January 5, 2026 • 37 mins
What do you do when the real estate market collapses?
If you’re Ian Livingstone, you buy.
In this episode of Distinguished, Dean Arun Upneja speaks with Ian Livingstone, the co-founder of London & Regional Properties, one of the UK’s largest private real estate groups, about what it really takes to build a £12 billion global empire, through booms, crashes, and everything in between.
Livingstone shares how he went from running 170 optician stores to reshaping urban skylines; why crisis moments create once-in-a-generation opportunities; and how he’s built cities like Panama Pacifico, where 20,000+ homes, schools, and commercial districts grew from a single idea and decades of patience.
A candid, behind-the-curtain conversation on timing, conviction, distressed assets, hospitality real estate, and why the future of leisure and experience-driven travel still holds unmatched potential, even in the age of AI.
The “Distinguished” podcast is produced by Boston University School of Hospitality Administration.
Host: Arun Upneja, Dean
Producer: Mara Littman, Executive Director of Strategic Operations and Corporate Relations
Research and Content Creation: Lan Lu
Marketing: Anne Dawson
Editing: Isabella Laikin and James Leon
Music: “Airport Lounge" Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:05):
Markets crash, investors panic, most run for
cover, but not Ian Livingstone.
In 1987, when the world of realestate was falling apart, he and
his brother stepped in, turningcrisis into opportunity, and
opportunity into a 30 billionpound global property
enterprise.
(00:26):
Welcome to the DistinguishedPodcast.
I'm Arun Rupneja, Dean of theBoston University School of
Hospitality Administration, andI'm thrilled to be speaking
today with Ian Livingstone, whohas built a remarkable and quite
significant global real estateportfolio.
Ian has spent more than threedecades shaping skylines and
redefining how cities grow.
(00:47):
As co-founder of London andRegional Properties, he's guided
one of the UK's largest privatereal estate groups through
multiple economic cycles withcalm judgment and a long-term
view.
But property wasn't where hebegan.
Ian started out as anoptometrist, then moved into
retail, opening and runningstores.
(01:09):
Those early lessons in peopleand places later shaped how he
built communities and cities.
Welcome, Ian Livingstone.
SPEAKER_01 (01:17):
Thank you very much for the introduction.
It's great to be here.
SPEAKER_00 (01:20):
Fantastic.
So you began your career in oneof the most turbulent moments in
market history.
So let's start there at thebeginning.
It's 1987.
The markets are crashing.
Everyone is selling.
What did you see that othersdidn't see?
Some people wait for sunshine,but you wait for storms.
(01:42):
What's the psychology behindmaking your best moves when the
world's panicking?
SPEAKER_01 (01:48):
I think the simple answer to that is to be
contracyclical.
It's an easy answer to give, butit's not quite so easy to do.
In 1987, the world was incrisis.
People were fleeing real estate.
They were selling whatever theycould in order to raise money to
meet commitments, whether it waspensions or financing.
(02:12):
And we bought things atunbelievably low prices, prices
virtually halved.
The problem when that happens,of course, is that the banks are
also forcing liquidity.
And so it's very hard to get abank, to find a bank that's
going to back you in buyingthese assets because although
(02:33):
the prices are low, real estateneeds leverage.
So it's a combination of findingall the scared banks that are
forcing people to sell andfinding a bank that believes in
you, that thinks that yourthesis is right, that values
will recover.
And we managed to put the twotogether in those days.
It's much harder to do now.
SPEAKER_00 (02:55):
But have you continued doing since then?
Every time there is a pullbackin the market, you are jumping
in?
SPEAKER_01 (03:01):
We generally try to, but the world got a lot more
complicated because when westarted, property was owned by
big institutions, usually uhpension funds, life insurance
companies, um, as well as umlisted companies.
And they were all very, veryslow.
They were like a herd of sheep.
(03:23):
When one person boughtsomething, the rest all followed
varying degrees of success, butthey kept on doing the same
thing.
And then when something wentwrong, they all decided to sell
together.
And so if you did nothing elsebut the opposite of what the
institutions were doing, youcould make money.
(03:44):
That's all you had to do, the exthe polar opposite of what they
did.
The world's changed now, though,because there are many, many uh
investment funds.
And investment funds are full ofsmart people who have got huge
amounts of money to deploy.
It's not their money, it's LPmoney, but they're there to
(04:05):
deploy it and they're there tomake money, and they only make
money when they deploy it.
So suddenly, instead of havingthose sort of markets to
ourselves, it became a lot morecompetitive.
SPEAKER_00 (04:17):
Everyone followed what you were doing and see,
okay.
SPEAKER_01 (04:23):
Um but for sure, they many people saw those
opportunities and learned thoselessons of different cycles.
SPEAKER_00 (04:30):
You've described your approach as patient but
bounce-ready.
How do you keep that balance,staying calm through quiet
stretches, yet confident enoughto move when these rare
once-in-a-decade opportunitiesare available?
SPEAKER_01 (04:44):
Aaron Powell When you're an entrepreneur, it's
quite hard to sit on your hands.
Right now I'm sitting on myhands.
Uh, and it's it's slightlyuncomfortable because I have to
manage the day-to-day businesswithout having that excitement
of finding something that umwhere I have a high degree of
conviction.
Right now I don't have a highdegree of conviction on
(05:07):
anything, particularly.
I will come on to that in duecourse.
I think there are opportunities,but maybe they're not priced
right at the moment.
And I think also uh yourbusiness tends to change as as
time goes by.
And for us, I think we probablyhave two different pockets of
capital.
(05:28):
One is long-term family assets,which have a less volatile and
and have a lower return, but areyou know there for the long term
for family.
Um, and then there's assetswhere we expect to make money by
buying and selling, and I thinkthose are the ones that are a
bit more difficult.
SPEAKER_00 (05:48):
So I'm glad you came up to um uh right now because
that was going to be my nextquestion, which is that we are
in a moment of uncertainty.
Um interest rates are up, asignificant number of office
buildings are empty, inflationis continuing.
So is this 1987 all over again,or is this something new?
SPEAKER_01 (06:09):
No, it's it doesn't, it's not, it doesn't have the
peaks and troughs of 87.
Um what's happened is it's a bitstagnant.
Deal flow is down.
So people people are, I thinkthat they learned their lessons
after the last few recessions.
The banks learnt their lessons.
Uh people are notover-leveraged.
(06:30):
What happened before in 1987were people were borrowing 80,
90, 100 percent, and so thebanks, you know, caught a cold
and immediately foreclosed onpeople.
Um this time people are notforced because the leverage is
much lower.
People have borrowed 50, 60percent.
Even if prices are down a bit,the bank's not going to
(06:52):
foreclose.
Um so we don't, we're not seeingthe same amount of distress this
time.
What's happened is people arejust not buying and not selling.
And so there's a lot of peoplelike us are sitting on the
sidelines.
I think you can buyprogrammatically if you've got a
specific business that you'retrying to roll up, but if you
(07:13):
don't, looking for one-offdeals, they're a bit few and far
between at the moment.
And uh, and I think until wehave more clarity on what's
gonna happen with inflation andrates, that's gonna be the the
case for some time.
SPEAKER_00 (07:28):
And also, as you mentioned, there are a lot of
other investors, uh, PE andpeople who are ready to deploy
other people's capital, whichmeans that you're not gonna have
property going down to 50% ofits value because it'll get
snapped up.
SPEAKER_01 (07:43):
It'll get snapped up very quickly.
Um I think one of theopportunities that we will see
is that people, funds that areseven, eight, nine years old now
need to sell because the LPs arelooking for their money back.
Uh and many of those won't havegreat returns, but they still
need to get cash back to theinvestors who are being diluted
(08:06):
every year by fees.
And so they will be forced tosell off assets at whatever
price they can get.
So there may be someopportunities, but again, as you
say, they're not going to bedramatically down.
