Skift Take

The hotel business will always be a challenging one, regardless of whether your founder happens to be the 45th President of the United States or not. Whether the Trump Hotels company can continue its focus on domestic growth, while avoiding the many conflicts of interest and challenges that arise in this unprecedented situation, we'll have to wait and see.

A lot has happened since we sat down with members of the Trump Hotels executive team on January 25 during the Americas Lodging Investment Summit in Los Angeles.

At the time, the hotel company’s founder and namesake had only been in office for a total of six days and generally, there was an air of optimism among the nearly 3,000 attendees who’d gathered at the JW Marriott Los Angeles L.A. Live.

That optimism was shared by Eric Danziger, CEO of Trump Hotels, too. He said, “This has always been a very good conference. You know, I’ve been doing this conference for 25 years or something. It was interesting to see how it’s gone from a couple hundred to a couple thousand. Very productive, always good.”

But a lot has happened since then, including the extremely controversial travel ban President Trump signed as part of an executive order just a few days after our meeting, prohibiting people from seven Muslim-majority nations from entering the U.S.

Prior to meeting with Danziger and his fellow executives, EVP of Hotel Operations, Jeff Wagoner, and EVP of New Brands & Innovation, Kathleen Flores, we were specifically asked by the Trump Hotels public relations team to refrain from asking anything too political during our on-record interview.

And given the fact that the Trump Organization’s lawyer has said no part of the company will make any reference to President Trump, we weren’t holding our collective breath.

But during our conversation, we did get a better glimpse into just how Trump Hotels plans to proceed, and just how it intends to deal with the very unique challenges of having a founder who just happens to also be President.

Still, plenty of questions remain, including just how many conflicts of interest exist with regard to Trump’s businesses, including his hotels. New reports have surfaced suggesting Trump the President may not be as distanced from his business as his lawyers suggest. This is likely not the last report of its kind we will see in the coming weeks, either.

Through all the challenges and potential conflicts, however, Danziger and his team seem doggedly determined to continue growing the Trump Hotels brand, as well as its newest one, Scion. Just last week, it was announced that the first Scion hotel would likely debut in Dallas, with the help of individual investors from the U.S., Turkey, Qatar, and Kazakhstan.

Below is our conversation with Danziger, Flores, and Wagoner. It has been edited for length and clarity.

Skift: What’s the overall sentiment that you’ve been hearing from the people that you’ve been meeting with? Is there that optimism that everyone’s been talking about, or a more cautious tone?

Eric Danziger: I think, that like, you know, it’s that proverbial “cautiously optimistic.” This business runs in cycles that are not a surprise to developers and owners. I think that the current mindset is more about finding existing assets to buy and convert, which is great news for us compared to the new build. I think that, to the extent that there’s a little cautiousness it has to do with, do we really want to start something now that we won’t open for five years and we don’t know what it’s going to be like then? But I’m very optimistic about the industry. You know, this industry keeps getting better. It will have some bad years, but it’s doing fine and most markets will continue to do so.

Skift: Right. I saw that Bloomberg article that came out today, that said that Trump Hotels is planning to expand and that you’re only in five major U.S. markets now, but you plan to expand to 26.

Danziger: Actually, the reality is I don’t have a number. The simple truth is, is we had a lot of discussions that were related to international growth. With the presidency, we’re not going to do any international growth, because of whatever people perceive as conflicts. So, all that did was say that we’re going to have full focus — instead of some focus — on growth domestically of both Trump and Scion.

That is a natural outcome of being able to focus a 100-percent on that growth. But I have to say that the opportunities which exist in the United States for both brands are … You can draw your own conclusion. Why wouldn’t a great five-star brand like Trump be in every market that has a five-star market opportunity? Why wouldn’t it be?

They don’t all have to be new builds, they can be a conversion of something. I don’t know how many that will be but I’m hoping, in time, it’ll have representation in every market that has a five-star opportunity.

Ditto for Scion. It’s a four-star lifestyle brand. That kind of brand can be in every city — tertiary, secondary. So, how many is that? The opportunity is for hundreds. How long it takes us to do that is another issue and I wouldn’t put a timeframe to it.

