Donald Trump's New York hotel is just 16 per cent full as the coronavirus takes its toll and individual investors will have to cover a $9million loss on the rooms to keep it afloat
Donald Trump's New York hotel is just 16 percent full as the coronavirus takes its toll on the hospitality industry.
Individual investors - who own the rooms - have been told they will have to help cover a $9 million loss on the rooms in order to keep the hotel afloat.
Trump hotel executives told investors this week that rising Covid-19 infections were once again driving down their business, putting an end to a brief fall improvement.
In order to break even, the Trump hotel needs to be at about 70 percent full, with guests paying $600 per night, according to the Washington Post.
Executives said since the start of November, the hotel has been around 16 percent full - well short of its required rate to make a profit.
The president has repeatedly played down the threat the pandemic poses.
This weekend, the president said that the country is 'rounding the corner', but executives had told a less hopeful story about Trump's business interest.
In better times: The Trump hotel, pictured in 2016, requires 70 percent of its rooms to be full in order for it to break even. According to its executives, since the start of November the hotel has been around 16 percent full as the coronavirus takes its toll on the hospitality industry
'While we were seeing encouraging signs of growth and recovery, that momentum tempered down towards the end of October, with rising covid cases nationwide,' said Matthew Vandegrift, the hotel's general manager said on a conference call.
'The momentum we were experiencing has slowed as of late November.'
The unusual management structure of Trump's hotel means that the company itself does not own the building, and is instead pair to operate it.
Instead of the company owning it, investors own the individual rooms in the hotel after they were sold off years ago to those who wanted a share in the profits.
Now, however, investors were told by executives on the conference call that they are not expected to be rewarded with any profits this year, and could even have to send money to keep the hotel running.
By the Washington Post's calculations, the hotel has faced losses of around $9 million on its rooms in 2020, and is expecting more losses in 2021 of around $7.5 million hotel-wide.
Trump - who has repeatedly downplayed the pandemic - will be required to contend with it should he return to the position as head of his business once he leaves office in January
The newspaper reports that asking for clarification, one investor asked: 'Besides the money we unit owners have been losing in 2020, do we still have to wire more money?'
'You're certainly going to have to wire more money for 2021,' Douglas Russell, who chairs the building's board, replied on the call that Donald Trump Jr., the president’s son and company board member, was sitting in on.
Trump handed control of his organisation to his sons Trump Jr. and Eric during his time in office.
Should he return to lead the company once he leaves office in January, the pandemic will be one of his business' primary concerns under his control.
Trump's organisation has been hit hard by the coronavirus due to its dependence of travel and hospitality, and has prompted hundreds of layoffs and the long-term closure of its Vancouver hotel.
People gather to protest against U.S. President Donald Trump's hotel as he declared a national emergency in February 2019. Trump organization executives told investors they would be required to wire more money to the hotel in order for it to continue operating
Executives said on the call on Monday that they had also furloughed 80 employees in New York since the pandemic began, The Post reported.
In another sign of the downturn, the hotel's chef Jean-Georges Vongerichten - who works out of a high end restaurant on the first floor - said on Tuesday that the Trump Organization had agreed to cut his rent by around a quarter.
Restaurants in New York were hurt during the city's lockdown restrictions, which caused the temporary closure of indoor dining.
Vongerichten's was forced to lay off 216 employees, and while indoor dining has re-opened in New York, Mayor Bill de Blasio has said it will probably be required to shut down again soon as coronavirus cases continue to surge.
Speaking to The Post, Vongerichten said he might have to ask for further discounts from the Trump Organization if business does not improve again in 2021.
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