SPEAKER_00 (08:21):
So since you mentioned that you don't see a
whole lot of good opportunitiesaround, so when you do see a
distressed asset which needs alot of love and huge amounts of
capital inflow, what are theindicators that help you
understand whether to invest inthat property or not?
SPEAKER_01 (08:39):
I think it's fundamentally about the
long-term position of the assetand the brand that you feel that
you want to put on it if ithasn't got a brand or if you
feel that the brand is going tobe appropriate for that
location.
So you need the right brand, theright location, the right bones
of the property.
Um, and then you've got to umspend money, you know,
(09:02):
carefully.
It's very easy.
The problem that one of theproblems that we have is in, and
if I perhaps specifically talkabout hotels for a minute, more
than commercial real estate.
One of the problems is this.
Many of these hotels areoperated under a franchise.
And when the hotel gets sold,immediately, Hilton, Marriott,
(09:25):
Intercon, whoever it is, theycome along and they give you a
long, long list of everythingthat they'd like to see in the
hotel.
And that is a major issue as aproperty owner because those
things that they want for thebrand are not necessarily
consistent with a return oncapital.
(09:45):
And so there's this immediatesort of dichotomy between what
they want and what actually isgoing to make money.
And if you own enough hotels andyou you've got a good
relationship with the likes ofMarriott and Hilton, you can
negotiate that PIP, the propertyimprovement plan.
You can negotiate it quite hard.
But if you don't, then it'sincredibly destructive to the
(10:08):
value of the seller, because thebuyer is going to look at it and
say, well, Marriott wants me tospend$15 million on this hotel,
and I don't think it's so I'mgoing to have to take that off
the price.
So it's it's value destructive,and I think the brands need to
be more user-friendly to theirowners in some cases, and be
(10:33):
more sensible when they set outthis PIP on a sale.
So that's a it's a very bigissue to get right.
SPEAKER_00 (10:41):
Yeah, this is music to the ears of all the franchise
who are franchising theseproperties and are faced with
these huge amounts of PIP.
Um so since you do areinterested in um distressed
assets, um a strange question toask.
Well, what kind of distressedassets are your favorite?
Are these hotels, are thesebuildings, are these office
(11:04):
tower, leisure assets?
SPEAKER_01 (11:06):
I think it's easier to price a hotel because you've
got very good data about what'sgoing on in the neighborhood,
what's the competitive set.
We have STR data, we can tell onevery on any given day what the
competitive set's doing, whatoccupancy, what rate.
And so we can take a pretty goodstab at how that's going to
(11:27):
perform and what we can affordto pay for it.
Um, commercial real estate ismuch more of a local business.
It's really hard to know.
You can have an office buildingon one corner that will lease up
better than one two blocks awayor three blocks away.
It's much more difficult toknow.
It's more of a local game, and II wouldn't do it because I don't
(11:48):
have as good data.
Um, and I don't know the marketsoutside of my own home market, I
don't know them as well.
So when we're looking at atdistress assets, we tend to look
more at hotels because we've gotbetter data.
Uh, and and we've also got ateam that's more international.
Uh, on my office team, it tendsto very much be local.
unknown (12:11):
Okay.
SPEAKER_00 (12:11):
Um, so earlier in your career, uh the right at the
very beginning, you were anoptometrist, and then you were a
retailer, and it eventuallyended up running hundreds of
stores.
So let's go back to thatfoundation.
And you sold that store in 2011,if I'm correct.
SPEAKER_01 (12:28):
Yes.
I I had a joint venture partnerin the about halfway through the
uh development of that business,I sold half of it to a big
conglomerate called Luxotica,which is the world's biggest
spectacle manufacturer.
Um, and that was a greatpartnership that lasted for many
years.
(12:49):
Um and as part of thatpartnership, when we sold them
half of when I sold them half ofmy business, they a few years
later sold me half of SunglassHeart Europe, which we then
integrated and combined with thebusiness.
And then it was a big businesswith 240 stores, and they bought
the whole business.
(13:09):
Well, they bought my half backoff me a few years later, which
was fine.
unknown (13:14):
Right.
SPEAKER_00 (13:14):
So that was retail.
Um, and then I since then you'vemuch more been in um in real
estate.
So at what point did you realizethat um that retail rather than
retail you were wanted more realestate development, uh making
cities, mixed use developments,and so forth, rather than
running stores?
SPEAKER_01 (13:35):
I think I think I'd started really in in the late
80s, in spending a little bitmore time in real estate, and it
had just gradually progressedfrom then.
And I think from about 2000onwards, really, I was full-time
(13:55):
on property.
But I built a team that workedwith me for many years in the
retail business who I'm still intouch with.
Um, and they uh I was thechairman of the business, but
they ran it day to day.
So I made the big decisions andI made I looked at the sites and
I looked at the performance on aweekly basis and I had board
(14:18):
meetings, but I wasn't involvedin the day-to-day operation of
that business in the last sevenor eight years.
SPEAKER_00 (14:24):
Even to this day, when you have hotels, you you
have a lot of operations thatare part of your um.
SPEAKER_01 (14:31):
We operate most of them.
SPEAKER_00 (14:32):
You operate most of them.
So that is operations, and thenyou have the real estate part,
which is uh buying anddeveloping.
So how do you navigate betweenthose two, the different
mindsets needed to uh operate inthis?
SPEAKER_01 (14:45):
You know, I'm the first one to admit I'm not
really a hotel operator.
I'm a real estate investor whoknows enough about operations to
make a judgment as to whether Ibuy something, but I I couldn't
really tell you the details ofwhat everybody does in the hotel
and how they contribute exactly.
(15:07):
You know, I've never been ahotel manager.
Um, I can look at a P ⁇ L andtell you whether it makes money
or where it's wrong, but how tofix it, I I don't know.
And and I think this comes backto the something we touched on
earlier about running abusiness, which is hiring the
right people for the job.
And, you know, I have to saythat in our in the business
(15:30):
right now, we've hired abrilliant guy to run our hotel
business, a guy called CodyBradshaw, who came from Starwood
Capital, who's re-engineeringthe whole of the operational
side of the business andcentralizing a lot of the key
commercial team.
Um so he's built a fantastic uhback office, which we can now
(15:53):
use to expand our business ormanage things for third parties.
So he's far better at me than meat uh organizing that kind of
thing.
And I think we've just we maybeby luck or judgment, and it's
something we talked aboutearlier, hiring the right
person, um, motivating them andletting them get on with it.
SPEAKER_00 (16:14):
Yeah, it's very important as we were discussing
during lunchtime.
But I am curious that you knowyou have developers who will
develop, you know, who will buya piece of land or develop it
and then they're out of thatdeal.
But you like to own the entirechain.
So you have experiences.
Now that is a choice that you'vemade that you are into running
and operating those hotels, evenif you have hired the right
(16:37):
person, and in the real estateside.
So, how important is it for you,or what is the the thing thought
behind going into operations aswell as the real estate side?
SPEAKER_01 (16:47):
When we start the first hotel that I bought, I
didn't really understandanything about the operation at
all.
And so I signed a lease withHilton.
Um they paid me a fixed rent,and I still have one or two of
those leases left actually inour business.
And that was great.
I thought I'd done really welluntil I realized one day that
the rent they were paying me wasabout half of the EBITDA, half
(17:11):
of the earnings.
And so I actually figured outthat even if the business got
difficult, I'd quite like tohave both halves of that income.
And so I was leaving a lot onthe table.
And so then we did the firstmanagement contracts, and then I
realized, of course, that givingit to somebody else to manage
isn't always the best idea.
And so you learn out ofcuriosity, really, you learn how
(17:35):
that you take a little bit morerisk.
You take a controlled amount ofrisk and operate it yourself.