I gave some examples of some of the cities when they said, “Well, where would … ” Seattle, Denver, Dallas, all [the] places [where] we’re not, are certainly growth opportunities for us.

Skift: I was wondering, with the focus to be more on domestic versus international, does that impact any deals that were already in place prior to the presidency or …?

Danziger: Every deal that we have that’s open is fine, of course. And we have had underway, two resorts in Indonesia: Bali and Lido. Those will continue and are going to fabulous resorts, so we’re not changing that. It is only changing the focus of going and doing new things that don’t exist anymore.

Skift: I know we didn’t want to talk too much about politics, but I wanted to ask you something from a hotelier’s perspective. This is an unprecedented situation. Is it challenging for you to give interviews to the media, or to talk about the Trump Hotels brand publicly? Given, like you said, these concerns about conflicts of interest and the fact that the Trump Organization has said that none of the organization’s businesses can reference the President, does that make it much more difficult for you to … ?

Danziger: I hope you will forgive me, but I’m going to be very honest in that answer. And the reason of the difficulty, is because of the press, not because of us, and including your organization. I’m going to give you an example of the thing which was heartbreaking for me and hurtful to people.

I think you guys were one of the first to report, several months ago, when it was Hipmunk. Hipmunk reported a 50-percent decline in business at Trump Hotels. It’s picked up widely. And we tried to straighten out that story, so let’s explain that to you. First of all, you listed five hotels, and by the way, three of those hotels are 20 percent above last year. But the press reported that story and here is the fact. The fact is, I never even heard of Hipmunk. I’ve been in the business 46 years. Hipmunk gave us 16 room nights, in total, costs this company in a whole year. So, even if it was 50 percent off the Hipmunk channel, that would have been a loss of eight rooms across our whole company, for a year.

I think it’s very irresponsible of the press to have said, “Trump, 50 percent down,” because of that story. It may have been factual reporting the percentage on … But, it’s not [a] factual story. So, any reticence that I would have to talk to the press, is because of the unfairness that I personally found. It has nothing to do Mr. Trump’s being [an] owner. I found that personally offensive to me and to our people, who suffer because of [a] story that was wrong. So, that’s not scolding you, that’s scolding the process that whatever happened, allowed that to happen, that’s wrong.

I have no interest in saying things that could in any way be misinterpreted. That’s all that we’re going to say about it because who knows how it’ll be written up otherwise.

[Editor’s Note: Skift briefly mentioned the Hipmunk report in this article, and this one, both of which were about the new Scion brand of hotels, but Skift did not publish an article exclusively about the Hipmunk report. In August, Skift published data from Foursquare that suggested a drop in foot traffic at U.S.-based Trump Hotels properties. Skift also conducted its own surveys which demonstrated some 56.9 percent of respondents felt they were less likely to stay in a Trump Hotel because of Trump’s Presidential campaign in May 2016. Another survey conducted post-election had 53.8 percent of respondents saying they were less likely to stay in a Trump Hotel now that Trump has been elected President.]

Skift: Is it a challenge for you to talk about the hotels without necessarily talking about the President?

Danziger: Well, Trump wants that. Trump is run by two other Trump kids. They happen to have the same name. The company is Trump, because of the founder. But he has another job now and the other Trumps have the job of running the company. We’re always talking about our company and what we do and what we’re expanding, [and the] brands and growth of the brands.

It’s a simple deal. I’m not going to talk about what the President does and he’s not going to talk about what the company does. That’s pretty clear, you know. I don’t speak for him and he’s not speaking for the company anymore.

Skift: We talked a little bit about Scion, but, I wanted to see if you had additional details to give us about that particular brand.

Kathleen Flores: We’re really excited about the Scion brand. It would sit in the four-star lifestyle category. I joined the organization about a year ago. There had been a very decent amount of work by the team done in terms of brainstorming aspects of what we would all be looking for in a new product, that the organization was going to launch. I’ve had the joy and privilege synthesizing those things into a take to market brand. And that brand is Scion. Our core pillar, if you will, is connecting.

