Is it the politics, or are gold-plated faucets not as desirable as they used to be?
While Trump’s brand and marketability have boosted his presidential run, a collection of data points – including geolocation data tracking foot traffic to his hotel establishments – suggests the campaign has hurt his business.
His companies have experienced some short-term gains, since the campaign spends on them as well, but most outside data sources see major risks for the brand’s long-term standing. No Trump company is publicly traded, so exact figures aren’t available.
Trump condos went from selling at nearly a 7% premium against their competitive set (a high-end residential market occupied by a limited selection of other hospitality brands, like Ritz-Carlton and the Four Seasons) one year ago to having no additive value this year, said Nela Richardson, chief economist at the real estate brokerage Redfin.
“The luxury market has been on shaky ground,” she said, “but you would think the premium attached to that name would still exist even if luxury condos were selling for less.”
Richardson speculated that international sentiment caused the rate drop, since the luxury condo market sees a lot of Chinese and Canadian buyers with strong pro-trade feelings, which clash with Trump’s political positions.
Location And Booking Data Tell The Story
Foursquare recently compiled data tracking its user check-ins at Trump hotels and golf courses, showing a dip in traffic to those properties. Notably, Foursquare’s data found that Trump’s blue-state hotels (in Hawaii, New York and Illinois) fared significantly worse than hotels in more politically competitive states (like Florida or Nevada).
Trump’s hotel business has seen its biggest drop among women: Female visitors are down 30%, compared to just 3% for men, according to Foursquare.
Trump Hotels have lost almost 60% market share compared to last year, according to year-to-data figures from the online travel-booking site Hipmunk.
While those location and online booking examples are illustrative, they’re far from definitive.
“Hipmunk users tend to be urban millennials, and so our own demographics come into play here as well,” the company acknowledged in the blog post on its findings.
“Urban geographies are slightly over-represented in our panel,” cautioned Foursquare in a Medium post.
But even if the most extreme consumer reaction is contained in certain demographics or groups, it tends to be the people on whom Trump’s properties have relied most.
A long-running consumer survey from BAV Consulting, a firm within WPP’s Young & Rubicam, found the biggest downturn for the Trump brand among those who make $150,000 or more per year, followed closely by those making more than $100,000 per year. BAV President Will Johnson wrote in Politico Magazine in January that the Trump brand’s association with traits like “prestigious” and “upper class” have dropped by as much as 50% with high earners.
Ad Trends
Data from the digital ad analytics firm Pathmatics shows a roughly inverse relationship between Trump Hotels ad spend and money spent on candidate Trump’s digital ads – but doesn’t support easy conclusions.
When Trump’s campaign had its first spending spike right after he announced his candidacy, the hotel company’s spending dropped to almost nothing. In the six months between his announcement and the beginning of the primary season (when Trump’s presidential campaign wasn’t spending on ads), Trump Hotels’ online ad spend jumped to a record high. When the candidate’s spending spiked from February to April (Super Tuesdayand the meat of primary season), hotel ads fell off in turn, only to shoot to higher highs when the campaign resumed its practice of not spending online.
Beginning in July, when the Republican National Committee (RNC) began putting money and infrastructure into Trump’s candidacy, campaign spending took off. Trump Hotel advertising has simultaneously tailed away to almost nothing.
Prior to the Trump political run, Trump Hotels’ online advertising has ebbed and flowed going back to 2012, the earliest time for which Pathmatics has data, but has followed no apparent pattern.
“Our advertising campaigns are driven by our marketing strategy and serve to both drive brand awareness and business to our properties,” a Trump Hotels spokesperson said about the company’s online spending pattern. “We continue to enjoy strong performance across our portfolio.”
Trumped Up
Trump’s campaign can also benefit his businesses. Federal Election Commission filings show candidate Trump spending on corporate Trump services in unprecedented ways: with some $6 million going back to Trump’s airline, corporate payroll and hotels (which isn’t a breach of campaign finance law as long as the businesses charge market rates).
It may already feel like long ago and a galaxy far away, but it was only in March that Donald Trump, then in a heated primary race, assembled a news conference at his Doral golf course and hotel in Florida, flanked by what he claimed was a selection of his products – Trump water, Trump wine, Trump steaks, Trump magazine – to demonstrate the strength of his brand, and thus the strength of his candidacy.
At the time, Doral had just hosted the PGA World Golf Championship, a major event that’s been played at the resort since 1962.
Holding a major PGA event is one of the key brand drivers in the golf course/hotel business, said Tom Stine, partner and co-founder of the golf industry data firm Golf Datatech. “People want to play on the courses where the best players play … and that fills a lot of rooms for (brand-name) golf resorts,” he told AdExchanger.
The PGA decided to relocate the tournament to Mexico next year, after hinting in 2015 that Trump’s political statements were turning off viewers and sponsors.
“The decision here was based on the reality that we are not able to secure sponsorship for next year’s WGC at Doral, or for years out for that matter,” said PGA Commissioner Tim Finchem in a statement.
However, NBC’s ratings from this year’s World Golf Classic Championship at Doral were 22% higher than in 2015, and “the most-watched PGA Tour round on NBC since the Players Final Round in May 2015,” reported Cynopsis Media.
“The PGA Tour has had a wonderful history in greater Miami and at Trump National Doral,” said Finchem, “and we remain interested in returning when the time is right.”