And if you, you know, thedownside is isn't that bad,
because the worst case scenariois that you get somebody, if you
mess it up, you get someone goodin to manage it.
But fundamentally, you've gotcontrol over the control of the
(17:57):
operation is crucial to thevalue of the property.
You can't dissociate the two.
If your hotel doesn't operatewell, it'll never have a high
capital value because no onewill ever believe that it can.
SPEAKER_00 (18:11):
Okay, so I want to pivot to uh large-scale
projects.
Um few examples show moreclearly than the Panama
Pacifico, a city that you arehelping build from the ground
up.
It's more than a development,it's actually practically a new
city with 20,000 homes,commercial spaces, logistic
hubs, even schools, all builtthrough a public-private
(18:34):
partnership with the Panamiangovernment.
So, what is it like to lead adevelopment at that humongous
scale where you're effectivelymanaging a community inside
another different country?
SPEAKER_01 (18:47):
Um it's it's been challenging.
It's been a great opportunity,it's an amazing opportunity.
You know, I saw it very earlyon.
I saw an amazing piece of landadjacent to a major, a major
city that was highly built upand very congested.
(19:09):
And it seemed to me very clearthere was only one way, one
place that this city coulddevelop.
And this was on the other sideof the canal.
The difficulty, of course, isgetting the infrastructure
right.
So I think it was the rightthing to do.
Um, it's going to take longerthan anybody anticipated, and
that's quite a frequent thing indevelopment.
(19:32):
You don't know how long it'sgoing to take.
Um, I think the concept wasright to build this, you know,
we're going back now almost 15years when we came up with this
idea and pitched it to thePanamanian government of a
sustainable community.
And it was just beginning tosort of sustainable communities
(19:52):
were just beginning to be talkedabout in in Europe and the US.
And of course, when you go tosee the president of Panama and
you say a sustainable community,and he says, What the hell's
that?
Um, he didn't really understand.
But eventually, when weexplained it, um, they did
understand, and it was the rightthing to do.
Uh today we've built about, Ithink, 6,000 homes, we've built
(20:15):
four million square feet of umcommercial and industrial.
I think there's about eight,nine or ten thousand people
living there, about the sameworking there.
Um then we will ultimately buildup to about 30,000 homes, but
it'll take time.
Um and we have lots of differentcommunities.
(20:37):
We have, I think, nine schoolsso far.
Uh, we may have a smalluniversity campus if you have
some interest there, let meknow.
And um it it will be great, butit has taken a lot longer
because largely becausesuccessive governments, uh
whether it was through financialissues or incompetence, didn't
(21:01):
deliver the infrastructure inthe time that they promised.
And of course, when you'redealing in a country in a small
country like that, you know,your um your recourse is
limited.
You know, if if I did a dealwith the US government and they
didn't supply theinfrastructure, you know, pretty
soon there'd be some kind oflegal issue.
(21:22):
But if you're in a country likePanama, it's probably not a
great idea to try and sue thegovernment because you won't
win.
Um and so we've had to sit tightand wait.
And you know, we've managed thebusiness and it's done, it's
done well.
It's just taken longer than weanticipated.
But now the infrastructure'sbeing built.
I think the new president'sgreat.
(21:43):
Um, and they have followedthrough on what they said they'd
do.
So Panama overall is a goodplace to do business, a very
open economy.
It's a dollar economy, it's gota good rule of law.
Um, and we're very positiveabout it, but it's just taken a
bit longer than we.
Would have liked.
SPEAKER_00 (22:01):
Right.
And so uh it's an emergingmarket.
There are unique challenges,different legal framework, um,
infrastructure, long-termcommitment.
So, how do you stay committed toa project that is going to span
decades?
SPEAKER_01 (22:16):
I think, well, first of all, it was it was my idea.
With I have a partner in it, andit was jointly our our idea to
do this.
Um, and because of that sense ofownership, you know, I have to
stay focused and committed onit.
Um, we have a commitment to thegovernment there, we have a
commitment to our staff there,and other stakeholders and
(22:38):
people living and working there.
Right.
And so it's a it's a it's alive, it's a real live entity,
and so there are always thingsgoing on.
Um, and you have to visitregularly and stay in touch with
what's going on and hire theright team locally.
You know, clearly it's notsomething that we can manage by
remote control from outside ofthe of the country, and luckily
(23:01):
we've got a very good managementteam there who've managed it
well.
Um, but you've got to you'vereally got to have a long-term
view and you've got to believein the project and build
quality.
If you start cutting corners oryou start being short-term, I
don't think it will work.
So we've had a very good uhlong-term vision of the project.
(23:23):
We've built amazing quality thatperhaps other people haven't
done in that region.
Um and as a result of that, thebig corporations that have moved
there have all stayed.
SPEAKER_00 (23:35):
Okay, so beyond scale, which obviously this is a
huge, big scale, and I don'tknow if you're planning other
huge townships of that scale,uh, but you're also creating and
designing experiences.
So let's talk about what makeshospitality real estate so
transformative.
Um you've developed hotels,leisure clubs, even entire
(23:57):
cities.
What excites you about mostabout hospitality real estate
today?
Do you see is there a momentumsomewhere?
Do you see some trends?
Are you thinking about new waysof space?
SPEAKER_01 (24:11):
I think within um hospitality or hotels, there are
many, many different levels ofluxury, lifestyle, budget, and
each one of them you know hasdifferent developments,
different facets that are thingsthat are changing.
(24:33):
And so I think it's important tohave a team.
I mean in in our business today,we have mentally I think I have
three um or four buckets in ourbusiness.
So we have a very successfulbusiness which has which is
select service hotels, uhHoliday and Express being the
(24:56):
biggest one with the biggestfranchisee in Europe for that.
Um then we have something callediconic luxury hotels, which is a
jewel which is lots of reallyindividual boutique hotels,
usually, usually on average ofsort of 50 to 100 keys.
Um in iconic physical buildingsin great locations.
(25:20):
Again, that has its ownmanagement team.
We have an asset management teamthat then covers our what I call
big box hotels.
So the big Hilton's, Fairmonts,Marriott's in big cities.
Uh, and then we have a team thatmanages resort hotels for us
predominantly in Europe.
And within each of those, thereare things, different things
(25:42):
happening in in luxury hotels.
You know, how do you you have toconstantly be redefining what's
luxury?
And luxury isn't just having theright um amenities in the room,
it's what do people want?
What does people now have accessto so many different things at
(26:04):
home through their iPad, throughshopping online, doing what is
so?
How do you cr give them adifferent experience?
What is the guest experiencethat they're looking for?
Something that they can't getevery day.
And it could be wellness, itcould be sport, it could be
talks.
(26:25):
I I mean I don't know, but Ithink you have to be, you have
to have a team that's dedicatedlooking at all these things all
the time.
Otherwise, your competitorswill.
And by the way, there's nothingwrong with watching what your
competitors are doing in otherparts of the world and importing
it.
Uh, it's just doing it well.
So, in in a budget hotel, forexample, what does that mean?
(26:47):
Well, to me, that means peoplewant great Wi-Fi, they want a
good shower, decent airconditioning, and a comfortable
bed.
The rest of it's probablyirrelevant.
So, how do you make a differencethere?
Well, we make a difference bymaking sure that we do all of
that right, and then we makesure that we do it on an
(27:09):
efficient basis.
So there'll be more AI, there'llbe more automation, there'll be
um more technology.
So, for example, I don't, youknow, as I said, you've got a
comfortable bed with decentlinen and good Wi-Fi and a
shower.
That's you've ticked thoseboxes, but that's not really the
thing.
(27:29):
For me, the next thing there isseamless check-ins.
So you'll you'll download yourapp, right?
As you walk in the door, it'llgeolocate where you are.
It'll say, Welcome to theHoliday and Express in Bista.
Um, your room is number 535.