It doesn’t mean just connecting through technology, although that’s a given in today’s world. It’s about connecting with a destination, it’s about the local community connecting with the property. It’s about creating environments and delivering programming that is interesting to both the traveler coming too, and the person living in the surrounding community, so that it brings these two constituencies together.

What we’ve done is taken a look at various design opportunities and programming elements again, as an a la carte menu. Because what we don’t want to do is take a very prescriptive brand to market, because Scion is so destination relevant.

What we said is, “Look, we can do these 15 or 20 things. Which one makes the most sense in this market?” And, it would probably be very different than what makes sense in this market. But regardless of the individual programming and the individual elements in each location, what a traveler and community guest would find, is that everything there is about bringing people together and creating opportunities. If you wanted to even just connect with yourself. So, we’ve got a lot of flexible spaces. You might find collaborative work space opportunities, you’ll definitely find opportunities for holding a meeting, birthday celebrations, other types of special occasions and events.

Local partners, such as, and we were just talking about this earlier, bringing in students from a local culinary academy to refresh our food and beverage options, right. And we can even then create something that changed quarterly if we wanted too. But, in that way we’re highlighting members from the immediately community. Keeping it interesting, keeping it fresh. And providing our travelers and people who are staying with us as hotel guests, a very unique experience.

Danziger: Scion’s a non-branded brand, because that constituency doesn’t like the big company brand stuff. She’s got one going on, it’s 800 rooms, has a bowling alley and one that’s going on at 73 rooms with five food and beverage outlets. The way it hit me today is, when I was a young hotelier, hotels used to be a hub of a community that people in the area came to, not just people staying overnight, right. You go there for Sunday brunch or let’s go to that restaurant for dinner, and they don’t do that anymore. And the hotels are pretty much for people to stay overnight.

This idea is to bring the community into the hotel, which then is a benefit to the community and the people in it, and also then the travelers get a kick out of it when there’s local things of relevance in the place that they’re staying. It’s a cool, happening, flexible space. Maybe the front desk is a bar. Maybe the living area is a living area and then over there is a collaborative workspace. And over there is a library, and over there is a little sit-down bar, maybe it has all those elements. It’s exciting.

Flores: I mean, because it’s flexible it can continue to evolve. So programming can change. I mean, just like in many other instances, we can try things out. Maybe it’s a performing art, maybe it’s a book signing, maybe it’s wine … I mean, something that’s simple and done as wine tasting or beer tasting, or whatever happens to be the thing at the time. We’ve looked at a variety of performance art options. Everything from interpretive dance to magic shows. You know, I mean, there’s a really beautiful spectrum of things happening in the world that you can bring in and help create a fairly interesting space.

Skift: Right.

Danziger: And in Jeff’s brand, Jeff [Wagoner] runs the Trump [Hotels] brand. Again, we don’t have two hotels that look alike either. But they are a little bit more standardized in that you know you’re at a luxury hotel and you know you’re at Trump, and it may have some design features that are similar. But he differentiates that on the service profile, which is amazing. Even in this last year, he was saying earlier, which has been an interesting year for all of us. Our guest satisfaction scores are above where they’ve ever been. Our employee satisfaction scores are above wherever and our hotels are doing really well. That’s pretty neat in tumultuous times.

Skift: Right. I know the lifestyle space in particular is a very crowded part of hospitality. If you had to describe Scion, how would you describe it in a way that makes it different from all the other lifestyle brands out there?

Danziger: I’m going to tell you why we created it. We created it for two reasons. One is, as a hotel company, we were a one-branded company, therefore we never had an option to say, “Can we do something else?” So, we wanted to be in a different space, as well as, Trump. I believe, this kind of hotel should not be run by big companies. It needs to be a non-branded kind of experience for this user. And when somebody like Kimpton was Kimpton, it was flexible and creative and inventive.

It’s my experience that as larger companies get into spaces that they don’t have the same mentality to be able to do a great job in that because they’re very corporately set up. The first thing that makes us different is because we’re not some big company that says, “Here’s the book on the brand, this is what you have to do.”

