* Keep in mind that this was happening at the same time that Chicago hotels were booming…
Profits [at the Trump International Hotel & Tower Chicago] fell 89 percent from 2015 to 2018, from $16.7 million to $1.8 million, according to documents filed with Cook County, Ill. Trump’s hotel struggled even as other Chicago hotels held steady or thrived.
“Performance of [the Trump hotel] is clearly disassociated from that of its competitive set,” the company’s lawyers said in a letter to the county seeking to lower the hotel’s taxes.
The lawyers said the problem was a reaction to Trump’s politics. They even quoted a line from a 2018 Washington Post article, in which one small-time investor described the effect of Trump’s candidacy on his buildings thusly: “Then the Embarrassment came.”
Trump International Hotel & Tower Chicago, which prides itself on indulgent luxury, is trying to keep up by cutting costs. In a presentation to investors, obtained by The Post, the company described leaving jobs open, cutting back on gifts for high rollers and children, and buying cheaper housekeeping supplies.
* More…
* And things are about to get worse as the market has become overly saturated…
Struggling to keep up with a glut of new rooms across the city, Chicago hoteliers faced January’s polar vortex, a cyclical downturn in convention business, lower rates, lower occupancy and at least one high-profile default in 2019.
“There’s no doubt 2019 has been a challenging year for all hotels,” said John Rutledge, CEO of Chicago-based Oxford Development, which has developed 10 hotels in Chicago, including LondonHouse, The Langham and The Godfrey. “It’s time to take a breath and absorb some of that new product.” […]
But demand has not kept pace with supply. After a record year in 2018, hotel occupancy has fallen under 75% through September — a 2.5% year-over-year decline, according to data from research firm STR supplied by Choose Chicago.
Meanwhile, the average daily room rate in Chicago has dropped 3.2% to $205.74, according to STR data. Revenue per available room — a key measure of profitability — is down 5.6% to $153.41.
- DailyDouble - Thursday, Nov 7, 19 @ 10:49 am:
Rich’s TDS on display as usual.
- Lucky Pierre - Thursday, Nov 7, 19 @ 10:50 am:
So much for the emoluments clause argument as a reason for impeachment.
No surprise the hotels are doing worse than before he was elected
Trump was always a tough sell in Chicago, even when he was a registered Democrat
- Rich Miller - Thursday, Nov 7, 19 @ 10:51 am:
OK, boomer.
- Jocko - Thursday, Nov 7, 19 @ 10:53 am:
Cook county should keep in mind that, according to ProPublica, Trump isn’t the most honest property tax filer.
https://tinyurl.com/y4gbgo9l
- Bruce( no not him) - Thursday, Nov 7, 19 @ 10:56 am:
Nothing to see here. Fake news. /s
- efudd - Thursday, Nov 7, 19 @ 10:57 am:
LP, yeah, go with that.
Sorry to hear this for the employees of this hotel, especially those whose incomes rely heavily on tips.
Average daily rate in Chicago a little over two hundred? I’ve paid more than half of that for hotel rooms in burgs a fraction the size of Chicago.
- Chicago Cynic - Thursday, Nov 7, 19 @ 11:00 am:
“Rich’s TDS on display as usual.”
They’re just facts, DailyDouble. Not sure how that’s evidence of TDS. I guess you might say that would be customers of the hotel have TDS since they’re the ones who aren’t visiting.
And LP, the emoluments case never had anything to do with Chicago. It’s all about DC and other places like Turnberry. So that’s just a silly drive-by.
- Birdseed - Thursday, Nov 7, 19 @ 11:07 am:
So the hotel made $1.8 million profit. Better than a kick in the teeth.
- Thomas Paine - Thursday, Nov 7, 19 @ 11:08 am:
For heaven’s sake, sounds like all they have to do is take the sign down and take his name off of the hotel and they will not have a problem any more.
There is a reason that Comcast rebranded everything under the product name Xfinity.
I don’t think we should give someone a tax break for wrecking their own brand or being too numbskulled or stubborn to fix it.
Maybe Rich can help them out with a QOTD “What should it be renamed?”
- Lucky Pierre - Thursday, Nov 7, 19 @ 11:08 am:
Do you really think Trump’s hotels are better off now than they were in 2016?
Being President has hurt the value of his properties not helped.