(27:49):
You'll go, you'll walk up toyour room with your phone and
the door will open.
You don't need to check in.
I don't understand.
It's the most awful process.
And especially when it's on aMonday morning and you're
arriving in your hotel and it'sthree deep at the check-in, and
my heart sinks.
I've got to wait while someonehas this protracted
(28:11):
conversation, trying to scam anupgrade, and it drives me up the
wall.
And they sit there for 10minutes negotiating.
I said, Well, I was in this roomlast time and this and that.
I don't want to speak to anyoneif I've got off a long flight.
I just want to go to my room.
I don't want to wait for my bag.
I don't want to talk to anybody.
(28:32):
I just want to know that I'vegot the best room possible, that
I've got that I'm recognized,and that can all be done
seamlessly, but it's not.
Hotel companies have been reallypoor at that.
SPEAKER_00 (28:44):
You know, this is very interesting.
We in in the in hotel business,we say we are a very
interaction-intensive.
We want to provide human beingsand and you know, uh welcome.
Yeah.
But what at the end of the day,if the guest is not wanted, he
or she just wants to go to theirroom, then giving good service
(29:04):
means not giving them anyservice.
SPEAKER_01 (29:07):
In a budget hotel, it might mean just walking
straight in.
But in a luxury hotel, that isthat you walk through the door
and a guest service person has alittle iPad and it pings up.
Ah, the dean.
Dean Upnage has come.
Okay.
And it says who you are, andit's got a picture of you.
Welcome to the hotel, Dean.
(29:29):
Welcome.
Let me take you to your room.
I already know who you are.
I already know what yourpreferences are.
I'm going to walk you to theroom.
So you've got guest recognition,you've got that, but it's
seamless.
You haven't had to stand in aline and talk to someone who may
or may not know, he may not havethat information.
That's all possible to do today.
(29:50):
We're not talking about rocketscience.
We're not talking aboutgeneration 5.0 in open AI.
You know, this is really simplestuff, but we do it badly.
Including in my hotels, by theway.
SPEAKER_00 (30:04):
I was about to say I'm looking forward to the day
when I go into one of yourhotels and someone says, Dean
Upneja, welcome.
It should happen.
It should happen.
SPEAKER_01 (30:13):
It does, it does happen in some of our hotels.
And it happens when we've gotnumber plate recognition on the
cars, or if there's a driver,and the driver is actually being
trained to send a text messagefrom the car when he's two
minutes out.
I'm with Dean Upnager arrivingin two minutes.
(30:34):
And so you'll pull up in the carand someone will meet you.
It does work on occasion, butjust not enough.
SPEAKER_00 (30:41):
Yeah.
When I go into Home Depot and Iopen up their app, it instantly
geolocates and knows that I aminside a home, and it will
immediately start giving me,okay, go to this aisle.
SPEAKER_01 (30:53):
It can actually direct you to the aisle and it
can flick up promotions.
It's it's simple.
But why don't we do it?
Don't know.
Go and ask Hilton or Mario.
SPEAKER_00 (31:04):
Okay, so uh building at this scale takes resilience,
patience, and a willingness totake calculated risks.
So let's talk about thechallenges and mindset it takes
to stay the course.
Is spotting hidden potential?
So you see a distressed assetand you imagine what it would
be.
Uh, is it about data, is itabout intuition, or just you
(31:27):
build up this experience overtime?
SPEAKER_01 (31:30):
I think it's largely experience.
Um, but it's also being aware ofwhat is the latest offering and
figuring out whether you canactually operate it yourself or
you want to use a brand.
It's to some extent intuition asto whether you feel that you can
(31:52):
operate it yourself.
And then you've got to, ofcourse, go into the detail.
Can you actually fill thishotel?
And if you fill it on your ownwithout using a brand, will you
get enough rate?
Um, so it's got to be back whenyou're making these decisions,
Yunny, you're talking aboutquite a lot of money, and gut
feeling isn't enough.
You need the data to back it up.
(32:13):
And in some cases, we mostly weget it right, but sometimes we
don't.
Sometimes we extrapolate theperformance in the past and
think that's a guarantee ofwhere it's going to be in the
future, and it just doesn'thappen for a bunch of reasons.
Maybe our analysis wasn't goodenough.
Uh, maybe the market changed,maybe we weren't aware of a load
(32:37):
of new competition that wascoming in, and it's happened to
me recently on something.
SPEAKER_00 (32:41):
So this is the last question, which is um you've
built through multiple economiccycles, um, always with a
long-term view, and we've seenthat over and over again in your
perspective.
When you look ahead, whatexcites you most about the
future of hospitality realestate?
What do you think will inspirethe next generation of leaders
(33:02):
to build places that trulypeople want to go and stay in?
SPEAKER_01 (33:06):
One of the great things about hospitality is that
whatever happens with AI, thereare you're still going to need
hospitality.
And I think that there will be aneed for increasing amounts of
hospitality as people have morespare time.
Either there'll be less jobs orpeople will work less hours
(33:30):
because of AI.
And it's here to stay, it's notgoing away.
There's going to be a massivereordering inside businesses,
and it, you know, it it could belegal, accounting, medicine, it
could be every business, everyprofession will be impacted by
AI.
And none of them, in my opinion,will be taking on more people
(33:52):
because of AI.
They'll be managing with lesspeople, and therefore that means
more leisure time.
And so leisure is the rightplace to be, but hospitality uh
is a great place to be.
I think people want experientialtravel, and experiential travel
(34:13):
might be um it might be cruises,it might be fitness and wellness
and health.
I don't know what exactly thetrends are going to be, but I
think that it's got a very,very, I think there's a very
clear need for hospitality.
Um I think that it will morphover time into different areas
(34:38):
that we don't yet know, but forsure, as a long-term investment
thesis, it's the right, it's aright place to be.
Um And I think that, you know,if you've got the if you've got
assets in the right locationwith good bones, you can
constantly reinvent them asyears go by.
(35:01):
But you've got to have the rightasset in the right place.
SPEAKER_00 (35:05):
Fantastic.
Um before we let you go, a quicklightning round, short
questions.
First thing, first word, firstphrase that comes to your mind.
So let's start.
Um, London or Monaco?
Better espresso.
SPEAKER_01 (35:20):
Monaco.
SPEAKER_00 (35:21):
What's your favorite leisure time activity,
completely apart from work?
SPEAKER_01 (35:26):
Driving fast cars.
SPEAKER_00 (35:28):
Oh, okay.
Thought you were gonna sayrunning.
And that.
And that as well.
SPEAKER_01 (35:33):
If I had time, I would do more cars, but I don't.
So running is easier, it'squicker.
SPEAKER_00 (35:37):
Okay.
If your investment philosophyhad a theme song, what would it
be?
I know this is a hard one.
I'll come back to that.
Let me come back to that one.
One word your team would use todescribe your leadership style.
Engaged.
Okay, very good.
(35:57):
Your recommendation for a book,a podcast, or source material
for inspirational, informed, andinnovative thought leadership on
the business of real estate canbe a current or a source that
has withstood the test of time.
SPEAKER_01 (36:12):
I read an interesting book recently.
Um, not necessarily the best,but the most interesting book
I'd read recently was the thehistory of Conde Nast.
What went right and what wentwrong.
And actually, where they I thinkfailed at the end to understand
digital transformation.
unknown (36:33):
Okay.
SPEAKER_01 (36:33):
So they had a great business model.
They were world leaders, theywere market leaders, they had
the best brands, but somehowthey failed to understand the
changes that were going on.
SPEAKER_00 (36:46):
Ian, uh, thank you so much.
That was a masterclass incapital strategy,
entrepreneurial courage, andglobal chess moves that you've
been making.
Thank you for candor and thankyou for coming to our school.
SPEAKER_01 (37:00):
It's a pleasure, and thank you for having me.