We will do in every market what’s right for that hotel. Not because it’s brand standard. That’s the 50,000 foot [view] on why it’s different, because it’s not part of InterContinental, it’s not part of Starwood, it’s not part of Marriott, it’s just us doing it.

Flores: So, I think, the other … The second half of that, I mean, it’s just a continuum right? I mean, everybody has a lifestyle. It’s just this ginormous continuum. What does that mean? And so, we feel that the, let’s say, the focus on the experiential is something that we can do really well and is a very specific type of life style product that we’ll be bringing to the market. So, you know, some are very heavily design oriented, and others, you know, more like what we’ll be doing in Scion will be more experientially focused. So, I would say when you look at it along a spectrum, it’s not actually that crowded because everybody’s got a style and Scion will appeal to, we think, a very broad variety.

Skift: Another topic I wanted to talk to you about is corporate travel. A lot of the hoteliers I spoke to here have said, “This is the year that corporate travel bounces back.” So I wanted to ask you about the two different types: group and then also transient. Have you seen group bookings go up or down in the past year? What has business travel been like for Trump Hotels?

Danziger: There will always be years where each segment, some are up, some are down, for lots of reasons. The job of a hotel company is to still step back though and say, “In this market there are still X tens of thousands of people traveling. So that segment might be off, but the job is to go out and find somebody who’s traveling to the city. You can’t just sit back and say, “Oh, woe is me, group’s down.” Go find the business, it’s going somewhere. Why not your place? And that’s the attitude that we have of go out and find it.

Skift: I was thinking a little bit to the point that you made earlier about the way that the press handled the situation with that Hipmunk survey and the perception that foot traffic or bookings at the Trump Hotels were down. Is that a concern going forward as well? Do you see an impact in or with the Trump name impacting business, or bookings going forward? Have you seen that?

Danziger: No, because we’re doing well. It’s just unfortunate that our employees and our people have to be distracted to deal with something that shouldn’t have to be dealt with, because it’s not factual. But people who understand our brand and us, they’re not affected by that because as an example, they aren’t coming through Hipmunk, so they could care less what Hipmunk’s story says.

It’s more of a problem for us to deal with internally. To not have people think, oh is that true? Because, when people read that they wonder if it’s true. It doesn’t matter who reads it. But users of the Trump brand, they love it for the reasons we said. We got great product and we got great people. That’s what the Trump user expects. The only way we’ll lose business is if we ever let down doing those things that they expect from us.

Skift: The real reason I think about that though is there were those leaked documents that came out earlier this week from the GSA [General Services Administration] about the monthly profits from the new D.C. hotel. And it reported that the hotel was $1 million off of its projected profits. Do you think that the election maybe had an influence?

Danziger: First of all, the people should understand the difference between a soft opening and an opening. And they should understand the difference of a hotel, like any business, ramps up. I don’t know that it was a story worth telling. It’s a business that softly opened. We didn’t even have all the rooms yet completely open last week, right. And we were still putting in a floor of rooms. So, there’s no story there. It’s an opening and a ramp up. I’ve been in this business 46 years. I’ve never seen one open to a full house. So, I don’t know why stories are created and invented, that is a really non-story in the real facts of the business.

Skift: Right. Like what you were saying, putting it more into that hotel management perspective, this is why those numbers are the way they are.

Danziger: That’s what people should do. If they were going to report facts, then they should report the facts of the business in the contents of the statement they are going to make within the context of a business, that’s all. That’s fair. And if we were open three years and we were ramped up, and someone said, “Oh, there’s a million dollars.” That’s a fair story to say, “How come?” But even the fair story would be, how come? And then get the answer to that because there may be one.

Skift: Right.

Danziger: And that’s what doesn’t appear to be happening, but listen again to the extent that it’s politics or political. That’s a political issue to the extent that it’s a business issue. That it should be fairly reported as a business issue.

Skift: What do you see as the biggest challenges and opportunities in the year ahead? I know this is a very general question, but I’m thinking specifically in the luxury space and specifically in the lifestyle space.

