Trump sets ambitious agenda for 2016
17 FEBRUARY 2014 9:44 AM
Trump Hotel Collection has three properties slated to open in 2016, including the recently announced Trump Hotel Rio de Janeiro.
LOS ANGELES and NEW YORK—2016 is shaping up to be a banner year for hotel operator Trump Hotel Collection, which has three projects slated to open, including the recently announced Trump Hotel Rio de Janeiro.
That churn of development is made all the more impressive given the group’s executive team only entered the hotel space in October 2007 as self-described novices.
“We’ve always been catering to the luxury sector. We just saw a great opportunity to do what my father had done in conventional real estate for 30 years,” said Donald Trump Jr., executive VP of development and acquisition, during an interview with Hotel News Now.
“What’s so different about this business? Obviously there are some complications,” he said. Learning new acronyms—ADR, RevPAR, among others—was one of them. But when broken down, the hotel industry is not rocket science, he said.
The Trump Hotel Collection executive team—which includes Trump Jr. and his siblings Eric and Ivanka as executive VPs—came into the hotel space with a strong pedigree. Their father is real estate magnate Donald J. Trump. The company also appointed hotel veteran Jim Petrus as COO.
Such backing afforded the group immediate clout at the acquisition table, made evident by its successful bid with the U.S. General Services Administration for $200 million to redevelop the iconic Old Post Office building in Washington, D.C.
“We competed with every 800-pound gorilla,” Trump Jr. said of the bidding process. “We bring such a complete package to the table.”
Working in the company’s favor is its relatively small size and organizational structure. With only eight hotels in the portfolio and a small executive team, Trump Hotel Collection is more nimble and faster than other players in the luxury space, Trump Jr. said.
“One aspect of our organization … is that because we are privately held, because it is a labor of love for the family … we’ve been able to eliminate a lot of the nonsense that we’ve seen in the hotel industry,” he said during a news conference at the Americas Lodging Investment Summit.
Whereas at other hotel companies key decisions are slowed as they work their way up and down the managerial hierarchy, at Trump Hotel Collection the executives make themselves accessible for near-instant feedback, he said.
Rocketing into Rio
The Trump Hotel Rio de Janeiro is the latest jewel on the crown—a 171-room property in the posh Jardim Oceanico sub-district along the beach of the Barra da Tijuca borough.
Trump Hotels partnered with Rio-based developer LSH Barra S.A., which is funding the hotel valued at approximately 200 million Brazilian real ($84 million). (Trump Hotels owns four of its eight hotels.)
“We’re probably not necessarily known for not having a hubris, but we don’t have the hubris to assume we know everything in every market. … It’s about picking the right partners,” Trump Jr. said during a phone interview.
“We’re very excited,” said Paulo Figueiredo Filho, CEO of LSH Barra, during the news conference. “We’re developing the most luxurious hotel being developed in Rio de Janeiro and in the whole country right now.”
The Trump Hotel Collection has two hotels open outside the United States: the International Hotel & Tower Panama and the Trump International Hotel & Tower Toronto. Slated to open in 2016 along with the Rio project is the Trump International Hotel & Tower Vancouver and the Old Post Office.
“The international push is very real for us,” Trump Jr. said.
“We’re focused on places where the brand makes sense, where the value of the brand is going to help drive the needle a lot,” he added.
All markets are in play, he said, including Europe where Trump Jr. and his fellow executives have scouted in recent months. The hotel company’s entrepreneurial nature also plays well in emerging markets, Trump Jr. said.
When asked if there’s anything specific in the development pipeline, outside of the three properties that will open in 2016, the executive VP answered only, “yes.”
The company is methodical in its development strategy, he said. It won’t grow for the sake of growth.
“We don’t report to a board. We don’t report to shareholders. I report to one shareholder (Donald J. Trump). We can have a growth strategy that makes sense for an ultra-luxury brand,” he said. “We get to be very selective. That’s going to let us remain in that ultra-luxury niche a lot better than others.”