Trump Hotels Unveils Plans for American Idea Lodging Chain

(Bloomberg) -- Trump Hotels, the luxury-lodging company started by the U.S. president, is planning a line of lower-priced properties under the name American Idea, Chief Executive Officer Eric Danziger announced on Monday.

The new hotels will be mid-tier properties, Danziger said at a news conference at the Trump Tower in New York. While Trump Hotels' existing properties are in such major metropolises as New York, Washington and Chicago, the first three American Idea hotels will be in Mississippi, Donald Trump Jr. said in an interview at the event.

“While we will continue in pursuit of this mission for our luxury Trump Hotels brand, we look forward to leveraging our expertise and experience across the various segments of the hotel business” and serving “many more guests, owners and markets across the nation,” Danziger said in a statement Monday.
 
Plans for the new American Idea brand were reported earlier Monday by the New York Times, which said that the idea for the chain emerged from visits to dozens of small towns made by President Donald Trump's children during their father's campaign. Trump's sons Donald Jr. and Eric now run the Trump Organization, of which Trump Hotels is a part.

The first three American Idea hotels will be in Cleveland, Clarksdale and Greenville, Mississippi, and will be existing properties retrofitted for the new brand. The hotels are owned by Chawla Hotels Inc., which will license the American Idea name from Trump Hotels. The three properties, once given a new name and American decor, could be open within seven to eight months, said Dinesh Chawla, CEO of the Cleveland, Mississippi-based company.

Expansion Plans

Chawla said he got a phone call in March from Mitch Garrett, vice president of acquisition and development at Trump Hotels, asking about a possible partnership. Chawla said he has stayed in Trump hotels, was impressed by their service and thought that teaming up would help his company's expansion efforts. He said the vetting process required vouching that he and his partners had no ties to foreign governments.

The first three American Idea hotels will be aimed at business travelers and blues-music tourists, Chawla said. Cleveland has a Grammy music museum, and Clarksdale is home to a blues club co-owned by actor Morgan Freeman.

President Trump has drawn criticism since January for refusing to sell his businesses, which ethics experts say pose conflicts for his White House role. Norm Eisen, former ethics adviser to the Barack Obama administration, and a frequent Trump critic, described American Idea as “exploiting public office for private gain,” on Twitter Monday evening.

Danziger said Monday that the first property in Trump Hotels' new Scion chain is being built in Cleveland, Mississippi. The hotel -- also a Chawla property -- will be named Scion at West End and will have about 100 rooms, suites and extended-stay accommodations; a spa and fitness center; an event hall; and two full-service restaurants, Trump Hotels said in the statement.

The company has 39 signed letters of intent for Scion properties, Danziger said. The new line of hotels, which will target younger clients, was unveiled last September.

To contact the reporter on this story: Hui-yong Yu in Seattle at hyu@bloomberg.net.

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Dan Reichl