With a massive loan payment coming due in a matter of months, Donald Trump needs cash and he needs it fast. And he has finally found a way to get that money - He is selling his hotel in Washington, D.C. Rumors of a potential sale have been swirling for months, and now it appears that the hotel will be sold to the Hilton hotel behemoth, officially removing Trump's presence from the downtown area. Farron Cousins explains what this means and why Trump was in such a hurry to sell the property.
Link - https://www.rawstory.com/trump-sell-dc-hotel-loses-profits/
Don't forget to like, comment, and share! And subscribe to stay connected!
Connect with Farron on Twitter: https://twitter.com/farronbalanced
*This transcript was auto-generated. Please excuse any typos.
Well folks after months and months of speculation and rumors, and of course searching for a potential buyer, the Donald Trump hotel in Washington, DC is no longer going to be the Trump international hotel in Washington, DC. If a final sale is approved, it will become a Hilton hotel. That's right. Folks, Donald Trump has been forced to sell his DC international hotel. It will no longer bear his name. It will become a Hilton property. And the reason for that is very simple. Donald Trump sucks at business. The hotel was hemorrhaging money. So in case you're not familiar with the history of Donald Trump's, you know, Trump international hotel in Washington, DC. He leaves the property from the federal government in 2013 for $250,000 a month for 60 years. That's how arrogant they were in thinking, they're going to turn so much profit off of this thing. We're going to lease it for 60 freaking years at a quarter million a month.
And we'll totally make more than that. Well, they didn't, they lost millions, millions, and millions and millions. Here. It is from Forbes. The property has been struggling to make money for years operating profits for the 12 months ending August 31st, 2017 appeared to be negative 4.3 million, the next year things improved, but the Trump's still only squeezed out $900,000 of operating profits on 52.3 million in revenue. And they lost money after paying interest on their debt a year after that, the property bled more 2.1 million on an operating loss basis. Things got worse when COVID struck in the year that ended August 31st, 2020, the hotel produced an operating loss of 8.6 million. There are a lot of ways to lose money every year that don't require investing $370 million upfront because that is what they poured into the property. So this has become a massive financial loss for the Trump organization. And Hilton's going to swoop in probably pay well over what Donald Trump has put into it.
So he's going to end up probably we don't know the final number, but probably making a profit off of it. But here's the thing. Turning a profit on a hotel in, in, in, right there in the heart of Washington, DC. I I'll, I'll give you a COVID year. Okay. I give you COVID year. Everybody struggled, especially hotels, the tourism industry, people were not traveling. You didn't have people coming from overseas to go to DC. Totally understandable. So let's take that one out of the equation all the other years though. There's no excuse. I don't know if you've ever tried to book a hotel in Washington, DC. I've had to travel there multiple times for work, uh, can be very difficult, especially if you need to do it last minute, because a lot of them were all booked up and they kind of stay that way.
It's always busy season in Washington, DC. Again, a lot of that has to do with, uh, international travel. And even while he was president of the United States, we know that foreign countries, foreign dignitaries would come and they would intentionally stay at Trump's hotel as a way to, you know, put money in his pocket, stay on his good side. There's even reports that Saudi Arabia would book out and pay in advance for huge, huge, huge blocks of rooms and never show up to use them and never of course ask for a refund. So they were just literally pumping money into the hotel, not even utilizing it. And the guy still couldn't turn a profit.
Here's another part of this story though. It's not just the fact that the hotel keeps losing money. That's not the only reason Trump wants to offload it. He's also got a very hefty loan coming due. I believe it's $170 million that he owes the Deutsche bank. So if you include the 370 million that he pumped into the property, calculate all his losses on top of that, then add the $170 million loan that he has to repay for other business that he did. Now, it's starting to look unlikely that he'll turn a profit off this. He may break even, you know, depending on whether or not the $170 million loan was used for this hotel, if it was not, which the loan came from New York, um, which probably means nothing. But anyway, there's a good chance.
0 Comments