SPEAKER_00 (37:03):
So, to our listeners, if you're going to
play big, play smart and beready to bounce when the tide
turns.
Special thanks to the team thatproduced this.
I think it's important.
Producer Mara Littman, RachelHamlin, Land Hugh, Isabella
Lakin, and Alex Dietz.
The entire team at BostonUniversity School of
Hospitality.
(37:24):
To keep up with theDistinguished Podcast, be sure
to subscribe wherever you listento your favorite podcast.
You can also learn more aboutexperience innovation in our
undergrad and graduate programsby visiting pu.edu slash
hospitality.
Have a wonderful day.
Markets crash, investors panic, most run for
cover, but not Ian Livingstone.
In 1987, when the world of realestate was falling apart, he and
his brother stepped in, turningcrisis into opportunity, and
opportunity into a 30 billionpound global property
enterprise.
(00:26):
Welcome to the DistinguishedPodcast.
I'm Arun Rupneja, Dean of theBoston University School of
Hospitality Administration, andI'm thrilled to be speaking
today with Ian Livingstone, whohas built a remarkable and quite
significant global real estateportfolio.
Ian has spent more than threedecades shaping skylines and
redefining how cities grow.
(00:47):
As co-founder of London andRegional Properties, he's guided
one of the UK's largest privatereal estate groups through
multiple economic cycles withcalm judgment and a long-term
view.
But property wasn't where hebegan.
Ian started out as anoptometrist, then moved into
retail, opening and runningstores.
(01:09):
Those early lessons in peopleand places later shaped how he
built communities and cities.
Welcome, Ian Livingstone.
SPEAKER_01 (01:17):
Thank you very much for the introduction.
It's great to be here.
SPEAKER_00 (01:20):
Fantastic.
So you began your career in oneof the most turbulent moments in
market history.
So let's start there at thebeginning.
It's 1987.
The markets are crashing.
Everyone is selling.
What did you see that othersdidn't see?
Some people wait for sunshine,but you wait for storms.
(01:42):
What's the psychology behindmaking your best moves when the
world's panicking?
SPEAKER_01 (01:48):
I think the simple answer to that is to be
contracyclical.
It's an easy answer to give, butit's not quite so easy to do.
In 1987, the world was incrisis.
People were fleeing real estate.
They were selling whatever theycould in order to raise money to
meet commitments, whether it waspensions or financing.
(02:12):
And we bought things atunbelievably low prices, prices
virtually halved.
The problem when that happens,of course, is that the banks are
also forcing liquidity.
And so it's very hard to get abank, to find a bank that's
going to back you in buyingthese assets because although
(02:33):
the prices are low, real estateneeds leverage.
So it's a combination of findingall the scared banks that are
forcing people to sell andfinding a bank that believes in
you, that thinks that yourthesis is right, that values
will recover.
And we managed to put the twotogether in those days.
It's much harder to do now.
SPEAKER_00 (02:55):
But have you continued doing since then?
Every time there is a pullbackin the market, you are jumping
in?
SPEAKER_01 (03:01):
We generally try to, but the world got a lot more
complicated because when westarted, property was owned by
big institutions, usually uhpension funds, life insurance
companies, um, as well as umlisted companies.
And they were all very, veryslow.
They were like a herd of sheep.
(03:23):
When one person boughtsomething, the rest all followed
varying degrees of success, butthey kept on doing the same
thing.
And then when something wentwrong, they all decided to sell
together.
And so if you did nothing elsebut the opposite of what the
institutions were doing, youcould make money.
(03:44):
That's all you had to do, the exthe polar opposite of what they
did.
The world's changed now, though,because there are many, many uh
investment funds.
And investment funds are full ofsmart people who have got huge
amounts of money to deploy.
It's not their money, it's LPmoney, but they're there to
(04:05):
deploy it and they're there tomake money, and they only make
money when they deploy it.
So suddenly, instead of havingthose sort of markets to
ourselves, it became a lot morecompetitive.
SPEAKER_00 (04:17):
Everyone followed what you were doing and see,
okay.
SPEAKER_01 (04:23):
Um but for sure, they many people saw those
opportunities and learned thoselessons of different cycles.
SPEAKER_00 (04:30):
You've described your approach as patient but
bounce-ready.
How do you keep that balance,staying calm through quiet
stretches, yet confident enoughto move when these rare
once-in-a-decade opportunitiesare available?
SPEAKER_01 (04:44):
Aaron Powell When you're an entrepreneur, it's
quite hard to sit on your hands.
Right now I'm sitting on myhands.
Uh, and it's it's slightlyuncomfortable because I have to
manage the day-to-day businesswithout having that excitement
of finding something that umwhere I have a high degree of
conviction.
Right now I don't have a highdegree of conviction on
(05:07):
anything, particularly.
I will come on to that in duecourse.
I think there are opportunities,but maybe they're not priced
right at the moment.
And I think also uh yourbusiness tends to change as as
time goes by.
And for us, I think we probablyhave two different pockets of
capital.
(05:28):
One is long-term family assets,which have a less volatile and
and have a lower return, but areyou know there for the long term
for family.
Um, and then there's assetswhere we expect to make money by
buying and selling, and I thinkthose are the ones that are a
bit more difficult.
SPEAKER_00 (05:48):
So I'm glad you came up to um uh right now because
that was going to be my nextquestion, which is that we are
in a moment of uncertainty.
Um interest rates are up, asignificant number of office
buildings are empty, inflationis continuing.
So is this 1987 all over again,or is this something new?
SPEAKER_01 (06:09):
No, it's it doesn't, it's not, it doesn't have the
peaks and troughs of 87.
Um what's happened is it's a bitstagnant.
Deal flow is down.
So people people are, I thinkthat they learned their lessons
after the last few recessions.
The banks learnt their lessons.
Uh people are notover-leveraged.
(06:30):
What happened before in 1987were people were borrowing 80,
90, 100 percent, and so thebanks, you know, caught a cold
and immediately foreclosed onpeople.
Um this time people are notforced because the leverage is
much lower.
People have borrowed 50, 60percent.
Even if prices are down a bit,the bank's not going to
(06:52):
foreclose.
Um so we don't, we're not seeingthe same amount of distress this
time.
What's happened is people arejust not buying and not selling.
And so there's a lot of peoplelike us are sitting on the
sidelines.
I think you can buyprogrammatically if you've got a
specific business that you'retrying to roll up, but if you
(07:13):
don't, looking for one-offdeals, they're a bit few and far
between at the moment.
And uh, and I think until wehave more clarity on what's
gonna happen with inflation andrates, that's gonna be the the
case for some time.
SPEAKER_00 (07:28):
And also, as you mentioned, there are a lot of
other investors, uh, PE andpeople who are ready to deploy
other people's capital, whichmeans that you're not gonna have
property going down to 50% ofits value because it'll get
snapped up.
SPEAKER_01 (07:43):
It'll get snapped up very quickly.
Um I think one of theopportunities that we will see
is that people, funds that areseven, eight, nine years old now
need to sell because the LPs arelooking for their money back.
Uh and many of those won't havegreat returns, but they still
need to get cash back to theinvestors who are being diluted
(08:06):
every year by fees.
And so they will be forced tosell off assets at whatever
price they can get.
So there may be someopportunities, but again, as you
say, they're not going to bedramatically down.
SPEAKER_00 (08:21):
So since you mentioned that you don't see a
whole lot of good opportunitiesaround, so when you do see a
distressed asset which needs alot of love and huge amounts of
capital inflow, what are theindicators that help you
understand whether to invest inthat property or not?
SPEAKER_01 (08:39):
I think it's fundamentally about the
long-term position of the assetand the brand that you feel that
you want to put on it if ithasn't got a brand or if you
feel that the brand is going tobe appropriate for that
location.
So you need the right brand, theright location, the right bones
of the property.
