The Real Deal New York

Amid mounting scrutiny, Trump Org abandons plans for hotel chains

The company was in negotiations for American Idea and Scion brands in a dozen locations
February 15, 2019 08:30AM

Eric Trump and Donald Trump Jr. with a rendering of a Scion Hotel (Credit: Getty Images and Alterra International)

The Trump Organization is abandoning plans to build two nationwide hotel chains amid growing scrutiny over the company, and as a Democrat-led House of Representatives looks to position itself against President Trump.

While the company had only formally announced one hotel location in Mississippi, it was in negotiations for at least a dozen more deals in Washington, D.C., and five other states, the New York Times reported.

In a statement, the president’s son, Eric Trump, blamed the decision to shelve the hotel project — the Scion and American Idea — on the political climate. “We live in a climate where everything will be used against us, whether by fake news or by Democrats who are only interested in presidential harassment and wasting everyone’s time, barraging us with nonsense letters,” he said, according to the Times.

The company was facing opposition in Dallas and St. Louis over potential Scion deals. The Trump name has also proven to be a sore spot for some investors and partners even though the president does not run the company he still owns.

The Trump Organization was planning on partnering with local hoteliers, brothers Dinesh and Suresh Chawla, for one Scion, and as many as three American Idea hotels. The Chawlas will move forward with the projects without the company, with the possibility the two family firms could reunite once President Trump leaves office, the Times reported.

The Scion brand was intended to be a four-star, boutique hotel, while the American Idea offers more budget-friendly rooms.

The Trump Organization has come under increasing scrutiny along with the president’s own business dealings before he took office. Trump’s former fixer Michael Cohen, was sentenced in December to three years in prison after pleading guilty to lying about his involvement in the deal to bring a Trump Tower to Russia. [NYT] — Natalie Hoberman