The Trump Hotel Annual Report Analysis | Free Essay Example

The Trump Hotel Annual Report Analysis

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Topic: Business & Economics
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Introduction

Donald J. Trump started Trump hotels in 1997 as Trump and International Hotel and Tower in 1997. The hotel was a 52-story building used as residential.

The other hotels opened later include Trump International Hotels and Tower Chicago, Trump International hotel Las Vegas, Trump International New York, Trump Ocean club International Hotel, Trump Scotland, Trump International and Tower Toronto and Tower Panama, Trump Soho New York and Tramp International Hotel Waikiki Beach Walk (Securities and Exchange Commission, 2002).

These are Five Star hotels with Lavish Amenities. Jan and Haka (2008) assert that there are many activities undertaken in these hotels, such as meetings, cocktails and wedding receptions. There are also private boardrooms and ballrooms and many other rooms for different events. Trump has purchased many hotels such as Hilton City Hotel, and unfinished Taj Mahal property. In this light, the following paragraphs focus on annual report analysis of Trump Hotels.

The CEO’s Report

The CEO’s (Donald Trump) report has focused on many events that the company participated in the recent time. First, it has focused on forward looking statements, which has risks, and other uncertainties that are difficult to quantify.

In Business, the CEO has focused on the recent events such as TCH note offering, which was consummated by both Trump Casino Holdings and Trump Casino Funding. The CEO has also listed other properties that Trump owns. These properties include many hotels located in different places such as Trump 29 hotel, which is in California Coachella County.

The reports have also indicated the legal proceedings that the company was involved. Such proceedings occurred in many cases like the one that occurred between Trump Indiana and eight residents concerning the buying of non-voting stocks.

Similarly, the report lists stakeholders: it indicates both the high and low sales with all quarters within a given year, for example, first, second, and third quarters of year 2001. The document also summarizes the financial data as from year 1998 to present. The data contains revenues, capital and other events with comparison of financial data within these years.

In addition, the company has documented the government gaming regulations for the casino hotels and the provision. These provisions include how to renew the casino licenses, the space permitted for the gaming units, the qualifications of a person eligible for a license, the game rules, granting of time limit of the credit and implementation of gaming debts.

The CEO has also summarized the management discussion concerning analysis of the Company’s finances, such as interest expense and operations.

The company also recognizes the critical accounting policies and their assumptions. This includes identification of revenue and other doubtful accounts, long-lived possessions, and insurance reserves. The CEO has also written the names of the executive officers and directors such as Mark A. Brown together with the position they hold in the company. He argues that Trump documents the letters of employment agreements, appointment, and expiring dates of employment to enhance accountability in the organization.

In general the CEO has focused on the following: organizations and its operations, accounting policies, long-term debts, commitment and contingencies, employee benefit plans, fair value of financial instruments, financial information and Trump funding, Trumps worlds fair closing, twenty nine palms development, quarterly financial data and other Trumps subsequent events.

Analysis of the Mission Statement

Trump’s mission statement is a long-term vision that seeks to exceed the expectations of its customers in all areas of its provision of products and services. Trump has set up luxurious hotels such as Trump international hotel in New York. These hotels have many services such as hosting weddings, meetings, and other events.

Trump hotels such as Miami International Beach Resort can accommodate many guests because it has about 390 rooms including stunning guest rooms. They give their customers a five star service and they are committed to do so each day. The Trump Plaza Casino has 904 hotel rooms and 145 guest suites. It has cocktail lounges, health spa, indoor pool and tennis games (Securities and Exchange Commission, 2002).

Trump has achieved its mission because it has received many awards such as Forbes five star awards as from the year 2009 to 2011, awarded to Trump international Hotel and tower New York. Similarly, Trump Chicago has several awards, such as travel and leisure 2010 awards. Furthermore, The Trump hotels are among the 10 to 15 best hotels with exquisite awards in their respective regions.

Financial Health Trump

Trump hotel is still recovering from economic recession that affected it some years ago. There was an immediate decline in revenue, which has affected Trumps up to date, especially on slot machines and table games. Although the industry has not fully recovered, the revenues are decreasing within the first quarters of each year and increasing at the second and third quarters and later decreases at the fourth quarter (Securities and Exchange Commission, 2002).

The Gross revenues was high in 2001, but has declined in 2001 and 2002. As the Gross revenue decreases the net loss increases. The total current assets have also had a major decline from 317,646 in 2001 to 50,505 in 2002 – property has also shown a slight decrease. It is evident that Entertainment generates good EBITDA from all the Casinos, but many debts still burdens the company – this emerged since bankruptcy protection in the past years. The Company has not yet gained its financial stability since the recession period.

The Performance of the Company in the Next Five Years

The Company is likely to perform average in the next five years because it has not shown a lot of improvement in the past years. However, if the company reconsiders renovating some of its properties it will have a positive impact and improve efficiency and profitability. The Hotels that need renovations are the three aging Casinos in Atlantic City. The company will also perform better if it creates a strategic plan that will raise its enterprise value. This will entail increasing the value of debt and the equity holders.

According to the report, the debt has accumulated as from 2003 with 19,911, 2004 with 15, 546, 00, 2005 with 8,500,000, 2006 having a huge accumulation of 1,300,346,000, 2007 with 605,000 and then other years 600,425,000, and the total amount accumulated is $1,945,333,000.

If Trump sells some of its property, it will be able to settle all its debts and be financially stable. The gaming marketing in all the hotels will increase in revenue because of the large number of people who visit the Casinos. In essence, the company generates more revenue during summer and spring (Epsen & Jermakowicz, 2007).

Conclusion

Trump hotels are popular and have many customers worldwide. These hotels have received several awards. However, its productivity has reduced since recession together with a huge accumulation of debts that affects its profitability. According to Rakesh (2005), the CEO should come up with strategies to reduce these debts, and focus on the activities that increase income such as gaming balls.

He should also develop ways to restructure these debts to avoid filing for bankruptcy like the one that occurred three times in 1991. Although Trump hotels have gained publicity, there is a need to come up with marketing strategies that focuses on its new products and services in order to raise more awareness.

References

Epstein, B. J. & Jermakowicz, E. K. (2007). Interpretation and Application of International Financial Reporting Standards. Chichester: John Wiley & Sons.

Jan, W. R. & Haka, S. F. (2008). Financial & Managerial Accounting. New York: McGraw-Hill Irwin.

Securities and Exchange Commission. (2002). Trump Hotels & Casino Resorts, Inc. Form 10-K: For Annual and Transition Reports. Washington DC.

Rakesh, J. M. (2005). International Marketing. New Delhi: Oxford University Press.