The scrutiny couldn’t be greater. The noise – both pro and con – couldn’t be louder. But for Trump Hotels’ indefatigable CEO Eric Danziger, the charge is “march on.”
“We deal with the noise to the extent we can, and we let our work speak for itself,” said the hotel lifer with his own strong personality that might be the best suited to lead a company whose founder just happens to be, perhaps, the most polarizing figure in the world and the president of the United States, Donald Trump.
Danziger was quick to dismiss all the ongoing alleged conflicts of interest, saying that Trump is completely hands-off his hotel business and that the company is meeting all its legal obligations. He just as quickly said how much he embraces Trump’s sons, Eric and Don Jr., who are in charge of the Trump Organization and its hotel platform since their sister, Ivanka, took a role in the White House administration.
“It’s fun to actually deal with some of the challenges, and this may sound Pollyanna-ish but not everybody could do this,” said Danziger, who has been in the role since August 2015, is in the process of rolling out a lifestyle brand introduced last fall, Scion, and is on the cusp of making news by introducing a mid-market franchise concept without the family name. “So a rallying cry for me is, ‘This is hard. It’s never been done. You and your teams are the ones doing it and the only ones who could do it.’ That’s a leadership 101 lesson: to inspire your troops to go beyond, and I always love doing that regardless of the environment that might be affecting us.”
That environment includes barrages of bad press and what even he called “fake news,” especially regarding the Washington, D.C., hotel where accusations of conflicts and illegalities are a constant, not to mention protests in front of Trump hotels elsewhere, potential development partners who misspeak, and so on and so on.
“Obviously, the first question anybody ever asks is how’s it going with your former boss being president,” Danziger said. “There is no connection. I don’t talk to the president and he doesn’t call me. He didn’t ask me my opinion on Russia and I didn’t ask him about something we might be doing like a new brand. The boys are in charge and so it’s a very creative, thoughtful environment.”
He was also quick to dismiss, despite rumors to the contrary, any new deal activity outside the United States, an edict launched and, he said, held to since Trump took office.
Danziger said the portfolio is performing well, with most hotels quite a bit ahead of the previous year and in a couple of cases having record years. This statement comes despite recent news that a high-end sushi restaurant inside the Trump SoHo in New York was shuttering as a result of declining business.
In the next breath, Danziger added that some hotels were affected by protests but said it largely went away after a few months. “Virtually every hotel is up significantly in transient business year-over-year for 2017,” he said. “Where there has been a decline has generally been in some of the group categories in some of the hotels… Maybe the CEOs say, ‘not this year; let’s go back there next year. Let’s not have the controversy.’ That’s very different than people saying, ‘I’m never coming back to this joint.’”
Ever the optimist, Danziger continued by saying that is just part of running a business. “You can’t put your head down. You’ve got to keep it up and say, ‘Let’s go find more business.’”
Short-sighted?
Surprisingly, Danziger said his team has not retained an outside crisis management firm or brand strategist to help them through the constant chop, the latest being anti-war protests outside the Trump hotel outside Las Vegas and two instances of alleged arson at the same hotel. Danziger goes as far as to argue that the “Trump Effect” is a positive influence on the hotel brand.
“The man was elected in November, two weeks after we announced the launch of Scion, and we have 32 deals (at press time, none had been finalized, yet Danziger said he expects at least one to open this year). So it certainly would be hard to argue it’s a negative impact. It’s also hard to argue it’s a positive impact… For things that matter to this business – growth, employment and retention – there is no impact.”
The company is relying on its internal and external public relations teams to handle most media queries and to craft responses when necessary, but no move has been made to use outside firms to soften the image of the hospitality company.
When asked about measuring data to keep tabs on the brand image, Danziger said the organization is not metrics-focused. “We get clips of everything written but we are not out gauging because ultimately to me the gauge is the bookings we get. Did we get a booking? Did we get a customer? Are they happy with us? Is their intent to repeat? Those are the metrics that we care about in the hotel business,” he said.
Asked about Trump Hotels’ decision not to engage brand strategists or crisis management experts, Jay Byrne, president of v-Fluence Interactive, a public relations, government affairs and issues management strategic consulting group, said, “The key thing to understand for any organization or individual facing a negative reputation-influencing situation is people think and act differently in a crisis – typically not to their own benefit.”
More specifically in reference to the Trump Hotels, Byrne opined, “The simple facts are this is a brand facing ongoing protests (even if some days management may feel like they are diminishing), looming high-profile court cases, enhanced media scrutiny looking for any reason to write headline-grabbing stories, and that many diverse political interests currently see their brand as an opportunistic foil for any number of advocacy issues to exploit… Not engaging professional reputation and crisis management is not even pennywise, it’s simply pound-foolish.”
This may not be a “hotel” reputation management challenge as much as a political one, Byrne added, “but all the more reason then if you aren’t in the business of reputation management with specific expertise in the political aspects to get that type of counsel.”
The rigor
What has changed for Trump Hotels, according to Danziger, is the vetting process it goes through in all aspects of its business to avoid conflicts.
“We’re choosing to be more conservative than not in terms of reviewing bookings, reviewing sales strategy, in terms of passing on deals that are even remotely questionable,” he said. “We’re going to do this because it’s better to err on the side of caution until we figure all this stuff that’s never been figured out.”
Danziger added that he reviews background checks on everybody who wants to develop a Trump hotel, including where the money’s coming from and their personal past. “In everything we do from new development to the existing operation of the business, we are being as conservative as possible to ensure that we do the right thing and that just becomes – you’ve got to do it,” he said.
On the deal side, Danziger referenced Mukemmel “Mike” Sarimsakci, who was promoting plans to launch a Scion hotel on a vacant lot near Dallas City Hall without having finalized the deal. “So we told him we aren’t doing it.” And he points to another developer who was raising EB-5 money and announced a deal in Austin, Texas. “We told him there’s no deal,” Danziger added. “We wouldn’t have done it in our process with EB-5 money.”
The scrutiny is, perhaps, making it difficult for the Trump Hotels development team to get deals to the finish line, which may account for the lack of closed Scion deals, and the headlines generated by the president are likely, in certain cases, causing hesitation on the part of potential development partners. “Either I can convince them it’s a separate and distinct business, or if you think that calling yourself Scion or ‘brand three’ is going to have a negative effect and I can’t have you see the reasonableness of why it won’t, then, you know, we don’t belong with you,” Danziger said with a bit of defiance. “But, you know, we’re a private company. We can grow smartly instead of being driven by public companies that have a need to grow. If you aren’t for us, there will be somebody else who is.”
So the development beat goes on for Trump Hotels, and Danziger said the group will any day now announce a new mid-market franchise brand that he calls “pure Americana” with a name already trademarked. For the luxury Trump brand, which had to back away from deals outside the United States and recently deflagged a property in Rio de Janeiro after a fallout with the developer, Danziger said there are two very real opportunities in the pipeline, which explains the bigger focus on Scion and the new mid-market franchise play.
“You have to learn to battle through and make things happen,” Danziger added. “If I felt myself at all capable of anything, it is the core values of leadership. I’ve always said my job is to lead and not manage. I want to lead people to get from here to there no matter whether we have to go over the wall, around the wall or through the damn wall.”