The Trump International Hotel and Tower in Ontario has failed to make a profit despite being located at the heart of the city’s financial district. Although the hotel bears the name of the current US president, he did not develop the property nor does he own it. A real estate company called Talon International Development paid to license the Trump name as well as hand over management duties to Trump’s company. We will discuss further how hotel receivership management can help this hotel, and others like it.
Many were banking on the success of the project when it was announced in 2004. This was due, in part, to Trump’s success as a reality TV star. A number of the investors were foreigners who barely spoke English but kept referring to Trump and The Apprentice as reasons for investing.
In 2016, an appeals court in Ontario decided that the investors were deceived. Investors believed they would receive record profits. Instead, the investors experienced losses. Following the court decision, the hotel went into receivership because the owners have not been able to make debt payments for over a year.
The Regency Hotel in Dublin, Ireland also went into receivership but the circumstances were different. The hotel was the site of the fatal shooting of David Byrne in February 2016. Following the incident, the hotel suffered cancelled bookings and has generally failed to generate business since, despite receiving insurance payment.
The Trump International Hotel in Ontario and the Regency Hotel in Ireland are just two examples of struggling hotels that have gone into receivership but how can hotel receivership management help hotels that are in distress?
-
It provides an opportunity to restructure rather than liquidate
Receivership is essentially taking control from current management. This means that the appointed receiver will be in charge of overseeing business operations. The goal of a receiver is to stabilize a business and that often means making necessary changes to improve profits, be that making management changes or operational changes.
-
It helps bring back profitability
Stabilization is part of the main goal of a hotel receivership. As such, those appointed to the task will do everything they can to make sure this happens. An appointed receiver is provided with the ability to do what they must to keep the hotel stable. Receivers have the tough task of bringing a period of recovery to a company. In some cases this requires liquidating some assets.
Hotel receivership management is an option for hotels looking to restructure. For many, it’s an effort to try and return the business to a profitable state. This is true in the case of the Regency Hotel in Dublin. Their hotel has suffered losses following the murder that took place on their premises.
The Trump International Hotel, however, was never profitable from the start but receivership could bring in better fortune. JCF Capital, an investment group, now holds the mortgage of the failing Trump-branded hotel in Ontario. The group told the court its intentions of taking ownership of the hotel.
Contact us Today at: (800) 580-3950; Continue Viewing Our Website