Maybe you missed all the residential building that want to remove the Trump name but are contractually obligated to keep it.
https://secondnexus.com/news/politics/remove-trump-name-buildings-liability/
Well over 50% of the country would never set foot in one. Do you think that is higher or lower than in 2014 when politics was not part of the mix?
- Just Me 2 - Thursday, Nov 7, 19 @ 11:09 am:
Keep in mind the Trump Organization is currently in trouble for keeping two different sets of books. One to tell the government, and the other to tell their financiers.
- Lester Holt’s Mustache - Thursday, Nov 7, 19 @ 11:12 am:
== So much for the emoluments clause argument as a reason for impeachment.==
It must be exhausting, spending the days trying to think up new ways to try to defend terrible people who happen to be on your political team. After all those years of sticking up for Bruce, even after everyone knew it was a lost cause, you became his last loyal defender and then he disappears into the Italian countryside without sending so much as a thank you note. And now having to switch over to defending this guy. You have all of our sympathies.
- Boone's is Back - Thursday, Nov 7, 19 @ 11:13 am:
Hey Lucky Pierre- there are plenty of other examples to use. Jared Kushner shaking down the Qatari’s for a $500M loan he couldn’t secure in the states (while dualy serving in the administration), the White House dictating that the Air Force and other branches of government patronize Trump Hotels while abroad, the Ukranian PM fawning all over POTUS and saying he stays at the Trump while in DC, Trump declaring that the G8 will be held at his resort (and then backtracking), and Trump’s hotel deal in Istanbul factoring into our withdrawal in Syria…. just to name a few.
- Oswego Willy - Thursday, Nov 7, 19 @ 11:14 am:
Oh - Lucky Pierre -, lol
If a President is measuring how being president hurts his/her bottom line… that’s not someone who understands public service.
Also a federal judge has allowed emoluments be a federal case against this POTUS.
So there’s that too.
- Cheryl44 - Thursday, Nov 7, 19 @ 11:17 am:
If only they could somehow make money off all those people snapping selfies in front of the hotel while they’re giving it the finger.
- City Zen - Thursday, Nov 7, 19 @ 11:18 am:
How has hotel occupancy tracked against AirBnB bookings?
- JS Mill - Thursday, Nov 7, 19 @ 11:27 am:
= So much for the emoluments clause argument as a reason for impeachment.=
Maybe look up that big word so you know what it means. It does not refer to corporate profits or profitability.
Then take a couple plays of there playa.
- anonomoose - Thursday, Nov 7, 19 @ 11:27 am:
“Then the Embarrassment came.”
Heh. Womp womp.
- Excitable Boy - Thursday, Nov 7, 19 @ 11:32 am:
- Being President has hurt the value of his properties not helped. -
That has nothing to do with emoluments, genius.
- Chito - Thursday, Nov 7, 19 @ 11:38 am:
Save for those 5 letters, it really is a beautiful building. It’s a bright gem in the city’s skyline crown. Too bad his ego won’t allow the removal of the signs.
- Decatur_movedback - Thursday, Nov 7, 19 @ 11:43 am:
The Toronto hotel was a franchise hotel. It changed owners and changed names from the Trump name to the St Regis hotel Toronto. It was in worse shape, the previous owners went into forclosure after their sales dropped. Bank then sold it.
- Lucky Pierre - Thursday, Nov 7, 19 @ 11:49 am:
Why on earth would you consider what I posted a defense of Trump?
Take your argument about Emoluments up with House Democrats who have dropped it from their impeachment hearings.
- Paddyrollingstone - Thursday, Nov 7, 19 @ 11:51 am:
There’s something so satisfying about taking the water taxi down the Chicago River and see all the crowds, new restaurants and bars up and down both sides and then seeing the Trump property, an oasis of blight, surrounded by success.
- Oswego Willy - Thursday, Nov 7, 19 @ 11:57 am:
=== Take your argument about Emoluments up with House Democrats===
Or let the federal courts decide.
You support Trump. Embrace that - Lucky Pierre -
- Wensicia - Thursday, Nov 7, 19 @ 12:04 pm:
Another prospective bankruptcy, business as usual for Trump.
