What hoteliers have to say about a Trump presidency

Donald J. Trump is the 45th President of the United States of America. The average American’s reaction has been far from subdued; poll your personal social media outlets to see equal parts elation and woe, but the hospitality industry is taking a shot at optimism.

Steve Belmonte, CEO of Vimana Franchise Systems, is one. He said reports of initial negative reactions didn’t make much sense to him. Despite his concerns, he thinks a President Trump will be a good thing for business, and he had more concerns with Democratic candidate Hillary Clinton.

“When you start tearing down some of these regulations that don’t make sense, there are a lot of factors right now that point to a positive year ahead of us financially,” Belmonte said. “As the dust settles and people get closer to reality, they will see there is a lot of good coming from this.”

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The Asian American Hotel Owners Association, one of the strongest arms of the hospitality industry, has traditionally held a Republican bent, even though the 16,000-member organization is officially non-partisan, but supports small business owners first. The organization has promoted keynote speakers from across the aisle at its events in the past, such as former President George W. Bush, former President Bill Clinton and former chairman of the Democratic National Committee Howard Dean. But a Trump presidency excites Chip Rogers, CEO of AAHOA, for a different reason: our new leader is also an hotelier.

“President-elect Trump has pledged to reduce regulation and lower taxes; everyone concerned with advancing free markets should share our excitement,” Rogers said. “President-elect Trump understands first-hand the delicate balance between organized labor and private sector businesses. This understanding from the executive branch has been sorely missed for quite some time.”

These sentiments were shared by Roger Dow, president and CEO of the U.S. Travel Association, who said Trump’s policies were very much in line with those in hospitality.

"Mr. Trump demonstrated throughout his campaign that travel and infrastructure issues have his attention, and we stand ready to advise his administration on achieving his stated aims in these areas,” Dow said. “We are encouraged that Mr. Trump's extensive business and hospitality background—not to mention that travel accounts for 10 percent of all U.S. exports and creates jobs in every single congressional district—will make him a ready and receptive ear for our agenda.”

Known Unknowns 

Inconsistencies in what Trump has said, and uncertainty as to how he will follow through with what has been promised, rank high on the list for his detractors. Gerry Chase, president & COO of New Castle Hotels & Resorts, is one of them. He has concerns regarding the status of healthcare in the U.S. as the possibility of the Affordable Care Act being repealed grows all more real. While he too remains optimistic, he is taking stock of the unknown.

“We need to care for our associates, they are great people,” Chase said. “We offer healthcare to all of our associates, and I’m hoping healthcare in the U.S. improves under Trump, but I don’t know. I know this: Our first try with Obamacare changed a lot of how we do business and health, and when you make big changes it could be dramatic. Or it could not, but until the document is written, and it’s a law, we are in the dark.”

Cindy Nelson, chair of hospitality and partner at law firm Gardere Wynne Sewell, said that Trump lacks clarity on his stances regarding healthcare and wages.

“Until he decides how and when Obamacare is going to change, I don’t know how he will do it,” she said. “There are certain aspects of his plan that are unclear, and many larger companies already provide insurance for their workers so it shouldn’t affect hotels. On the topic of wages, we aren’t sure where Trump stands exactly. In the past he was a $10-an-hour person, but it will probably reach $12 an hour next year.”

This lack of concrete plans extends to some of his business strategies. Trump has made statements in the past that he seeks to close loopholes that even he has used to escape paying taxes while simultaneously cutting them, but it could all be rhetoric.

“He may ignore or even strengthen these loopholes, but he may help the real estate industry because he’s a real estate guy,” Nelson said. “It’s all uncertain.”

Belmonte, however, is prepared to welcome these changes. “All I know is under Obamacare my premiums went up from $1,900 to $2,600 a month for myself and my wife,” he said. “It’s staggering. People are concerned it will be repealed and they will be stuck without insurance overnight, but I doubt any of that will happen.”

Rogers expressed interest in Trump’s free-market proposals that would reduce regulations, lower taxes and hopefully create jobs, but was skeptical on a trade policy the President-elect floated earlier this year that would place a 45-percent tax on Chinese imports. As the industry is reliant on inexpensive manufacturing and many goods from China, the new proposal raises questions.

“How could this impact the industry if a tariff measure like this is passed? It is difficult to comment on specific policy proposals without exact details,” Rogers said. “Mr. Trump’s written position statements reference tariffs being applied against those nations, violating existing trade agreements.”

Immigration and Foreign Travel

The political right of 2016 is taking a hard-line approach to illegal immigration, and immigration as a whole, something that may even affect EB-5 financing. According to Nelson, this sort of investment from the outside looking in seems like it allows immigrants to buy their way into the U.S., but considering its contested history with Republicans and the rising tide of Chinese investment it remains to be seen whether or not EB-5 will remain a fixture of real estate investment.

In addressing illegal immigration, Rogers acknowledged the employment of undocumented immigrants in many hotels across the nation, but said the effects of immigration reform on the industry are impossible to guess.

“Our members are quite mindful of current law, take all necessary steps to comply, and will continue to do so,” he said. “Among workforce issues, our members have expressed much greater concerns over the ‘joint employer’ decision from the [National Labor Relations Board] and the new overtime rule.”

Arturo Garcia Rosa, president and founder of the South American Hotel & Tourism Investment Conference, said he is confident the election will not produce any fallout with regards to U.S. trade or hotel development with a newly accessible Cuba.

“Of course, it will be for the best if the U.S. and Cuba can continue to improve the relationship, but hotel development in Cuba is already [moving forward],” he said. “The tourism business will continue to grow, and I am sure U.S. citizens will travel more outside of their country, and one of their destinations will be Cuba."

Americans are as divided now as they were during the election, but some are looking for a way to heal.

Healing the Divide 

The most non-partisan agreement everyone can come to regarding the election is that they are glad the race is over.

“I try to be as bipartisan as I can, especially in business, but this was a tough election,” Chase said. “It started a terrible form of insulting each other, and now that it’s over hopefully we can heal.”

Katherine Lugar, president and CEO of the American Hotel & Lodging Association, chimed in with congratulations for Trump, and maintained that hospitality is a bipartisan industry that supports 8 million jobs in the U.S.

“We congratulate President-elect Donald Trump and look forward to working with him as well as government officials and members of Congress on both sides of the aisle to advocate for policies that boost the economy, support entrepreneurship and business growth, and promote travel and tourism across the United States,” Lugar said. “With a hard-fought election race behind us, we must now come together and work on behalf of all Americans. As we all take stock of the results, it’s now time to move forward together as a nation and focus on the business of governing.”

Meanwhile, Marriott International penned this open letter to President-elect Trump.

John Hach, senior industry analyst at TravelClick, imparted less of an impression and more of a lesson.

“The polling data were so incorrect, and there is a correlation between that and the strength of hotels right now,” he said. “When you look at the polls coming out past, present and future, it’s important to look at the data objectively and not formulate data based on opinion. Looking at this election there isn’t a better case study of polls being wrong. Rely on hard data, it gives you the facts.”

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