Big Questions about Hotels (Spring 2025 Edition)

Questions like:

What's the secret number hotel people really care about?

Is the hotel market oversaturated in the U.S.?

Are there any markets that really are oversaturated though?

What's an underserved luxury market?

Who are the hotel winners in 2025? Who's making lemonade?

And is the hotel concierge truly dead?

Episode Transcript

Speaker 1 (00:06):
what do you want to call today?

Speaker 2 (00:07):
you want to call it grab bag but I thought I already
gave you a title I don't knowif we can use that title, I
think, for seo purposes.

Speaker 1 (00:15):
I try to keep expletives out of the actual
title, but I like the enthusiasm, I like the energy, as always.
I'll title it something cleverafter, but this is essentially
you and I talking about thestuff we always talk about.
Yeah, and typically when themics aren't on, where I roll
into some bar that you'resitting at and say, jeff, why

(00:37):
does the sun rise the way thatit rises?
Why does the wind blow the waythat it does?

Speaker 2 (00:41):
And I say beautiful things, like Matt the sun rises
wherever you are, that's true,that's sweet.

Speaker 1 (00:51):
Look at all this love Spring's here.
We apply them to the rigors andthe ins and outs of the hotel
industry, because you have donethis for a long time, you know a
lot about it.
It's like you're my Google forall things hotel.
You're like just this livingsupercomputer.
So I'm going to take advantageof that supercomputer today and

(01:13):
ask you some questions that havekind of vexed me over the last
year as we've been doing thispodcast.
Let's just see what happens,shall we?
Hi everybody, it's no Show.
I'm Matt Brown, joined asalways by Jeff Borman.
Jeff, I'll get the ball rolling.
Question number one we talk alot about numbers on this show

(01:35):
and I need to do a better jobwhen we interview guests,
because a lot of times we'llhave hardcore hotel people, as I
call them the hotel folk, andwhen they come in they just swim
in statistics and numbers thatthe hotel industry knows very
well but that a lot of peopleoutside of the industry, even if
they're in travel, a lot ofpeople might not be so familiar
with and they get flung aroundso quickly that it's like whoa,

(01:58):
what's he talking about again?
So I want to talk about aspecific number here, a secret
number.
I want to know what the secretnumber or stat is that hotel
people really care about, eitheron the executive level or on
the hotel ownership level, or ifyou're working the front desk,

(02:18):
that what's the number that youkind of always have your eye on
with the hotel Hotel peoplerequires a little definition.

Speaker 2 (02:25):
I think Owners of hotels care about cash returns.
The profit that's left overafter all the expenses gets
reinvested in the properties orit adds to the asset values or
it gets returned to shareholdersas dividends.
Any of those things drive thevalue of the REIT or whatever

(02:46):
form investment form it's in.
But so I think the owner it'sjust pure cash.
But if you're asking theoperator or, let's say, the
brand, right, brands care aboutNUG, net unit growth.
There's one for you that weshould probably speak more than
say NUG.
And what is NUG?
Just adding hotels.

(03:07):
Last year you had 100 hotels.
This year you have 105.
Your NUG is five hotels andthat's the way brands grow,
right?
I think.
If you remember back to when wehad Zach on in January of this
year, we really talked a lotabout the business model.
January of this year we reallytalked a lot about the business

(03:28):
model for the biggest brands inhotels is not to grow through
Revpar.
Revenue per available roomthat's kind of the standard
bearer metric for the health ofthe hotel.
But the brands really don'tgrow much on Revpar.
The owner might grow on Revpar,but the brand really grows by
planting a new flag.
Do you have 10 Marriott hotelsin Pittsburgh now?

