Exclusive: Data show Trump's DC hotel was pricier and emptier than peers in 2017

Washington (CNN)Just a few months before President Donald Trump moved into the White House, his presence was already firmly established in downtown Washington, only a few blocks from 1600 Pennsylvania Avenue, at the newly opened Trump International Hotel.

New information obtained exclusively by CNN offers a rare glimpse into the business operations of what quickly became one of the President's most highly scrutinized businesses and a de facto clubhouse for his administration's officials and supporters. The numbers don't shed light on the hotel's profitability, but they do illustrate how Trump's property operates differently than some of its competitors when compared to an industry analysis also obtained by CNN.
Trump's hotel had an average monthly occupancy rate of about 50% through November 2017, according to data provided to CNN covering the first 11 months of 2017. That occupancy rate is about one-third below an industry average for a broad group of luxury hotels in Washington over the same period.
CNN compared the Trump hotel's monthly occupancy and room rates to a report by lodging industry research firm STR, which surveyed nearly two dozen high-priced, luxury hotels in the city that likely includes the Trump International Hotel. The hotel might measure itself against an even smaller, more elite subset of those rivals.
    Despite the low occupancy, the Trump hotel charged nightly room rates that were 40% higher on average than those same nearly two dozen hotels.
    According to STR's analysis, top-tier hotels in Washington reported an average monthly occupancy of 77% -- 27 percentage points higher than Trump's hotel. Those competitors charged an average of $334 per night versus Trump's $559 average daily rate.

    Vacancy and profitability

    While room revenue is a critical factor when it comes to profitability, some hotels generate enough revenue from food and beverage, banquets and other services to compensate for soft room sales. Higher rates on rented rooms may also offset revenue lost on vacancies.
    "These properties aren't driving profitability by filling up all the rooms -- they are often driving profits by charging more," said Jan Freitag, STR's senior vice president for lodging insights.
    Previously released information, accidentally posted online by the federal government in August, showed the hotel generated about $2 million in profit during the first four months of the year, which included Trump's January inauguration, when nightly rates increased. It's possible that Trump's hotel has kept rates high to maintain its allure -- a common industry practice -- or because discounting rates in an effort to increase occupancy would have hurt the hotel's profitability.
    Either way, it's unusual for a new hotel to open with higher room prices than its peers, said Michael Bellisario, a senior research analyst for Robert W. Baird & Co.
    Typically, new hotels "want to create an incentive for customers -- plus, they haven't built a base of corporate customers yet," Bellisario said. "But this property is operating differently. The name on the door could help it command a premium among supporters -- while keeping others away."
    The Trump International Hotel and the Trump Organization both declined to comment on the hotel's pricing strategy.
    STR collects data from individual hotels and produces research on the market. Hotel operators use STR data as a benchmark to measure their own performance against peers. The company, however, doesn't publish or share figures for specific properties. STR declined to confirm or comment on the specific numbers for the Trump hotel in DC, citing the firm's confidentiality policy.
    "All STR hotel property-level reports are confidential and contain proprietary information," an STR spokesman said. "The (Trump International Hotel) data that CNN has asked us to comment on was not provided by STR."

    A towering Trump controversy

    Trump's hotel, located just blocks from the White House, has been at the center of a debate over the potential conflicts of interest created by the President's refusal to divest from his businesses. The Trump Organization made splashy headlines when it won the bid to redevelop and lease the historic Old Post Office Building from the federal government in 2013. The deal's announcement touted a $200 million commitment to transform the century-old building, known for its 315-foot clock tower, into a luxury hotel with over 260 rooms, high-end restaurants, a spa, and conference and ballroom facilities, according to a government press release at the time.
    For Trump's critics, the property stands as a symbol of government corruption. Government ethics experts, along with congressional Democrats, argue that The Trump Organization should publicly release the hotel's financial results. They are concerned that foreign governments and special interests could be booking rooms or holding events at the hotel to curry favor with the administration -- and paying top dollar to do it.
    The Trump Organization's lease of the building from the federal government, however, presents yet another layer of potential conflict. A Trump business rents the building that houses the Trump hotel from the General Services Administration. The GSA oversees the 60-year lease, which Trump signed two years before he began his presidential campaign. As President, he now oversees the GSA, which effectively gives the tenant control of the landlord.
    Under the terms of the lease, Trump's business agreed to pay a fixed monthly rent plus an additional fee if the hotel exceeds certain sales targets, meaning taxpayers have a stake in its success.
    Before his inauguration, Trump resigned from the company that runs the hotel and transferred his assets into a trust. The trust, however, holds "assets for the exclusive benefit" of the President, who can dissolve the trust anytime he wants, according to a document filed in January with the city's alcohol board. This structure undermines the trust's independence and allows him to benefit financially from those businesses, including the hotel.
    The White House did not respond to requests for comment on the trust's structure and independence.
    In an effort to address concerns over the possibility of foreign influence, one of Trump's attorneys announced during a January 2017 news conference that Trump's business would voluntarily donate all profits the hotel derived from foreign governments to the US Treasury.
    "This way, it is the American people who will profit," said Sheri Dillon, Trump's attorney from the firm of Morgan, Lewis & Bockius LLP.
    But months after that, in May, the plan to donate those profits faced renewed scrutiny by watchdog groups when The Trump Organization conceded it was difficult to determine whether certain payments were attributable to foreign governments.
    In response to CNN's questions about the hotel's plans to donate profits linked to foreign sources, a spokesperson for the hotel suggested that more information is forthcoming.
    "Our fiscal year ended on December 31, 2017. As typical with businesses finalizing their annual financial reporting, we expect to have information available towards the end of February 2018," said the spokesperson in a statement.
    One of Trump's harshest critics said more disclosure is needed.
    "Trump gave his word that he'd donate profits from foreign governments to the Treasury, but his word is garbage when he's defying requests for records showing he donated them," said Walter Shaub, former director of the Office of Government Ethics and a CNN contributor. "It smacks of a con job by the most conflicted President in modern history."