Daily Management Review

Disappointing Profits In 2017 Generated By Donald Trump's Turnberry Golf Resort In Scotland


10/05/2018




Disappointing Profits In 2017 Generated By Donald Trump's Turnberry Golf Resort In Scotland
Suggestions that the public conduct of United States president Donald Trump might have impacted the popularity of his luxury golf resort at Turnberry in Scotland gained ground as the business earned much less than what it had forecast a year ago.
 
Because of a spending of more than £100m for refurbishing the buildings and courses and the doling out of rooms at a steep discount, a profit of £15.2m in 2017 was made by Trump Turnberry’s luxury hotel and golf resort in Ayrshire  according to information from the firm’s last accounts.
 
According to a media statement by v Turnberry’s general manager, Ralph Porciani, given in January last year, it was expected that the hotel would make record earnings in its over a 100 year history in 2017 and would easily outstrip the previous best performance of a profit of £16.2m in 2007 by 15% to 20%
 
In an interview at the same time in Times, Trump had said that the hotel was doing “unbelievably” well due to the increase in US and overseas visitors because of a fall in the value of sterling. However the 2017 earnings of Turnberry was much lower than the forecast amount of at least £18.5m.
 
The primary reason for the 70% increase in sale was that the hotel was not impacted by any closures during 2017 because of the refurbishment work at the total and the remodelling of its golf courses. Additionally, following the revamping of the golf courses, the hotel also enhanced the fees for the annual golf club membership by 38% to £2,500.
 
But the optimism of the business doing well because of the fall of the sterling against the US dollar was also proved false according to the performance of Golf Recreation Scotland, the holding company of Turnberry.
 
According to the claims of the Golf Recreation Scotland, currency conversions allowed it to make a profit of £4m in 2017 and in 2016, it had made a loss of £8m in from currency transactions even though the value of the sterling against the dollar then was lower than what it was in 2017.
 
Further, the company also claims that even though most of its business transactions are done in US dollar, the cost of currency transactions is only calculated at the end of the year which indicates that the accounts of the company were helped by the steady growth of the pound against the dollar since 2016 Brexit referendum. But there might have been a hit to the company because of a decrease in the overseas visitors due to the strengthening pound against the dollar and other currencies. This could have forced the room rent cuts at Turnberry.
 
The accounts of the firm also show that it has a debt of £107m to Trump’s trust in New York against the costs of overhaul and refurbishment.
 
(Source:www.theguardian.com)






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