- Ron Burgundy - Thursday, Nov 7, 19 @ 12:08 pm:
A good chunk of the population wouldn’t stay there on principle. For those that might, even a set of them would not stay there because who needs the potential of protesters and a police cordon outside your hotel? Lots of very nice places in Chicago without the hassle or the image issues.
- Anonymous - Thursday, Nov 7, 19 @ 12:14 pm:
== Rich’s TDS on display as usual.==
As usual? This is an Illinois blog. Very little about Trump here.
- Al - Thursday, Nov 7, 19 @ 12:16 pm:
Art Jones’ crew is pretty small and stick to less luxurious digs than Trump Tower.
- dr. reason a. goodwin - Thursday, Nov 7, 19 @ 12:22 pm:
I’d be curious if international tourism to Chicago is down this year.
- Lucky Pierre - Thursday, Nov 7, 19 @ 12:26 pm:
Glad to see there is universal outrage about using the power of elected office to enrich yourself personally among the usual suspects here today.
Of course it takes a post about Trump and not Speaker Madigan to make the point
- Chicago Cynic - Thursday, Nov 7, 19 @ 12:28 pm:
“Take your argument about Emoluments up with House Democrats who have dropped it from their impeachment hearings.”
It was never part of the impeachment hearings. They’re about the president abusing his power in Ukraine.
- ike - Thursday, Nov 7, 19 @ 12:45 pm:
LP- why does Trump have to prop up his failing properties with taxpayer money by booking members of his administration, servicemen, and foreign diplomats to stay at his failing properties, if he’s such a great and smart businessman?
I thought you were against the misuse of taxpayer money (unless it’s a republican, than you are more than ok with it)
Do you even understand the emolument clause, or do you get all your information from Fox News and the Koch brothers?
- Johnnie F. - Thursday, Nov 7, 19 @ 12:55 pm:
Maybe Trump could market to his people. They could host a Qanon meeting there. That could fill the place /s.
- Chicago 20 - Thursday, Nov 7, 19 @ 1:47 pm:
The Chicago hotel business has been well below the national average growth rate for over a decade now.
While Trump’s hotel also suffers from additional self inflicted wounds the dependency of Chicago’s hotels on trade shows cannot be overlooked.
McCormick Place has lost 14 trade shows since the MPEA Interim Board adopted the C.H. Johnson recommendations.
In FY 2010, in the Great Recession, the MPEA had $68,215,000 in Operating Revenue from the Use of Convention Facilities.
In FY 2018 the MPEA reported $48,097,000 in Operating Revenue from the Use of Convention Facilities a loss of $20,118,000, a 29.5% drop.
These C. H. Johnson recommended reforms have made McCormick Place uncompetitive while private contractors gouge exhibitors with cost increases of over 300%.
But these reforms aren’t just costing the hotel owners and exhibitors money, it’s also costing Illinois taxpayers.
The MPEA received a $223 million bailout from the General Assembly to prevent the MPEA from defaulting on their 2019 bond payment with 50 more years to go.
- Jibba - Thursday, Nov 7, 19 @ 2:07 pm:
Maybe a few more people could stay if the average nightly room rate was less than $205. Plus a big bite of tax and parking.
- Da Big Bad Wolf - Thursday, Nov 7, 19 @ 2:25 pm:
==I’d be curious if international tourism to Chicago is down this year.==
I don’t know how many people are from other countries but tourism is at a record high for Chicago.
https://www.chicagotribune.com/travel/ct-trav-chicago-tourism-increase-2017-0114-story.html
- Chicago 20 - Thursday, Nov 7, 19 @ 3:31 pm:
Chicago’s international tourism has declined steadily since spending $8 million to host the U. S. Travel Association Pow Wow, which astonishingly claimed at that time to have an economic impact greater than the Super Bowl.
Curiously Choose Chicago has stopped reporting Chicago’s monthly occupancy and ADR statistics after months of steady Chicago hotel industry declines.
Here is some information you can use to discern tourism data.
https://chicago.suntimes.com/platform/amp/columnists/2019/9/6/20850010/chicago-tourism-analysis-ed-zotti-city-crossroads
- Sox Fan - Thursday, Nov 7, 19 @ 3:47 pm:
===I don’t think we should give someone a tax break for wrecking their own brand or being too numbskulled or stubborn to fix it.===
What wasn’t reported in the Washington Post article is that the Cook County BOR did not grant assessment relief to the property.