Jeff Wagoner: When you look at challenges, I think for us, it’s really continuing to stay fresh as a brand. Continuing to identify customers for the brand. We’ve got, as Eric mentioned earlier, our customers are happy today, our associates are happy, our hotels are performing well. So now it’s how do we continue to have that evolution occur so that we continue to stay very relevant, that our satisfaction stays strong? You’re always competing against other brands that are out there today in markets that we’re in. For example, in New York City, there are several luxury hotels that are opening up, so we’re going to be competing against new hotels. I think we have to stay smart, and sharp, and continue to identify new customers to come into the brand.

Danziger: I’ll tell you what I say all the time at every panel is people have heard it’s the 7,000th time. I brought it up yesterday even though I wasn’t asked because this is not the hotel business, it’s the hospitality business. And when you hear what we’ve just talked about, we’ve talked about the difference is our people and how they deliver the service. The challenge of our company and the industry is to continue to attract the kind of service, passionate, talent. I don’t deliver hospitality to any customers. I better find a way to deliver it to our people who in turn deliver it to our customers.

But if the industry isn’t an appealing one for people to join or to have a career with, it’ll never be able to long-term execute any service related strategy, right. So, a big challenge is, and here’s an example, I speak at a lot of colleges. I go to Cornell and Boston University, and all that. I always will start of by saying, “How many of you here … You’re in the hotel business,” because let’s say you’re in Cornell, “How many of you want to be on the real estate side?” And almost every hand in the room goes up. “How many of you want to be in hotel operations?” And there might be two.

My point is, hotels are run by human beings and people. If we don’t have the interest in tomorrow’s leaders to be in the operating piece of the business, that’s a challenge to the industry, and that affects every brand because you’re delivering service. You have to have people who say, “What can I do for you today?” “How can I help you?” That’s my challenge, to run a business.

Skift: Is there anything in particular that Trump Hotels is doing to try to get the next generation of …

Danziger: You have to be the kind of company that does what it says. For example, this GM that Jeff mentioned in Central Park, she started as a front desk clerk, or a reservations clerk or something, so you have to be the kind of company that recognizes its people and gives them the opportunity, so people say, “Hey, I can do anything at this company and I have no limits to what … I love that, we work really hard at giving people the opportunities that they never thought they could have.

In the creation of a new brand, that’s even more exciting, because it’s people in this brand that could go work in that brand and then vice versa, when she’s [referring to Flores and Scion] up and running. Those are the kinds of things that have, you know, are meaningful and they’re treated well. Well you know, I’m sure, you’re in the reporting business, so we know that most people leave a job because of their boss. If we’ve created the right bosses, then we’re helping make this a great environment for people to work at.

Skift: Everyone in the hospitality industry has Airbnb on their minds in some regard. I know the luxury and lifestyle spaces like to stay out of the conversation because they always say, “Our customers are very different, what we offer is very different” but there are reports Airbnb will be launching a more luxury product this year …

Danziger: I can give you a real easy answer.

Skift: What?

Danziger: Who cares? I don’t care. Why are there 297 different mix of cars? Why is because somebody will find a niche for some buyer of a car. Well OK, if there’s a niche for some person who wants that fine, but that’s not a great threat to us. It’s just our job to be a service orientation which those alternative places have none of that. So is there a niche that might want to stay at that? Sure.

But generally, somebody in the luxury space wants luxury and that includes things like an attaché and people who will run out and get … You don’t have anybody to run out and get you anything at one of those.

If you need a shirt, we’ll send somebody to Bergdorf and get a shirt. I really think, again, in our space and same kind of thing with them, you’re not staying just for the room and the price, you’re staying for everything else so who cares.

Skift: Any message that you really want the hotel industry, or the travel industry to know?

Danziger: We’re a hotel company that runs hotels, just look at us like that. There’s a different Trump that’s President. This Trump organization runs hotels.

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Tags: ceo interviews, trump, trump hotels

Photo credit: Trump Hotels CEO Eric Danziger wants to emphasize his company's growth and expansion, while maintaining its distinction from Trump the President. Trump Hotels / Trump Hotels

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