Toronto’s Trump International Hotel and Tower will soon no longer bear the Trump name, a change experts say is likely the result of the U.S. president alienating customers who disagree with his politics.
JCF Capital, the new owner of the hotel and condominium tower, said Tuesday that it has reached an agreement with a unit of the Trump Organization to buy out management contracts for the property for an undisclosed amount.
While U.S. President Donald Trump never owned the building, his Trump Organization licensed his name to and operated the property, which has struggled financially and been the focus of a long-running legal battle after opening in 2012.
The rebranding is likely a business move as Trump’s brand was probably hurting demand, said Pankaj Aggarwal, a marketing professor at the University of Toronto-Scarborough, adding that the tower’s Canadian location adds to the case.
“The core value of Canada is somewhat different (than the U.S),” he said, pointing to Canadians’ choice of a Liberal government in the most recent federal election as an example of differing views on issues like immigration.
A Pew Research Center poll released this week found that for the first time since it start polling in Canada, the percentage of Canadians with a favourable view of the U.S. fell below half, with just 43 per cent indicating a positive view.
Trump’s brand was fairly straightforward as long as the only association customers had was “luxury, excellence and all the glamour,” said Gabor Forgacs, an associate professor at the Ted Rogers School of hospitality and tourism management at Toronto’s Ryerson University.
But once Trump entered politics, his brand became entangled with his election platform, rooted in protectionist policies. These included a ban on travel to the U.S. from several predominantly Muslim countries and a promise to build a wall along the Mexico-U.S. border.
“That clouded the brand in a way that is not favourable,” he said.
The tower’s target customers – wealthy individuals – who found themselves disagreeing with Trump’s politics, personality or conduct have a plethora of other luxury options in Toronto and elsewhere in the world, Forgacs added.
Trump-branded properties, including a recently opened tower in Vancouver, have been the target of protesters angry about the U.S. president’s policies.
JCF declined to say why the company bought out the management contracts.
Representatives of both JCF and the Trump Organization said in a press release that their relationship has been good and they may work again together in the future. Both sides declined to comment further.
The 65-storey Toronto tower was built by developer Alex Schnaider, who formed the original business relationship with the Trump Organization. His company, Talon International, later defaulted on a loan from an Austrian bank, which sold the loan to JCF Capital.
An Ontario judge approved the $298-million bid by JCF, a joint venture between Juniper Capital Partners and Cowie Capital Partners, to acquire the property in late March.
Last October, an Ontario court ruled in favour of investors who had launched a lawsuit alleging they were misled when they bought units in the residential portion of the tower. The investors scored another victory in March when Canada’s highest court refused to hear an appeal of the ruling.
© 2017 The Canadian Press