revenue declines across his family businesses last year as the Covid-19 pandemic took a steep toll on the Trump Organization’s hotels and golf resorts, a marker of the many financial challenges Mr. Trump faces after leaving the White House.

Newly released data from the Office of Government Ethics shows that the minimum revenue generated by Mr. Trump’s businesses fell by nearly 40% from a year earlier, and declined even more at some of the company’s most lucrative properties.

The issues facing the Trump Organization are likely to get worse in the coming months. Some of the business’s partners and clients said they would cut ties to Mr. Trump after his supporters stormed the Capitol in an effort to overturn President Biden’s election win.

Eric Trump, who has been running the Trump Organization since his father took the White House, said in an interview Thursday that the family business was in strong financial shape.

“I have 75 million people who would follow my father to the ends of the Earth," he said. “He’s got probably the most famous brand in the world. The opportunities for somebody like that are going to be endless."

The disclosure, which covers 2020 and the first few weeks of 2021, shows business plunging at key Trump Organization properties. The Trump International Hotel in Washington, D.C., saw revenue fall to around $15 million compared with more than $40 million in 2019. The Trump National Doral Miami golf resort posted revenue of about $44 million, down over 40% compared with 2019.

Eric Trump attributed falling revenues at some properties to government pandemic measures that have stymied travel and hurt hotel operators across the country.

“You can take costs down proportionally with revenues and we did so, very, very early in the pandemic," he said, adding that the Trump Organization’s golf properties performed strongly as customers sought outdoor activities during the pandemic.

Eric Trump said the Trump Organization was profitable overall in 2020 but declined to provide details.

The latest disclosure is the first data to indicate the impact of Covid-19. It shows Mr. Trump’s businesses taking in at least $278 million over the reporting period, down from at least $446 million in 2019.

It is still unknown what role Mr. Trump will play at his businesses. People who know the family have been divided in recent months over how hands-on the former president would be after leaving office.

Besides the revenue falloff due to the pandemic, the Trump Organization has to contend with a substantial debt load. It has more than $400 million of loans coming due in the next few years, and refinancing the debt could be a challenge, particularly as once-loyal lenders to the Trump Organization such as Deutsche Bank AG seek to distance themselves from the former president.

Much of the company’s debt sits on the Washington hotel and the Doral, so turning them around is important. Eric Trump said the company’s debt load is small relative to its assets.

While the Trump businesses declined overall, there were some bright spots. Most notably, revenue at the president’s Mar-a-Lago club in Florida rose 13% to more than $24 million in the latest period.

The new data doesn’t capture the full impact of a backlash sparked by the Jan. 6 riot in Washington, which has alienated Mr. Trump from much of corporate America and led to his second impeachment by the House of Representatives.

Some law firms have ended their relationships with the Trump Organization. On Thursday, Morgan, Lewis & Bockius, which has represented the company in a New York state investigation, said it would stop working with the organization. The firm didn’t give a reason.

Since the riot, the PGA of America said it was terminating an agreement to hold its 2022 PGA Championship at a Trump-owned golf course in New Jersey. Events like that can boost the visibility of high-end courses. Bill de Blasio, New York City’s Democratic mayor, said the city was canceling agreements with the Trump Organization to operate a golf course, carousel and ice-skating rinks in the city.

A bigger threat for the company would be commercial tenants seeking to vacate their leases at Trump-owned skyscrapers in New York and San Francisco. The Girl Scouts of Greater New York recently said it was exploring its options to get out of a lease at Mr. Trump’s 40 Wall Street office tower. Several other tenants have declined to comment or not responded to questions about their leases at Trump properties.

The Trump Organization has said it believes the PGA is in breach of its contract and that it would also fight the decision by New York City. It hasn’t commented about the Girl Scouts.

This story has been published from a wire agency feed without modifications to the text.

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