(03:49):
Do you have 13 of them at theend of the year?
That's really meaningful growthfor the brand.
Now, underneath NUG, drivingfactors and forces, metrics
guest satisfaction.
You can't grow more hotels andfill them if guest satisfaction
is not high.
Right, they're not coming backto Marriott or Hilton or Hyatt

(04:10):
or your loyalty program growth.
Those numbers are cited aboutas much as Revpar anymore, it
seems.
Well, that's because as youexpand your units from in the
Pittsburgh example 10 to 13hotels, your units from in the
Pittsburgh example 10 to 13hotels you better have a huge
and growing loyalty program tokeep them all full.
But I think it comes back to nugif you're a brand, cash, if

(04:32):
you're an owner but you gave theexample too, of a property
manager and that's probably thetoughest situation to say
there's a magic number, becausethey are caught between those
two.
They need to deliver all thethings that the brand cares
about and all the things thatowners care about.
It's where the rubber meets theroad and I think actually, matt
, there's probably in the earlydays of COVID, when we could all

(04:56):
align on one metric, all sidescould align on a number that was
30 or 40 percent occupancynumber.
That was 30 or 40% occupancybecause below that mark and it
depended a bit on the class ofhotel, but below 30 to 40
occupancy the hotel could not beprofitable and was better off
to be closed.
So that kills all parts of thefood chain?

Speaker 1 (05:17):
Do the hotel brands?
Do they like NUG?
Let's just kind of reduce thisdown.
They like Nug because, Athere's a franchise fee that's
paid to them and B I wouldimagine, if these are publicly
traded companies, that yourstock valuation goes up.

Speaker 2 (05:34):
Both those are true.
So if let's just say you knowyou have one hotel and it makes
$100, you can put, as a brandmanager, immense effort into
growing the top line, therevenue of that hotel.
Let's say the natural growth inthat market is 3%, You're going
to grow from $100 to $103 thisyear.

(05:55):
If you put incredible effortagainst the commercial acumen
and success, maybe you growinstead of 3%.
You grow 4%.
That's a 25% outperformance ofthe marketplace.
That's an incredible degree ofoutperformance.
But if you're the brand, thenyou're looking at this and you
think, okay, so Revpar went from$103 to $104.

(06:18):
It took all that effort to getanother buck out of that,
Whereas instead I could put myeffort into opening a
neighboring hotel where I getcredit for the next $100.
And then you take the fees onthat.
So if the fees were 10%, well,out of the $100, you made 10
bucks.
You take Revpar to 104, you'remaking 10% of that number.

(06:42):
But you open a neighboringhotel at $100 and all of a
sudden you have doubled yourfranchise fees coming into
yourself.

Speaker 1 (06:49):
What's that tension like between the operator of the
hotel and the brand?
Because I feel like it can bepalpable, but it's never spoken
out loud.
If you are one of 10 hotels inthe Pittsburgh area owned by a
particular brand and I'm surethere are sub-brands there too,
so it's not like you've got like10 Renaissance hotels all in

(07:11):
the same area, but you've gotthe same kind of overarching big
brand that owns all thesesub-brands and they're all
planted down in one urban area.
They never talk about itpublicly because they don't want
to burn bridges, but doesn'tthat always frustrate hotel
owners when a brand decideswe're going to go for NUG, we're
going to go for another flag toplant in the ground and we're

(07:33):
going to do it two miles awayfrom your hotel?

Speaker 2 (07:36):
Yeah, 100%, 100%, yeah, were up to owners.
So I mean a lot of owners.
Most agreements that an ownerhas with a brand has a
territorial jurisdiction to itthat prevents a brand from
putting, to your point, 10Renaissance's in a city.
It'll have some territorialclause that protects the owner

(08:02):
from there being anotherRenaissancenaissance too close
by.
But there are a million waysaround it, right?
Instead of putting arenaissance, you're just going
to put an autograph collectionhotel Soft brand can't stop that
, right.
Years ago, developers used tojoke that when there was a

(08:23):
courtyard every five blocks andMarriott ran out of room to put
more courtyards, there was goingto be a hotel between those two
courtyards, and Marriottrightly wants to have it under a
flag of its.
And so they went out and boughtAC and that allowed them to put
a hotel without compromisingthe territorial requirements
that the owners of those twocourtyards that were existing

(08:44):
already had.
So yeah, it's a cat and mousegame for sure.

