Seat 2B By Joe Brancatelli
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Trump's Travel Travails
March 3, 2016 -- After a series of primary wins on Tuesday, Donald Trump is the man to beat for the Republican Party nomination for president. And as you surely know, Trump voters are enamored of his carefully burnished reputation as a businessman supposedly worth " in excess of TEN BILLION DOLLARS." But like his all-caps boasting on Federal Election Commission financial forms, Trump's record doesn't translate to the travel industry. His travel forays over the past 40 years have been a strange brew of missed opportunities, dreadful timing, questionable financial maneuvers, swaggering braggadocio, tear-down-the-competition innuendo and outright failure. Herewith a tiptoe through Trump's travel tulips. By the way, Trump once announced a tulip-shaped hotel in Dubai. It was never built. 1977: The art of the Trump Donald Trump's introduction to the world essentially came through travel. He took a $1 option on a down-at-the-heels hotel next to New York's Grand Central Terminal. Armed with a clutch of tax abatements, he and his partner, the publicity-shy Pritzker Family, converted the property into the 1,400-room, $100 million Grand Hyatt. The building was always controversial — the glass facade and ostentatious, multi-level marble lobby were brutal and brassy — and the partnership was always troubled. Years of private conflict and failed arbitration erupted into a spate of lawsuits in 1993. Trump complained the Pritzkers, who built the global Hyatt chain, were bad partners. In their defense, the Pritzkers simply urged people to read Trump's boastful book, "The Art of the Deal." Three years later, the Pritzkers bought out Trump for $140 million. That also freed Hyatt from a New York City non-compete clause. Now a public corporation, Hyatt operates eight Manhattan hotels, including the Grand Hyatt, which recently received a tasteful renovation. Trump's own chain, Trump Hotels, has two New York hotels. 1982: The Chapters and the casinos When critics claim Trump has declared bankruptcy four times, they refer to his companies' involvement in the Atlantic City casino industry. While it's tempting to say Donald Trump is someone who couldn't make money running casinos, the truth is more complicated. Trump publicly boasts he took money out of the casinos to fund other projects and left banks, bondholders and other investors holding the financial bag. And, of course, his foray into "the chapters," as he described the casino bankruptcies during a presidential debate, is controversial. Trump is out of the casino business now and Atlantic City is a mess. 1988: Pwnd by The Plaza Trump bought The Plaza, the New York icon facing Central Park, for more than $407 million in 1988. He put his first wife, Ivana, in charge of the then 80-year-old hotel and its renovations. The results? Chintzy, by most accounts, since Trump favored glitz over the charm that made The Plaza home to stars like Cary Grant and one of the scene-setting backdrops of his 1959 movie, North by Northwest. Trump was forced to surrender the hotel to his bankers just a few years later to avoid personal bankruptcy. How much had Trump overpaid for The Plaza in 1988? A partnership purchased it in 1995 for just $325 million. With Trump gone, however, The Plaza soared in value, selling a decade later for $675 million. 1989: Shuttle to nowhere In 1989, Trump purchased the Eastern Air Lines Shuttle, pioneer of no-reservation, hourly flights between New York, Boston and Washington. The Shuttle had once been a cash machine, but difficult economic times, labor strife and competition meant it was a shadow of its former self. As long-time Shuttle watcher Barbara Peterson explains, Trump overpaid ($365 million) for a shabby fleet of aging Boeing 727s and a decimated market share. Trump tried to cut costs by advocating a blatantly unsafe ploy (using two pilots on planes that legally required three), wanted to smear his main competitor (Pan Am) with unfounded safety accusations and instituted "upgrades" that stressed useless flash over practical improvements. Adverse market conditions and the huge debt he incurred doomed the operation. He abandoned the airline to lenders after defaulting on $380 million in loans. In 1992, the banks brought in US Airways as part-owner and manager. The US Airways Shuttle was folded into American Airlines as part of last year's merger. 1989: American horror story Trump tried to buy American Airlines in October, 1989. Maybe. His $7.5 billion bid for what was then the nation's most powerful and successful airline may have been nothing more than an elaborate greenmail attempt since he had amassed about three million shares of the airline's parent company. He never had funding for buyout offer nor, apparently, the $1 billion in equity he claimed he was willing to contribute to the deal. Besides, American's feisty boss, Robert Crandall, would have been a formidable opponent in a street fight over the carrier's future. Trump's plans were effectively derailed days later by the Friday the 13th market crash. Ironically, that crash was caused by the collapse of the leveraged buyout of UAL Corporation, owner of United Airlines, American's closest competitor. 2006: Trump, the travel website As numerous financial accountings of Trump's holdings reveal, he mostly makes money these days by licensing his name for use on products. Most -- board games, steaks, bottled water, vodka, mortgages -- have been hilarious, ego-driven flops. One from the travel category: GoTrump.com, a website meant to sell hotel rooms and travel packages. When he announced its arrival in 2006, Trump promised to cut you in on "the art of the travel deal." He also promoted "his first-ever email address." GoTrump.com was based on a booking engine provided by Travelocity.com and came and went in a New York minute. Today the name is owned by a Chinese Internet firm that offered it at auction earlier this week for bids as low as $215. The Present: Trump Hotels When Trump called for a ban on Muslims, I pointed out that Trump Hotels was still aggressively courting Muslim business with an Arabic-language website. I also mentioned that Trump Hotels are well-managed and offered high-quality service and accommodations. Yet the model Trump uses for the buildings is endlessly controversial. In most cases, he licenses his name to a developer who builds a condo-hotel property. Many of those buildings are mired in controversy and bound-up in lawsuits. Others have been abandoned, including properties in Tampa and Mexico. Some others, as in Fort Lauderdale, were finished, promptly enmeshed in legal difficulties and eventually opened as part of more traditional hotel chains. Whenever things go badly, as in Baja, Mexico, Trump invariably blames the developer who paid to use the Trump name.
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