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Like Its Namesake, the Trump Brand Barometer Swings Up and Down

Although solid information is hard to find, it’s clear Trump’s D.C. hotel is doing well, while his club in Palm Beach has just taken a major hit.

August 25, 2017

The views expressed are the author’s own and not necessarily those of the Brennan Center for Justice

Ever since Donald Trump declared his candidacy, there has been much speculation about what his political sojourn will mean for the value of the Trump brand. I’ve been trying to get an answers to this question, but hard numbers are hard to come by because of the opaqueness of the Trump Organization. No doubt an accountant or two housed in New York’s Trump Tower could say to the penny whichparts of the business are suffering and which are thriving. Here’s what I can tell from the outside:

On the up side for the Trump brand, the Trump International Hotel in Washington, D.C. is doing better than anticipated. The Trump D.C. Hotel has been a subject of consternation for ethics watchdogs because the lease of the building is on federal property. If you want a full breakdown of the saga over whether the Trumps are or are not violating the federal lease, see this staff report prepared for Rep. Peter DeFazio (D-Ore.), the ranking member of the Committee on Transportation and Infrastructure.

The President’s interest in the Trump D.C. hotel has also raised constitutional issues because foreign government delegations paying for rooms could be deemed an “emolument” under the U.S. Constitution. If they are foreign emoluments, then President Trump needs permission from Congress to keep them. Congress has granted no such permission. There are several on-going lawsuits arguing that President Trump has already run afoul of this part of the Constitution.

Because an un-redacted document posted inadvertently by the General Services Administration, the public had a brief glimpse at the profitability of the Trump D.C. hotel. The GSA later removed the document from its website. What the public wasn’t supposed to see was that that the Trump D.C. hotel had a $2 million profit from January through July 2017, although projections called for it to have a $2 million loss. The $4 million swing was the result of the hotel’s high-priced room rates.   

According to the Washington Post, “Driving the profits are the extraordinary prices guests have been willing to pay for rooms, including members of Trump’s Cabinet who have stayed or lived there, as well as big spending on food and beverages in the meeting areas, bar and restaurant — spots frequented by members of Trump’s inner circle and other Republican leaders.” Remember when President Trump said he didn’t want a poor person in his cabinet? Maybe that’s because a poor cabinet member could not afford the average of $652.98 a night at his joint.

What the public doesn’t know is how much of the D.C. hotel’s profit is derived from guests who are from foreign governments. The Trump Organization has claimed that it will donate profits from foreign governments to the U.S. treasury to avoid the foreign emoluments problem, but they won’t start these payments until next year. Moreover, it’s unclear just how the Trump Organization is tracking the “foreign-ness” of its income or profits. But at least from a profitability stand point, the negatives that could tarnish the Trump brand have not stopped the D.C. hotel from prospering so far this year.

But Trump’s brand barometer has taken a nosedive at his Palm Beach club, Mar-a-Lago in the past two weeks. As of this writing, 18 charities, ranging from the American Cancer Society to the American Red Cross to the Salvation Army have cancelled their winter galas at the club. Mar-a-Lago can earn as much as $275,000 for a single event. The Washington Post  estimates the club’s lost revenue is at least $1.1 million.

All of this is fallout from Trump’s statements about the unrest in Charlottesville, Va.. especially his notorious Trump Tower press conference August 15th in which he said there were “fine” people among white supremacists. Seventy-two hours later the American Red Cross cancelled, noting in a statement that Mar-a-Lago “has increasingly become a source of controversy and pain for many of our volunteers, employees and supporters.”  

For the Cleveland Clinic, one of the nation’s leading academic medical centers, trouble was brewing even before Trump’s press conference. Although the hospital was a longtime Mar-a-Lago customer, this year’s event provoked a July letter signed by 1,600 of the clinic’s health professionals that said the booking “symbolically and financially supports a politician actively working to decrease access to healthcare.” Although the clinic initially said it would go forward with the event notwithstanding the petition, Trump’s press conference was a step too far. All the clinic would say is that there “were a variety of factors” behind the cancellation and would not elaborate.

The value of Trump’s brand may depend on whether you are in D.C. lobbying the government or in Palm Beach raising money for charity. But one thing is sure. It’s not all good news for the Trump brand seven months into his presidency. Some of the news is downright bleak. So we know the D.C. hotel is up $2 million. What’s less clear is if that profit is wiped out by Florida’s fleeing philanthropists.