Speaker 1 (08:48):
But you, if you're a hotel owner, you don't have a
lot.
I mean, are there ever anyclosed door meetings where you
kind of give it to the brandLike, hey man, I've been trying
to be a custodian of this brandand you're, you're really,
you're really screwing me byopening a whatever, some kind of
comparable thing four blocksdown the street?

Speaker 2 (09:06):
It's difficult to show material impact.
It is very possible, but it canbe difficult.
So you open that hotel twodoors away or two blocks, or
whatever your market conditionmight be.
Sometimes a mile is very close.
If you're in Manhattan a mileis irrelevant.
But whatever it is, you have toprove as an owner that your
business has been harmed andfrom there it gets really into

(09:29):
the deep with lawyers figuringout how to right the damages
that have been done.
You can mitigate fees A lot oftimes.
That's what the resolutionwould be.
If brand and owner agree thaton an annual basis this is going
to do $500,000 damage to theexisting hotel, they may agree

(09:51):
then that the management fee atthat existing hotel could be
dropped from and I'm making upnumbers 10% to 7%.
You know an offsetting amount.
But those things are usuallynegotiated in dark rooms with
lawyers.
In the end, the commercialpeople who are out there trying
to make the best out of everyproperty you kind of just suck

(10:14):
it up deal with it move on Tothat point.

Speaker 1 (10:16):
here's question number two for the JeffBot1000.
Is the hotel marketoversaturated in the US?
Do we have too many hotels?

Speaker 2 (10:27):
I think we got to go back to the first perspective,
right?
If you're saying from anowner's perspective, of course
there are.
We never want more hotels.
The existing supply is too much.
In fact we should have areduction in supply.
And if you're talking to thebrands, absolutely not.
There is plenty of room forgrowth.
Travel is gigantic and there'snot enough hotels anywhere, ever
.
So the perspective iseverything.

(10:49):
Maybe what you're really askingis in certain markets.
I think we can get probably aless evasive answer if we think
of certain places, if we, if wethink of certain places,
everyone, I think, would agreethat San Francisco has too many
room nights right now.
There are too many rooms, Ishould say, in inventory.

(11:11):
There's just not enough demandinto that city at this time to
support it.
We've seen since 22, several ofthe largest hotels in San
Francisco completely close,close forever, goodbye.
Maybe they'll become condos,maybe they'll open up again as a

(11:31):
hotel on another 10 years witha different owner and investor
strategy when the market returns.
But I think San Francisco hoststhe Super Bowl next year and
that'll be about the first eventwhere they'll actually wish
they had those rooms back.
But you're talking a four-dayevent over the course of a
decade.
So I think San Francisco youcan come up with some other
examples the Rust Belt ingeneral is growing too slowly to

(11:54):
absorb supply.
Existing businesses would bebetter off with a supply
reduction.
We're talking my homelandCincinnati, Cleveland, buffalo,
indianapolis.
These places don't need more,they need less.
Minneapolis not really RustBelt, but it never recovered
from the George Floyd situation.
It's kind of crazy.

(12:15):
Portland, oregon you and I hada great conversation last fall
about this and despite being anoutstanding city, it's still off
the radar for too manytravelers.
They remember it as a place ofhomelessness, drug abuse, poor
governance and even if there'ssome truth in that stuff,
portland's an awesome place.
So I mean of those markets, Ithink, yeah, there's a real

(12:37):
oversaturatedness to it.
Right now I'm probably mostoptimistic about Portland's
return.
The same formula that made itgreat years ago, I think, still
exists.
It's just going to have to getout of people's recent memories
that it was a trouble spot.