Um, and then you've got to umspend money, you know,
(09:02):
carefully.
It's very easy.
The problem that one of theproblems that we have is in, and
if I perhaps specifically talkabout hotels for a minute, more
than commercial real estate.
One of the problems is this.
Many of these hotels areoperated under a franchise.
And when the hotel gets sold,immediately, Hilton, Marriott,
(09:25):
Intercon, whoever it is, theycome along and they give you a
long, long list of everythingthat they'd like to see in the
hotel.
And that is a major issue as aproperty owner because those
things that they want for thebrand are not necessarily
consistent with a return oncapital.
(09:45):
And so there's this immediatesort of dichotomy between what
they want and what actually isgoing to make money.
And if you own enough hotels andyou you've got a good
relationship with the likes ofMarriott and Hilton, you can
negotiate that PIP, the propertyimprovement plan.
You can negotiate it quite hard.
But if you don't, then it'sincredibly destructive to the
(10:08):
value of the seller, because thebuyer is going to look at it and
say, well, Marriott wants me tospend$15 million on this hotel,
and I don't think it's so I'mgoing to have to take that off
the price.
So it's it's value destructive,and I think the brands need to
be more user-friendly to theirowners in some cases, and be
(10:33):
more sensible when they set outthis PIP on a sale.
So that's a it's a very bigissue to get right.
SPEAKER_00 (10:41):
Yeah, this is music to the ears of all the franchise
who are franchising theseproperties and are faced with
these huge amounts of PIP.
Um so since you do areinterested in um distressed
assets, um a strange question toask.
Well, what kind of distressedassets are your favorite?
Are these hotels, are thesebuildings, are these office
(11:04):
tower, leisure assets?
SPEAKER_01 (11:06):
I think it's easier to price a hotel because you've
got very good data about what'sgoing on in the neighborhood,
what's the competitive set.
We have STR data, we can tell onevery on any given day what the
competitive set's doing, whatoccupancy, what rate.
And so we can take a pretty goodstab at how that's going to
(11:27):
perform and what we can affordto pay for it.
Um, commercial real estate ismuch more of a local business.
It's really hard to know.
You can have an office buildingon one corner that will lease up
better than one two blocks awayor three blocks away.
It's much more difficult toknow.
It's more of a local game, and II wouldn't do it because I don't
(11:48):
have as good data.
Um, and I don't know the marketsoutside of my own home market, I
don't know them as well.
So when we're looking at atdistress assets, we tend to look
more at hotels because we've gotbetter data.
Uh, and and we've also got ateam that's more international.
Uh, on my office team, it tendsto very much be local.
unknown (12:11):
Okay.
SPEAKER_00 (12:11):
Um, so earlier in your career, uh the right at the
very beginning, you were anoptometrist, and then you were a
retailer, and it eventuallyended up running hundreds of
stores.
So let's go back to thatfoundation.
And you sold that store in 2011,if I'm correct.
SPEAKER_01 (12:28):
Yes.
I I had a joint venture partnerin the about halfway through the
uh development of that business,I sold half of it to a big
conglomerate called Luxotica,which is the world's biggest
spectacle manufacturer.
Um, and that was a greatpartnership that lasted for many
years.
(12:49):
Um and as part of thatpartnership, when we sold them
half of when I sold them half ofmy business, they a few years
later sold me half of SunglassHeart Europe, which we then
integrated and combined with thebusiness.
And then it was a big businesswith 240 stores, and they bought
the whole business.
(13:09):
Well, they bought my half backoff me a few years later, which
was fine.
unknown (13:14):
Right.
SPEAKER_00 (13:14):
So that was retail.
Um, and then I since then you'vemuch more been in um in real
estate.
So at what point did you realizethat um that retail rather than
retail you were wanted more realestate development, uh making
cities, mixed use developments,and so forth, rather than
running stores?
SPEAKER_01 (13:35):
I think I think I'd started really in in the late
80s, in spending a little bitmore time in real estate, and it
had just gradually progressedfrom then.
And I think from about 2000onwards, really, I was full-time
(13:55):
on property.
But I built a team that workedwith me for many years in the
retail business who I'm still intouch with.
Um, and they uh I was thechairman of the business, but
they ran it day to day.
So I made the big decisions andI made I looked at the sites and
I looked at the performance on aweekly basis and I had board
(14:18):
meetings, but I wasn't involvedin the day-to-day operation of
that business in the last sevenor eight years.
SPEAKER_00 (14:24):
Even to this day, when you have hotels, you you
have a lot of operations thatare part of your um.
SPEAKER_01 (14:31):
We operate most of them.
SPEAKER_00 (14:32):
You operate most of them.
So that is operations, and thenyou have the real estate part,
which is uh buying anddeveloping.
So how do you navigate betweenthose two, the different
mindsets needed to uh operate inthis?
SPEAKER_01 (14:45):
You know, I'm the first one to admit I'm not
really a hotel operator.
I'm a real estate investor whoknows enough about operations to
make a judgment as to whether Ibuy something, but I I couldn't
really tell you the details ofwhat everybody does in the hotel
and how they contribute exactly.
(15:07):
You know, I've never been ahotel manager.
Um, I can look at a P ⁇ L andtell you whether it makes money
or where it's wrong, but how tofix it, I I don't know.
And and I think this comes backto the something we touched on
earlier about running abusiness, which is hiring the
right people for the job.
And, you know, I have to saythat in our in the business
(15:30):
right now, we've hired abrilliant guy to run our hotel
business, a guy called CodyBradshaw, who came from Starwood
Capital, who's re-engineeringthe whole of the operational
side of the business andcentralizing a lot of the key
commercial team.
Um so he's built a fantastic uhback office, which we can now
(15:53):
use to expand our business ormanage things for third parties.
So he's far better at me than meat uh organizing that kind of
thing.
And I think we've just we maybeby luck or judgment, and it's
something we talked aboutearlier, hiring the right
person, um, motivating them andletting them get on with it.
SPEAKER_00 (16:14):
Yeah, it's very important as we were discussing
during lunchtime.
But I am curious that you knowyou have developers who will
develop, you know, who will buya piece of land or develop it
and then they're out of thatdeal.
But you like to own the entirechain.
So you have experiences.
Now that is a choice that you'vemade that you are into running
and operating those hotels, evenif you have hired the right
(16:37):
person, and in the real estateside.
So, how important is it for you,or what is the the thing thought
behind going into operations aswell as the real estate side?
SPEAKER_01 (16:47):
When we start the first hotel that I bought, I
didn't really understandanything about the operation at
all.
And so I signed a lease withHilton.
Um they paid me a fixed rent,and I still have one or two of
those leases left actually inour business.
And that was great.
I thought I'd done really welluntil I realized one day that
the rent they were paying me wasabout half of the EBITDA, half
(17:11):
of the earnings.
And so I actually figured outthat even if the business got
difficult, I'd quite like tohave both halves of that income.
And so I was leaving a lot onthe table.
And so then we did the firstmanagement contracts, and then I
realized, of course, that givingit to somebody else to manage
isn't always the best idea.
And so you learn out ofcuriosity, really, you learn how
(17:35):
that you take a little bit morerisk.
You take a controlled amount ofrisk and operate it yourself.
And if you, you know, thedownside is isn't that bad,
because the worst case scenariois that you get somebody, if you
mess it up, you get someone goodin to manage it.
But fundamentally, you've gotcontrol over the control of the
(17:57):
operation is crucial to thevalue of the property.
You can't dissociate the two.
If your hotel doesn't operatewell, it'll never have a high
capital value because no onewill ever believe that it can.
SPEAKER_00 (18:11):
Okay, so I want to pivot to uh large-scale
projects.
Um few examples show moreclearly than the Panama
Pacifico, a city that you arehelping build from the ground
up.
