Donald Trump faces financial struggle with costly hotel investment
- Donald Trump invested over $200 million in the Trump hotel, which opened in 2016.
- The hotel struggled financially, recording losses for the majority of its early years.
- The launch of Don Jr.'s private club suggests the Trump family is shifting focus to more profitable business models.
In 2016, the Trump hotel opened after a significant investment of over $200 million from Donald Trump. However, the hotel's profitability proved challenging, leading to net operating losses in three out of its first four years. Internal financial documents disclosed in 2021 indicated that the hotel failed to meet expected occupancy levels and projected room rates, causing skepticism among analysts regarding its financial performance. On the other hand, the hotel’s food-and-beverage segment showed potential, making it a slight bright spot amidst the financial difficulties. Meanwhile, the Trump family sold the hotel in 2022, paving the way for new ventures, like Don Jr.'s Executive Branch private club, which is expected to capitalize on relationships and a profitable membership structure to generate substantial income. Given past struggles, the Trump family seems to have recognized the profit potential of private clubs, reflecting on Donald Trump's assertion regarding the positive impact of his presidential campaign on the business. With a notable membership fee of $500,000 for founding members, it appears there is significant interest in this new venture, suggesting that it will likely be more lucrative than their previous hotel investments.