It turns out the G-7 summit next year won’t be happening at the Trump Doral resort after all. Consternation erupted last week when it was announced that President Trump essentially awarded himself a government contract to host the event.
A great deal of the commentary that followed (that’s been a nagging theme throughout much of his presidency) is that Trump is attempting to monetize the presidency by enhancing his brand and business, and decisions like this serve as an emblem for it all. But an objective assessment of the actual dollars and cents behind it shows that either Trump is really lousy at this, or he is attempting to do no such thing.
There is a soft power element to the G-7 Doral decision that wouldn’t have shown up in the bottom line: You can’t measure influence on an income statement. However, the claims of fiscal enrichment and a grandiose marketing ploy are things we can quantify much more objectively.
The quickest to ascertain, and the one Trump is most sensitive to and prone to brag about, is his net worth. It has plummeted from the $4.5 billion it was in 2015, before his campaign announcement, all the way to approximately $3 billion today, something that can largely be attributed to Trump’s diminishing property values. There has been a precipitous 33% fall since the decision to go from citizen Trump, to candidate, and then president.
Trump Organization revenues have been under substantial pressure. Total hotel revenue is down by approximately $30 million and Trump Tower condo occupancies have fallen by one-third. Top-line figures have fallen by 9% at his golf resorts, including declines at hallmark properties in the Bronx, Los Angeles, and West Palm Beach. One of Trump’s crown jewels, Mar-a-Lago, has experienced a nearly 10% revenue reduction, with fewer new $200,000-per-year memberships being sold. The invasive security, metal detectors, and bomb-sniffing dogs that are now features of these resorts apparently don’t do much to enhance the luxury experience.
Since 2014, operating income has fallen some 27% at the flagship Trump Tower on 5th Avenue in Manhattan. There are numerous vacancies both in living and retail space. Brands such as Nike have foregone decisions to set up shop in the prominent tower that was the location of the seminal moment where Trump first announced his candidacy.
It’s not all red ink however, at least when viewed through the lens of the last two years. One of the strongest performers has been the property literally just down the street from the White House: Trump International Hotel in Washington, D.C. In what’s become a hot spot for GOP gatherings and accounts for almost 10% of Trump Organization revenues, the hotel generated nearly $41 million in 2018, a modest 1% year-over-year increase from 2017. Trump’s golf course in Scotland has experienced a 15% gain from $20.39 million to $23.4 million during the same span as well.
Trump National Doral, the biggest revenue-generating asset Trump owns and the heart of the recent controversy, is a 643-room Miami leviathan that has seen revenue increase by 2% to roughly $76 million over the last year. This is, however, down from the $116 million it was producing in 2016.
The Trump Organization is a private company and much of the reported information is extrapolated from financial statements that often provide broad ranges and not the precision of public disclosures. However, what’s clear is this is a company that is currently on net shrinking, and not trending in the same positive direction as the U.S. economy. Even the swag component of his business (MAGA hats, eponymous alcohol, ties, etc.) has fallen from $23 million in 2015 to just $3 million today. In total, Trump’s income has declined from the projected $615 million it was in 2015 to $434 million in 2018: a whopping 30% reduction over the last three years.
Much of the commentary on Trump’s business and the presidency feels something like Schrodinger’s corruption: Trump is both enriching himself with his office while simultaneously growing poorer. Most of his diminishing returns are pretty directly a result of that very office, and it’s helpful to take a step back from all the headlines and see what’s really under the financial hood when making such claims about a sitting president.
Jason Orestes is a former Wall Street analyst who focuses on contemporary political developments affecting economics, markets, and culture. His financial commentary can be found on Jim Cramer’s TheStreet, where he is a regular contributor, as well as Seeking Alpha.