Speaker 1 (12:51):
You live in Dallas right now.
You lived in DC, the DC area,for years.
But you live in Dallas rightnow and it seems like every time
I'm in Dallas, essentiallyevery other building is a hotel.
It's like maybe that's becauseyou know I'm there for
conferences and you know kind offlying in and out of dfw, it's
just that's all kind of hotelland right there.

(13:11):
But is dallas?
Is dallas oversaturated?

Speaker 2 (13:15):
um, if it feels that way, now just wait.
Because it's the largestpipeline in all the us.
More hotels are being built inDallas than anywhere else.
Why is that Wildly successfuleconomic city?

(13:35):
Honestly, a lot of businessesare moving to Texas.
This number is a few yearsoutdated, but I think 250,000
people were moving from thecoast to Texas earlier this
decade annually.
Businesses are moving herebecause it's a low tax
environment.
It's very affordable.
Your part-time home in Atlantais very similar in that it is

(13:57):
never-ending suburban sprawl,which personally troubles me
quite a bit, but in New YorkCity your home now, there's not
one square inch of undevelopedland.
If you can get a hold of it,you can make something out of it
.
In Dallas, though, or inAtlanta, where the downtown is
just really in sad shape rightnow, they don't bother to repair

(14:19):
and fix downtown Atlanta.
You just build something elsein Buckhead, or Midtown is now
all the rage or out in CobbCounty, where they just built
the new Truist Stadium for theBraves.
Downtown Atlanta is reallysuffering for that Dallas, I
think some locals who are veryproud of their city would say
that's happening, but assomebody who gets to see most of

(14:39):
the top 25 cities in the US onan annual basis.
Dallas's downtown is not nearlydegrading to that degree.
It's a thriving place, but youalso still have almost endless
expansion across the Plains.
Yeah, dallas has the biggestpipeline in the business in the
US and it's continuing to grow.

(15:01):
Not only is it the biggest,it's growing at the fastest pace
too in its pipeline.
It's kind of crazy.

Speaker 1 (15:08):
Let's switch gears here.
Let's talk about Hawaii.
We don't talk about Hawaii thatmuch and that should change.
It relies so heavily on Asianinbound travel and has forever I
feel like everybody who goesthere is Pacific Rim.
You're either taking a weekendtrip from California somewhere
or you are coming from Asia andyou want kind of an American

(15:32):
holiday, but you want somethingthat's a little more accessible
and a little bit closer.
How is Hawaii doing in thiskind of post-COVID Trump 2.0
landscape?

Speaker 2 (15:46):
Hawaii is kind of a frustrating place, I think,
because it continues to doself-harm.
It's got enough things goingagainst it without hurting
itself in the process too.
You mentioned it relies veryheavily on Asian inbound travel,
really more specificallyJapanese.
A lot of Korean, but mostlyJapanese and Japanese travel to
the island is still down 50% topre-COVID.

(16:08):
The yen being at its lowestvalue of the dollar since the
80s makes it extremely expensiveto what used to be its biggest
inbound market expensive to whatused to be its biggest inbound
market.
Of course we don't want to gotoo deep into the saber rattling
that's going on by our countryright now, but we're not making
people feel particularly welcomeeither.

(16:29):
So it's the only state that hasthat kind of reliance on a
foreign inbound market and it'sreally feeling it.
And where Hawaii has done a poorjob, in my opinion, is that it
was also the American posterchild for over-tourism.
Right, we don't want youtourists.
And well, that's a really badidea for a state that relies its

(16:51):
entire economy on tourism.
That's really dangerousposition to take.
And now Hawaii is going toplace a 10% tourism tax across
the state.
So I think it's a wildly badtime for that to happen.
It's already extremelyexpensive.
It always has been expensive toget to anyway.
So they're going to add to thatexpense and I really just don't

(17:13):
see this going well, I think,if you kind of want to give them
one more hard blow.
Hawaii, segmentation wise, doesnot do a lot of business travel
, but it does have aconsiderable amount of
government travel and givenwhat's going on with Doge and
cuts and cuts and cuts and cuts,government is extremely down
right now and also wildlyunpredictable.