It's more than a development,it's actually practically a new
city with 20,000 homes,commercial spaces, logistic
hubs, even schools, all builtthrough a public-private
(18:34):
partnership with the Panamiangovernment.
So, what is it like to lead adevelopment at that humongous
scale where you're effectivelymanaging a community inside
another different country?
SPEAKER_01 (18:47):
Um it's it's been challenging.
It's been a great opportunity,it's an amazing opportunity.
You know, I saw it very earlyon.
I saw an amazing piece of landadjacent to a major, a major
city that was highly built upand very congested.
(19:09):
And it seemed to me very clearthere was only one way, one
place that this city coulddevelop.
And this was on the other sideof the canal.
The difficulty, of course, isgetting the infrastructure
right.
So I think it was the rightthing to do.
Um, it's going to take longerthan anybody anticipated, and
that's quite a frequent thing indevelopment.
(19:32):
You don't know how long it'sgoing to take.
Um, I think the concept wasright to build this, you know,
we're going back now almost 15years when we came up with this
idea and pitched it to thePanamanian government of a
sustainable community.
And it was just beginning tosort of sustainable communities
(19:52):
were just beginning to be talkedabout in in Europe and the US.
And of course, when you go tosee the president of Panama and
you say a sustainable community,and he says, What the hell's
that?
Um, he didn't really understand.
But eventually, when weexplained it, um, they did
understand, and it was the rightthing to do.
Uh today we've built about, Ithink, 6,000 homes, we've built
(20:15):
four million square feet of umcommercial and industrial.
I think there's about eight,nine or ten thousand people
living there, about the sameworking there.
Um then we will ultimately buildup to about 30,000 homes, but
it'll take time.
Um and we have lots of differentcommunities.
(20:37):
We have, I think, nine schoolsso far.
Uh, we may have a smalluniversity campus if you have
some interest there, let meknow.
And um it it will be great, butit has taken a lot longer
because largely becausesuccessive governments, uh
whether it was through financialissues or incompetence, didn't
(21:01):
deliver the infrastructure inthe time that they promised.
And of course, when you'redealing in a country in a small
country like that, you know,your um your recourse is
limited.
You know, if if I did a dealwith the US government and they
didn't supply theinfrastructure, you know, pretty
soon there'd be some kind oflegal issue.
(21:22):
But if you're in a country likePanama, it's probably not a
great idea to try and sue thegovernment because you won't
win.
Um and so we've had to sit tightand wait.
And you know, we've managed thebusiness and it's done, it's
done well.
It's just taken longer than weanticipated.
But now the infrastructure'sbeing built.
I think the new president'sgreat.
(21:43):
Um, and they have followedthrough on what they said they'd
do.
So Panama overall is a goodplace to do business, a very
open economy.
It's a dollar economy, it's gota good rule of law.
Um, and we're very positiveabout it, but it's just taken a
bit longer than we.
Would have liked.
SPEAKER_00 (22:01):
Right.
And so uh it's an emergingmarket.
There are unique challenges,different legal framework, um,
infrastructure, long-termcommitment.
So, how do you stay committed toa project that is going to span
decades?
SPEAKER_01 (22:16):
I think, well, first of all, it was it was my idea.
With I have a partner in it, andit was jointly our our idea to
do this.
Um, and because of that sense ofownership, you know, I have to
stay focused and committed onit.
Um, we have a commitment to thegovernment there, we have a
commitment to our staff there,and other stakeholders and
(22:38):
people living and working there.
Right.
And so it's a it's a it's alive, it's a real live entity,
and so there are always thingsgoing on.
Um, and you have to visitregularly and stay in touch with
what's going on and hire theright team locally.
You know, clearly it's notsomething that we can manage by
remote control from outside ofthe of the country, and luckily
(23:01):
we've got a very good managementteam there who've managed it
well.
Um, but you've got to you'vereally got to have a long-term
view and you've got to believein the project and build
quality.
If you start cutting corners oryou start being short-term, I
don't think it will work.
So we've had a very good uhlong-term vision of the project.
(23:23):
We've built amazing quality thatperhaps other people haven't
done in that region.
Um and as a result of that, thebig corporations that have moved
there have all stayed.
SPEAKER_00 (23:35):
Okay, so beyond scale, which obviously this is a
huge, big scale, and I don'tknow if you're planning other
huge townships of that scale,uh, but you're also creating and
designing experiences.
So let's talk about what makeshospitality real estate so
transformative.
Um you've developed hotels,leisure clubs, even entire
(23:57):
cities.
What excites you about mostabout hospitality real estate
today?
Do you see is there a momentumsomewhere?
Do you see some trends?
Are you thinking about new waysof space?
SPEAKER_01 (24:11):
I think within um hospitality or hotels, there are
many, many different levels ofluxury, lifestyle, budget, and
each one of them you know hasdifferent developments,
different facets that are thingsthat are changing.
(24:33):
And so I think it's important tohave a team.
I mean in in our business today,we have mentally I think I have
three um or four buckets in ourbusiness.
So we have a very successfulbusiness which has which is
select service hotels, uhHoliday and Express being the
(24:56):
biggest one with the biggestfranchisee in Europe for that.
Um then we have something callediconic luxury hotels, which is a
jewel which is lots of reallyindividual boutique hotels,
usually, usually on average ofsort of 50 to 100 keys.
Um in iconic physical buildingsin great locations.
(25:20):
Again, that has its ownmanagement team.
We have an asset management teamthat then covers our what I call
big box hotels.
So the big Hilton's, Fairmonts,Marriott's in big cities.
Uh, and then we have a team thatmanages resort hotels for us
predominantly in Europe.
And within each of those, thereare things, different things
(25:42):
happening in in luxury hotels.
You know, how do you you have toconstantly be redefining what's
luxury?
And luxury isn't just having theright um amenities in the room,
it's what do people want?
What does people now have accessto so many different things at
(26:04):
home through their iPad, throughshopping online, doing what is
so?
How do you cr give them adifferent experience?
What is the guest experiencethat they're looking for?
Something that they can't getevery day.
And it could be wellness, itcould be sport, it could be
talks.
(26:25):
I I mean I don't know, but Ithink you have to be, you have
to have a team that's dedicatedlooking at all these things all
the time.
Otherwise, your competitorswill.
And by the way, there's nothingwrong with watching what your
competitors are doing in otherparts of the world and importing
it.
Uh, it's just doing it well.
So, in in a budget hotel, forexample, what does that mean?
(26:47):
Well, to me, that means peoplewant great Wi-Fi, they want a
good shower, decent airconditioning, and a comfortable
bed.
The rest of it's probablyirrelevant.
So, how do you make a differencethere?
Well, we make a difference bymaking sure that we do all of
that right, and then we makesure that we do it on an
(27:09):
efficient basis.
So there'll be more AI, there'llbe more automation, there'll be
um more technology.
So, for example, I don't, youknow, as I said, you've got a
comfortable bed with decentlinen and good Wi-Fi and a
shower.
That's you've ticked thoseboxes, but that's not really the
thing.
(27:29):
For me, the next thing there isseamless check-ins.
So you'll you'll download yourapp, right?
As you walk in the door, it'llgeolocate where you are.
It'll say, Welcome to theHoliday and Express in Bista.
Um, your room is number 535.
(27:49):
You'll go, you'll walk up toyour room with your phone and
the door will open.
You don't need to check in.
I don't understand.
It's the most awful process.
And especially when it's on aMonday morning and you're
arriving in your hotel and it'sthree deep at the check-in, and
my heart sinks.
I've got to wait while someonehas this protracted
(28:11):
conversation, trying to scam anupgrade, and it drives me up the
wall.
And they sit there for 10minutes negotiating.
I said, Well, I was in this roomlast time and this and that.
I don't want to speak to anyoneif I've got off a long flight.
I just want to go to my room.
I don't want to wait for my bag.
