Will Donald Trump Bail Out His Coronavirus-Battered Company?

He’s reportedly considering a $150 billion rescue for the hospitality industry.

President Trump's Mar-a-Lago resortAlex Brandon/AP

The coronavirus is a rapidly developing news story, so some of the content in this article might be out of date. Check out our most recent coverage of the coronavirus crisis, and subscribe to the Mother Jones Daily newsletter.

On Tuesday afternoon, Donald Trump sat down with hotel executives who pleaded with the president to assist the beleaguered hospitality industry with a multibillion-dollar bailout. The meeting, also attended by Vice President Mike Pence and Commerce Secretary Wilbur Ross, highlighted a massive conflict of interest: Trump derives much of his fortune from hotels and golf clubs, and his properties have been battered by the coronavirus outbreak. If he bails out the hotel industry, he will also be bailing out himself. 

Trump has made money many different ways over the years—or tried to—but since taking office, his hotels and resorts have been the mainstay of his personal wealth. Though Trump made big bucks in the last decade selling condos and other properties, that business has almost entirely dried up since he became president. His once-lucrative reality TV career is also on hold. But Trump’s 11 hotels and 16 golf resorts have continued to produce revenue in recent years. Of the $434 million in revenue the president disclosed in 2018, at least $336 million came from his hotels, resorts, and golf clubs. 

It’s still too early in the year for the full impact of the coronavirus on the golf industry to be determined. A number of Trump courses are located in areas where the golf season hasn’t even started. But according to the hotel industry leaders who met with Trump, their properties are already being decimated by the crisis. In the meeting, the hotel execs asked for a $150 billion bailout. 

Christopher Nassetta, chief executive officer of Hilton Worldwide, one of the world’s largest hotel chains, told the president that his company planned to close, at least temporarily, almost all of its operations in major cities. “Hilton’s been around 100 years—we’ve never closed a hotel that wasn’t going to be demolished or rebuilding,” Nassetta said. “The bulk of our hotels in the major cities are closing as we speak.” Nassetta estimated that occupancy rates for hotels globally could fall to 10 to 15 percent. 

To put that in context, Jan A. deRoos, a professor emeritus of hotel finance and real estate at Cornell University, told Mother Jones that high-end hotels (like those the Trump Organization operates) require somewhere around a 60 percent occupancy rate to break even. The sunk costs of running a hotel are huge, he explained. They include keeping the building open and employing housekeeping and maintenance staff ,whether rooms are full or not. If a hotel maintains a good occupancy rate, it can be extremely profitable. If it doesn’t, deRoos said, it can go downhill fast.

The outbreak is already hitting Trump properties—and hard. And many weren’t faring too well already. Business at the Trump Doral golf resort in Florida slumped 18 percent between 2015 and 2017, for instance. But the pandemic is now slamming some of Trump’s most reliable moneymakers. That includes Trump’s luxury hotel in DC, which earned $40.2 million in revenue in 2018. That figure includes sales at the hotel’s popular steakhouse and its Benjamin Bar & Lounge, a pricey hangout popular with Beltway conservatives, lobbyists, and various Trumpworld figures. The hotel is still open for business, but DC Mayor Muriel Bowser has ordered that all restaurants and bars close through the end of the month (except for takeout or delivery), effectively shuttering this conservative clubhouse. 

Trump’s Mar-a-Lago resort has been another stalwart in his portfolio. In 2018, it earned $22.6 million in revenue, in no small part because of the president’s habit of visiting it nearly every weekend throughout the winter. But Trump’s insistence on using Mar-a-Lago as the “Winter White House” also brought coronavirus right to his door. Last week, Brazilian President Jair Bolsonaro visited Mar-a-Lago accompanied by three people who later tested positive for the virus. As a result, Trump was tested for the virus. (He was negative, according to the White House doctor.) The club closed on Monday for a deep clean. On Wednesday, it told members it would temporarily close its main dining services, spa, gym, and guest rooms. Other parts of the club will remain open, but under state restrictions limiting its capacity.

The club’s lucrative sideline as a location for galas and large events also seems to be on pause (the Trump Organization did not respond to requests for comment). A fundraiser scheduled for this weekend (and described as the largest daytime event the club hosts each year) was postponed indefinitely. And the president himself has said that Americans should limit gatherings to no more than 10 people. 

On Tuesday, the general manager of Trump’s Bedminster, New Jersey, golf club, where the president likes to spend many of his summer weekends, announced it would close its facilities with the exception of one its golf courses—which can be utilized only if players walk the course (instead of using shared golf carts) and carry their own bags. 

“These are unusual times, stay safe, and we will update you as events develop. If we can do anything for you please let us know. Wash your hands!” wrote David Schutzenhofer, the club’s manager.

Mother Jones contacted the White House and the Trump Organization to see whether Trump’s company would participate in any potential hotel industry bailout and whether Trump was taking any steps to deal with this potential conflict of interest. Neither responded.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate