‘Distractions’ haven’t deterred Trump Hotels’ growth
 
‘Distractions’ haven’t deterred Trump Hotels’ growth
26 JANUARY 2017 9:34 AM

Although the President’s eponymous hotel company has its hands full dealing with the challenges of operating during a tumultuous campaign and election period, CEO Eric Danziger said the company is working on new growth—and possibly a new brand. 

LOS ANGELES—The executives of Trump Hotels don’t seem fazed by the hubbub surrounding the company and its hotels following Donald Trump’s election to the highest U.S. office. In fact, it’s just the opposite, according to CEO Eric Danziger. He said expansion is in the works for the company’s newest brand, Scion, and there is the possibility for another new brand down the road.

Danziger spoke with Hotel News Now during the Americas Lodging Investment Summit in Los Angeles this week about how the company is dealing with what he called “the distraction” related to the presidential election, its new focus on purely domestic development and how growth factors in.

There are 14 Trump-branded hotels open worldwide, with two more expected to open in the next few years. Last year, the company announced its new lifestyle brand, Scion.

Dealing with distraction
Danziger acknowledged that the campaign and post-election periods have been challenging at times to navigate, as properties deal with protestors and increased security and scrutiny. Still, there are silver linings, he said.

“One of the coolest things is that while we have been through an interesting year and a half, we haven’t lost a single GM,” he said. “That’s a testimony to the fabric and culture of the company. Our employees know who we are and what we’re going to do.”

“I’m most proud this year that we’ve had some incredible results, even with everything happening,” he said. “Our guest satisfaction is up over last year and on top of that, our employee associate satisfaction surveys show the highest scores they’ve ever shown. We’re proud of the teams, and we have good performance.”

When it comes to security issues, Danziger said safety and security have always been a top priority at the company, since even before it was dealing with Donald Trump the President of the United States, it was dealing with Donald Trump the entrepreneur.

“We’re one of the few companies that have always had corporate security people who oversee what we do,” he said.

Jeff Wagoner, EVP of hotel operations at Trump Hotels, said that dealing with protests and other related threats is an ongoing and organized process.

“Local law enforcement has been great in partnering with us to work through protests and even rumors of protests,” he said. “They’re with us as well to strategize and support. We talk about it all the time, we have regular discussions with all our hotels about it, and it’s continuous. We put a lot of energy and effort into it.”

Through it all, Danziger is focused on the core business of maintaining and growing the brands under his watch, he said. “The only way you grow is to demonstrate performance—how employees see you, how guests see you, period,” he said. “Speaking for everybody in this company, I can say it’s an amazing, once-in-a-lifetime experience for this group to be part of a most fascinating time, even with the challenges.”

Power shifts
Danziger confirmed that Ivanka Trump, former Trump Organization VP for development and acquisitions, officially took a leave of absence from the company, turning leadership over to EVP Donald Trump Jr. and his brother, EVP of development and acquisitions Eric Trump.

That move had little impact on the hotel side of the business, he said.

“It was never run just by Ivanka alone,” Danziger said. “On business matters, it was always seamless between all the kids. Every week I used to meet with the three of them, and now every week I meet with the two (sons). The boys have been deeply involved.”

“I’m happy the election and inauguration are over,” Danziger said. “Mr. Trump is President of the United States, and he will do what he does to govern the nation, and we will do what we do to run the company.”

The other big power shift within the company: Donald Trump announced that the company will make no new foreign deals during his presidential term, which Danziger confirmed means the hotel organization will focus solely on domestic development during that period. This new focus means the company has “a big runway” in the U.S., according to Danziger.

“I’m excited about the position for both (the Trump and Scion brands) in the competitive landscape,” he said.

While focus moving forward will be solely on domestic deals, the company’s currently open and under development Trump hotels outside of the U.S.—including properties in Panama, Canada and the U.K., and developments underway in Vancouver, B.C.; and Indonesia—will move forward as planned.

More about development
Danziger cited “double-digit numbers” when it comes to letters of intent for the newest lifestyle brand in the company’s portfolio, though no dates have been given for the first property opening.

“Our smallest Scion deal now is 72 rooms with five F&B outlets and our largest is 800 rooms,” he said. “This brand is designed to be the right hotel for any given marketplace.”

Danziger and Kathleen Flores, EVP of new brands and innovation for Trump Hotels, said the connectivity-focused brand has a lot of room to grow.

“I have very little doubt there will be 50-100 of these open or somewhere in the process in a fairly short time period, like three years,” Danziger said. “Everyone we’ve met with about this says they really connect with the brand.”

Growth for Scion, as for the core Trump brand, will always be through ownership and management, not franchising.

Wagoner said growing the company’s domestic footprint is its highest priority. “The pipeline is robust,” he said. “There are interesting markets out there—biggies, like San Francisco or L.A., and some really hot secondary markets that Trump or Scion could be in.”

“There’s no Trump in Dallas or Scottsdale (Arizona), for example,” Danziger said. “Nashville’s a great market. Austin’s a great market.”

While he said that interest is skewing “a little heavier toward Scion,” some developers the company has had conversations with are asking about the possibility of dual-branding Trump and Scion hotels in one location.

A new brand?
Danziger, a self-proclaimed “growth-oriented guy,” said there’s room for a future new brand in the portfolio as well, though he didn’t give concrete details other than to say that “in the future, if I did another brand, it might be in a tier that’s franchiseable.”

“I’ll always consider leveraging that we’re a hospitality company and making sure where possible that we have a product for all different tiers of users,” he said. “So that’s code for of course I’d (consider launching a new brand).”

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