I don't want to talk to anybody.
(28:32):
I just want to know that I'vegot the best room possible, that
I've got that I'm recognized,and that can all be done
seamlessly, but it's not.
Hotel companies have been reallypoor at that.
SPEAKER_00 (28:44):
You know, this is very interesting.
We in in the in hotel business,we say we are a very
interaction-intensive.
We want to provide human beingsand and you know, uh welcome.
Yeah.
But what at the end of the day,if the guest is not wanted, he
or she just wants to go to theirroom, then giving good service
(29:04):
means not giving them anyservice.
SPEAKER_01 (29:07):
In a budget hotel, it might mean just walking
straight in.
But in a luxury hotel, that isthat you walk through the door
and a guest service person has alittle iPad and it pings up.
Ah, the dean.
Dean Upnage has come.
Okay.
And it says who you are, andit's got a picture of you.
Welcome to the hotel, Dean.
(29:29):
Welcome.
Let me take you to your room.
I already know who you are.
I already know what yourpreferences are.
I'm going to walk you to theroom.
So you've got guest recognition,you've got that, but it's
seamless.
You haven't had to stand in aline and talk to someone who may
or may not know, he may not havethat information.
That's all possible to do today.
(29:50):
We're not talking about rocketscience.
We're not talking aboutgeneration 5.0 in open AI.
You know, this is really simplestuff, but we do it badly.
Including in my hotels, by theway.
SPEAKER_00 (30:04):
I was about to say I'm looking forward to the day
when I go into one of yourhotels and someone says, Dean
Upneja, welcome.
It should happen.
It should happen.
SPEAKER_01 (30:13):
It does, it does happen in some of our hotels.
And it happens when we've gotnumber plate recognition on the
cars, or if there's a driver,and the driver is actually being
trained to send a text messagefrom the car when he's two
minutes out.
I'm with Dean Upnager arrivingin two minutes.
(30:34):
And so you'll pull up in the carand someone will meet you.
It does work on occasion, butjust not enough.
SPEAKER_00 (30:41):
Yeah.
When I go into Home Depot and Iopen up their app, it instantly
geolocates and knows that I aminside a home, and it will
immediately start giving me,okay, go to this aisle.
SPEAKER_01 (30:53):
It can actually direct you to the aisle and it
can flick up promotions.
It's it's simple.
But why don't we do it?
Don't know.
Go and ask Hilton or Mario.
SPEAKER_00 (31:04):
Okay, so uh building at this scale takes resilience,
patience, and a willingness totake calculated risks.
So let's talk about thechallenges and mindset it takes
to stay the course.
Is spotting hidden potential?
So you see a distressed assetand you imagine what it would
be.
Uh, is it about data, is itabout intuition, or just you
(31:27):
build up this experience overtime?
SPEAKER_01 (31:30):
I think it's largely experience.
Um, but it's also being aware ofwhat is the latest offering and
figuring out whether you canactually operate it yourself or
you want to use a brand.
It's to some extent intuition asto whether you feel that you can
(31:52):
operate it yourself.
And then you've got to, ofcourse, go into the detail.
Can you actually fill thishotel?
And if you fill it on your ownwithout using a brand, will you
get enough rate?
Um, so it's got to be back whenyou're making these decisions,
Yunny, you're talking aboutquite a lot of money, and gut
feeling isn't enough.
You need the data to back it up.
(32:13):
And in some cases, we mostly weget it right, but sometimes we
don't.
Sometimes we extrapolate theperformance in the past and
think that's a guarantee ofwhere it's going to be in the
future, and it just doesn'thappen for a bunch of reasons.
Maybe our analysis wasn't goodenough.
Uh, maybe the market changed,maybe we weren't aware of a load
(32:37):
of new competition that wascoming in, and it's happened to
me recently on something.
SPEAKER_00 (32:41):
So this is the last question, which is um you've
built through multiple economiccycles, um, always with a
long-term view, and we've seenthat over and over again in your
perspective.
When you look ahead, whatexcites you most about the
future of hospitality realestate?
What do you think will inspirethe next generation of leaders
(33:02):
to build places that trulypeople want to go and stay in?
SPEAKER_01 (33:06):
One of the great things about hospitality is that
whatever happens with AI, thereare you're still going to need
hospitality.
And I think that there will be aneed for increasing amounts of
hospitality as people have morespare time.
Either there'll be less jobs orpeople will work less hours
(33:30):
because of AI.
And it's here to stay, it's notgoing away.
There's going to be a massivereordering inside businesses,
and it, you know, it it could belegal, accounting, medicine, it
could be every business, everyprofession will be impacted by
AI.
And none of them, in my opinion,will be taking on more people
(33:52):
because of AI.
They'll be managing with lesspeople, and therefore that means
more leisure time.
And so leisure is the rightplace to be, but hospitality uh
is a great place to be.
I think people want experientialtravel, and experiential travel
(34:13):
might be um it might be cruises,it might be fitness and wellness
and health.
I don't know what exactly thetrends are going to be, but I
think that it's got a very,very, I think there's a very
clear need for hospitality.
Um I think that it will morphover time into different areas
(34:38):
that we don't yet know, but forsure, as a long-term investment
thesis, it's the right, it's aright place to be.
Um And I think that, you know,if you've got the if you've got
assets in the right locationwith good bones, you can
constantly reinvent them asyears go by.
(35:01):
But you've got to have the rightasset in the right place.
SPEAKER_00 (35:05):
Fantastic.
Um before we let you go, a quicklightning round, short
questions.
First thing, first word, firstphrase that comes to your mind.
So let's start.
Um, London or Monaco?
Better espresso.
SPEAKER_01 (35:20):
Monaco.
SPEAKER_00 (35:21):
What's your favorite leisure time activity,
completely apart from work?
SPEAKER_01 (35:26):
Driving fast cars.
SPEAKER_00 (35:28):
Oh, okay.
Thought you were gonna sayrunning.
And that.
And that as well.
SPEAKER_01 (35:33):
If I had time, I would do more cars, but I don't.
So running is easier, it'squicker.
SPEAKER_00 (35:37):
Okay.
If your investment philosophyhad a theme song, what would it
be?
I know this is a hard one.
I'll come back to that.
Let me come back to that one.
One word your team would use todescribe your leadership style.
Engaged.
Okay, very good.
(35:57):
Your recommendation for a book,a podcast, or source material
for inspirational, informed, andinnovative thought leadership on
the business of real estate canbe a current or a source that
has withstood the test of time.
SPEAKER_01 (36:12):
I read an interesting book recently.
Um, not necessarily the best,but the most interesting book
I'd read recently was the thehistory of Conde Nast.
What went right and what wentwrong.
And actually, where they I thinkfailed at the end to understand
digital transformation.
unknown (36:33):
Okay.
SPEAKER_01 (36:33):
So they had a great business model.
They were world leaders, theywere market leaders, they had
the best brands, but somehowthey failed to understand the
changes that were going on.
SPEAKER_00 (36:46):
Ian, uh, thank you so much.
That was a masterclass incapital strategy,
entrepreneurial courage, andglobal chess moves that you've
been making.
Thank you for candor and thankyou for coming to our school.
SPEAKER_01 (37:00):
It's a pleasure, and thank you for having me.
SPEAKER_00 (37:03):
So, to our listeners, if you're going to
play big, play smart and beready to bounce when the tide
turns.
Special thanks to the team thatproduced this.
I think it's important.
Producer Mara Littman, RachelHamlin, Land Hugh, Isabella
Lakin, and Alex Dietz.
The entire team at BostonUniversity School of
Hospitality.
(37:24):
To keep up with theDistinguished Podcast, be sure
to subscribe wherever you listento your favorite podcast.
You can also learn more aboutexperience innovation in our
undergrad and graduate programsby visiting pu.edu slash
hospitality.
Have a wonderful day.
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