For Trump Hotels' CEO, noise over Dallas deal a microcosm of the job

A rendering of the proposed Dallas Scion, which was to have been developed by Alterra International.

I can't imagine Eric Danziger signed on for this. The cheery CEO of Trump Hotels was in San Antonio this week at the Asian American Hotel Owners Association's annual convention and felt right at home on a CEO panel, where he got to discuss his franchise pedigree, all the while shadowed by the specter of his famous boss, who now calls The White House home.

Deflection has become as much a part of Danziger's arsenal as brand development. “We work very hard to separate business and politics. We share the same name but [Trump’s] not involved,” Danziger told the audience during his AAHOA panel.

As hard as he might try, it still follows him wherever he goes. And that's just bad for business.

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Dallas Disorder

The latest PR ordeal is over a speculative deal for a Scion hotel in Dallas. Scion is an upscale, lifestyle brand Danziger and his team introduced last year, an obvious pivot from the Trump name. But even without the Trump name, it still gathers the type of scrutiny that Danziger never would have received when he was leading such hotel companies as Starwood, Wyndham or, most recently, Hampshire Hotels. Imagine every Howard Johnson or Westin signing coming under such harsh public glare.

Rarely has one deal gotten such ink—unless it's this New Yorker story on Trump's scuttled plans for a hotel in Azerbaijan. In a story posted April 13, The New York Times devoted 843 words on a story entitled "Trump Organization Drops Plans for Dallas Hotel With ‘Turkish Trump.’" (The New Yorker story clocked in at more than 8,000 words.) The piece is a rebuttal to a Dallas Morning News story, which said that the developer who was trying to build a Scion-branded hotel in Dallas dropped the project over public furor

Mukemmel "Mike'' Sarimsakci, whose sobriquet is the "Turkish Trump," was reportedly building a Scion on a lot near Dallas City Hall, but is reportedly abandoning the brand in favor of working with a different hotel company. Dallas Councilman Philip Kingston said he was informed by Sarimsakci, founder of Alterra International, that he planned to work with a different hotel operator for the project. According to Bloomberg, "Kingston said he met with Sarimsakci and others at Dallas City Hall at Sarimsakci’s request after Kingston and another council member criticized the developer’s plans to go into business with President Donald Trump’s company."

Meanwhile, Trump Hotels said it ended the planned project after Sarimsakci went public with the plan. A Trump statement read: "The current situation is the result of a phone call this developer made to our company asking whether he should pursue the project with the city council. We told him that he should not. This developer made quite a bit of noise about a potential deal and now there is more noise about the possible dissolving of this deal."

In order to get out in front of it, Danziger, speaking to The New York Times, said the company "retreated" from the deal, which reportedly hadn't even been finalized. The straw that broke the camel's back was Sarimsakci going public. 

(The Scion Dallas project, as of press time, is still listed on Alterra's website.)

Foreign Exchange

Danziger also told The New York Times that it was pursuing six other hotel projects in the Dallas region that did not involve Alterra, a company that has come under inquiry before. An earlier examination by The New York Times found that Alterra, which is based in Dallas, had business ties in Russia, Kazakhstan and at least two dozen other countries. 

To be clear, Alterra's ties are not nefarious, but President Trump pledged that the organization bearing his name would not make foreign deals while he was in office. A partnership with Alterra could invite foreign entanglements, as The Times pointed out.

Which brings us back to Danziger, who, when he took over as CEO in August 2015, pledged to take the Trump brand more international. “I believe there is an enormous global growth opportunity with Trump,” he told The Wall Street Journal at the time. With that more or less off the table, what is he to do?

Trump Ties

We may have got the answer at the AAHOA conference. Danziger was explicitly there because the company is currently bouncing around the idea of launching a three-star franchise brand, though nothing has yet been formalized. Pitching an idea like this to AAHOA's membership (more than half of U.S. hotels are owned by AAHOA's some 16,000 members) is a shrewd move—even more so knowing that AAHOA's membership leans Republican via its pro-business, low-regulation ethos.

Here again, however, the cloud of Trump hovers—even if unintentionally. As has been a theme since Trump became president, his businesses should not benefit from what he says or tries to get legislated. During a recent roundtable with some of the most powerful CEOs in the country, Trump said, "So many people come to see me—I see them all the time—small businesses that are unable to borrow from banks. They never had a problem five, six, seven, 10 years ago. They had great bankers, great relationships, now they can't borrow."

The franchise community rises and falls on the ability to tap into debt for projects—and that's where statements like that get sticky for Trump Hotels. Something the President says and wants to get accomplished could—deliberately or not—benefit his business. 

Donald Trump, now President Trump has always been a spectacle. Without knowing for sure, my guess is that when Danziger—who is a fervent admirer of the late President John F. Kennedy; he owns a pair of Kennedy's sunglasses and a prodigious painting of Kennedy hangs on the wall in his office—took the CEO position at Trump Hotels, only in his wildest dreams did he believe Trump would become President of the United States. He could not have envisioned the challenges that reality now has on his ability to lead Trump Hotels free of backlash for every move it makes.

What I know people miss—and it's something I've stated before—is that the people who staff and run Trump-branded hotels are not Donald Trump. They aren't billionaires. They are regular working Americans who just happen to work in hotels with a name on them that stirs such sharp division. They, not President Trump, are the ones that suffer from the media and public's piercing and constant stare. Running a hotel has nothing to do with politics. 

Sitting on the AAHOA stage amid 11 other hotel company CEOs, Danziger could have felt like he was part of one of those early-day Republican debates. He's still standing. 

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