(17:35):
So I think Hawaii is in a toughspot right now and will be for
a while if it continues to chaseaway the hand that feeds it.

Speaker 1 (17:43):
Let's see what else I have in my question bag here.
Okay, so we talked aboutoversaturation.
What is an underserved luxurymarket?
What's a place that's ripe formore luxury hotels to come in
and make some money?

Speaker 2 (17:59):
Not the Caribbean?
Why is that?
There's way too much superexpensive luxury hotel supply.
It was too much before and it'sbeing piled on to.
Every new opening comes at thecost of a finite amount of
demand.
Essentially, generally speaking,I don't like at least as a
long-term investor relying onairlift.

(18:22):
Like Hawaii, you can't drivethere If airlift is too
expensive into a US continentalcity.
They can rely more on a drivemarket, on a domestic market.
Caribbean doesn't really havethat.
The other part of the Caribbeanis at least in the luxury
segment.
It's expanding so quicklyexactly in that high-end segment

(18:45):
.
Right?
You're not seeing a lot ofextended stay hotels and
business hotels or conventionhotels.
So all the supply that goesinto the Caribbean is beachfront
resort and it just dilutes thehotels that exist because every
newer hotel is cooler andshinier and has more bells and
whistles than the one before it.

(19:05):
So, generally speaking, I wouldlove to see it's impossible, of
course, but a moratorium onluxury building in the Caribbean
Key West and, by the way, thisis one last thing on Caribbean
those are also in many cases,economies that rely on tourism
very heavily.
The Dominican 75% of GDP isfrom tourism.

(19:28):
Aruba and St Kitts and St Luciaright, not many of those places
have other thriving industries.
So the more we expand thesupply of hotels and the more it
dilutes the earnings per key,the worse off those hotels will
perform and the worse off thewhole market will perform.

Speaker 1 (19:47):
And does the Caribbean have mid-market
anymore, or is Airbnb kind oftaking a slice of that pie?
I mean, can you go and stay ina?
I wonder if people who don'twant luxury Can you go and stay
in a?
I wonder if people who don'twant luxury but they still want

(20:08):
a Caribbean vacation.
Do those people just go toFlorida or they just go
somewhere else?
I wonder if the region has kindof in a strange way, sort of
priced out its middle.

Speaker 2 (20:13):
Yeah, the Airbnb thing is a major problem, A
market that I know well, StThomas, since over the last 10
years St Thomas has added 5,000Airbnb listings 5,000.
In relation to hotel rooms,that's a tripling of the hotel

(20:36):
supply.
If it were equivalent, theisland can't hold that.
It doesn't have the labor forceand so it dilutes everything
around.
It dilutes the hotel earnings.
It dilutes the earnings for thelocal who wants to work, as
people don't stay in hotelswhere they can gain employment.
Instead they're staying inAirbnbs where there's far less.

(20:56):
Last thing to that, even thoughwe're not really talking about
housing markets, when 5,000homeowners turn their places
into temporary hotels throughAirbnb or similar sites, it
raises the price massively ofhomeownership or rent on the
people who are on the islandtrying to serve these travelers.

(21:17):
So in an island like St Thomasit's almost impossible to get
labor to the market because youcan't afford to paya bellman
$100,000 a year.
But that's what it costs tolive on St Thomas now that every
former resident owner ispimping out their place on
Airbnb.

Speaker 1 (21:33):
It does seem like if you're going to make an argument
for Airbnb in a place, it issomething like a St Thomas or St
John's, because he isespecially for mid market,
because there's a decent chance.
If you're going, you're goingwith family, it's the family
vacation for a week and we wanta kitchen and we want three
bedrooms and we maybe want apool and and not so that you

(21:55):
can't get those things sometimesin a hotel.
But I don't see a ton ofextended stay options down there
, probably because there's justno space for those.
So the house rental thing Iguess makes sense there from a
housing option.

