It’s easy to forget that President Trump has his roots in commercial real estate. After all, his past activities in the industry are obviously overshadowed by the fact that he now leads the most powerful country in the world.
But that hasn’t stopped the Trump Organization from continuing to pursue CRE endeavors.
Trump’s company recently announced that it is starting a hotel chain called American IDEA. The concept, planned to launch in the Mississippi Delta area, targets midscale consumers and will reportedly concentrate on promoting local flair, coupled with “neighborly service.”
Though there are only three locations currently hammered out with partner Chawla Pointe, a family run organization, and MMI Hotel Group, the firm that runs its Chawla’s current portfolio, its sounds as though the Trump Organization has big plans for American IDEA. Eric Danziger, chief executive Trump’s hotel division, told The New York Times that there could be hundreds of American IDEAs eventually. At first, the company plans the concept for small and mid-sized towns that have a strong base of Trump supporters and a lack of midscale hotel options beyond lower-end travel facilities. The first three deals represent renovations of existing hotels under the Holiday Inn and Comfort Inn banners.
But is there room in the hospitality sector for a new concept?
It seems like there could be, according to JLL’s 2017 hospitality outlook. The firm reports that last year sported record numbers for occupancy, despite the fact that more product is coming online. While growth is negative in some major metro areas, such as New York City and Miami, secondary markets are seeing an uptick. The report specifically points out some of Trump’s presidential policies, such as lower tax rates and infrastructure investments as being favorable for the hospitality sector.
The lodging industry’s first quarter this year got off to an extremely strong start, according to CBRE. Hotel demand rose 2.8 percent during the period, and occupancy hit 61.1 percent, the strongest first quarter over the last 30 years. R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research, said that his firm is “projecting demand to outpace supply once again in 2017.” The firm also noted that demand significantly outstrips supply in smaller towns.
So, glancing at the overall state of the hotel industry, it looks like it could be a good time to launch a new hotel chain catering to the demographic targeted by Trump’s company. Of course, a lot depends on the execution of the concept and finding the right locations. And having the Trump name attached to the chain, even if it’s not emboldened in big letters on each facility, could create a niche for certain consumers who are supportive fans of the president.