General Services Administration, which oversees Trump Organization lease, posted unredacted financial documents online
PHOTO: EVAN VUCCI/ASSOCIATED PRESS
Donald Trump’s hotel in Washington, D.C., raised its rates in the months after he became president from what it had planned to charge, helping the facility to outperform the company’s expectations, new financial documents show.
The Trump International Hotel, in the opulently renovated Old Post Office near the National Mall, brought in about $18 million in revenue in the first four months of 2017, in part by charging room rates that were higher than their budgeted prices by around 60%, according to documents viewed by The Wall Street Journal.
From January to April, the average daily room rate was $660.28 compared with $495.91 for comparable hotels, according to the documents. The hotel had projected its average daily rate would be $416.
The hotel made a profit of nearly $2 million during that time period after paying rent and other expenses, despite budgeting for an expected $2.1 million loss.
The Trump Organization declined comment about the financial reports beyond saying it is proud of the success of the hotel.
The hotel files its financial records monthly to the General Services Administration, which oversees the Trump Organization lease. The records include what the company expected to see for the period and the actual results.
These records are later posted on the GSA website, but the financial information is redacted. However, the GSA on Thursday posted unredacted versions of documents containing information on the first four months of 2017. The agency took the documents down later that evening.
The Trump Organization signed a contract in 2013 with the federal government to lease the historic post office and renovate it into an upscale hotel near many of the capital’s landmarks, including the White House. The hotel opened not long before the election to fanfare, but after Mr. Trump’s win it became a source of controversy. Some ethics experts pointed to it as a symbol of the difficulties that Mr. Trump has in separating his private business interests from his government responsibilities.
The financial records bolster concerns that the hotel could be used by lobbyists, foreign governments and others with business before the White House to try to be seen as favorable by the president, said Walter Shaub, who resigned in July as director of the U.S. Office of Government Ethics after clashing with the White House, in an interview Friday.
“The fact that the profit is coming from inflated room rates that exceed even the geographic area increases the appearance that they are profiting from the presidency,” Mr. Shaub said.
Mr. Trump and the Trump Organization have denied any ethical issues. Mr. Trump has said he won’t be involved in running his businesses and has left them in the hands of his two adult sons and another executive.
The documents posted by the GSA offer the first detailed look at the hotel’s financial performance in the months after Mr. Trump became president.
In a letter to the GSA earlier this year that was released to the public, several Democratic representatives offered hotel financial data for September and October. The representatives said they received the data from the GSA.
According to the representatives’ data, the hotel underperformed its own expectations, earning $1.3 million in revenue in September and $2.8 million in October.
The hotel’s fortunes turned this year: Revenue rose to $4.7 million in April, the new documents show, above the $3.9 million revenue projection for the month.
The projections likely were drawn up in for the bid in 2012 and were called unrealistically high by competitors at the time, said Dan Tangherlini, who ran GSA when the Trump lease was finalized.
Revenue for new hotels generally increases over time after opening, but the fact that hotel rates were substantially above the budgeted amount and above area rates indicates that Mr. Trump’s presidency likely played a role in the performance.
The Trump Organization also doubled its membership initiation fees at its Mar-a-Lago golf course earlier this year, where Mr. Trump frequently vacationed during the winter and spring. Golf course officials have said the rate increase had been planned before the presidency.
Although new, the Washington hotel is already known as a D.C. power center, drawing visits from government and business officials. That is likely reflected in the hotel’s food and beverage revenue of $8.2 million for the first four months of the year. Food and beverage accounted for 46% of the hotel’s revenue for the first few months of the year, higher than normal for a hotel without a convention center attached, according to hotel industry analysts. Food and beverage revenue was about 37% higher than the budgeted amount.
“It appears that the hotel has been perceived as a place to be seen and have power lunches and that sort of thing,” said Sean Hennessey, a hotel consultant. “The numbers on the [food and beverage] side indicate it has that kind of cachet.”
Nonetheless, as is typical at hotels, the restaurant business was far more costly to operate, which meant that room rentals made up the bulk of the hotel’s profits.
The hotel’s occupancy was lower than similar hotels. Ryan Meliker, a hotel analyst, said that the occupancy and room rates “argue that there are not a lot of people willing to stay at the Trump, but those that are willing to stay there are not price conscious in the least bit.”
The hotel pays about $250,000 a month to the federal government in rent.
Updated Aug. 11, 2017 4:35 p.m. ET