Speaker 2 (22:08):
I know it doesn't, I know the hotel industry probably
doesn't like it, but Well,actually nobody likes it, except
the 5000 people who are rentingtheir houses out and getting
some cash for it.
The labor force doesn't like iteither.
The restaurateurs don't want itbecause they now these people
have their own kitchens.
The infrastructure that theIsland was built on over the
last 75 years depends on peopleflying in, staying in a hotel

(22:32):
and eating and drinking at localestablishments, when they can
just fly to your cousin Matt'shouse.
Instead of.
That's a seat on the plane thatdoes not turn into anything.
That generates revenue for thepeople who work there.

Speaker 1 (22:46):
Yeah, like, exactly like a concierge.
So the concierge liveseverybody.
What do we want to go to next?
Let me see.
Let me see.
Ok, let's all right, let's goback to hotel people I talk
about like they're hobbits, orhotel people we are there's,
they're well-dressed hobbits, Imean the actual hobbits are

(23:06):
pretty well dressed in fairness,we're talking a lot about it.
does the do hotel people?
Are they gravitating to luxury?
I feel like we just see a lotof stuff about luxury right now,
like more than more than ever,and I wonder if the industry is
kind of gravitating to itbecause they're trying to figure
out their niche, to appeal tothat audience and that, unless

(23:28):
you're luxury or I mean maybebusiness, maybe extended stay I
feel like it's getting the mostheat out of any segment in
hotels.
Is that?

Speaker 2 (23:37):
fair If by heat you mean time in the media.
I totally agree.
I think everybody loves to talkabout luxury.

Speaker 1 (23:46):
Yeah.

Speaker 2 (23:47):
It is sexy.

Speaker 1 (23:49):
Yeah, and it helps sell the whole industry, like,
even if you're not going to go,stay in a luxury hotel somewhere
.
If you see an article about aluxury hotel like that's the
White Lotus, right, it's like,oh, sicily, I should go to
Sicily, even if you end upstaying somewhere else.

Speaker 2 (24:04):
Exactly what I'm doing.
In five weeks I'm going toSicily and I'm not staying at
that Four Seasons, and notbecause I didn't want to, but
because it is impossible to book.
You can have the same orsimilar conversation about a
economy hotel.
Most of the metrics will beabout the same, but it's way
more fun to talk about aRitz-Carlton than a Fairfield

(24:27):
Inn.

Speaker 1 (24:28):
You know, with all of this kind of economic turmoil
right now, I mean we haven'tseen as much turmoil.
It's the threat of turmoil Ithink we live under every day.
I wonder if that threat ofturmoil is affecting luxury in
some way, either on theconstruction side or on the
purchasing side.
As a consumer, I wonder ifpeople are pulling back right

(24:50):
now on what they're spending onluxury, or if there's kind of a
wait and see, or if it's kind offull steam ahead.
The numbers look good.

Speaker 2 (24:56):
So there's a price sensitivity across all segments
right now.
So luxury is feeling it alittle bit of a pullback in
pricing.
Where you lose pricing, youlose profit.
I think luxury is going to beredefined over the next 10 years
.
It's happening now, but ittakes a while for this to really
change enough consumer minds.

(25:19):
The current crop of luxurybrands are not just saturated
but they're commoditized.
The current crop of luxurybrands are not just saturated
but they're commoditized, whichis far worse.
It used to mean something to sayI'm staying at the insert big
global brand.
It means less.
Now People are less.

(25:41):
You know, millennials and Gen Zare more likely to talk about
their stay with great passion atUrban Cowboy because it's so
different, they can't wait totalk about it and it's unique
and different and Instagrammable.
It's also harder to do.
Oh, what is that?
Where are those?
Can I go find one?
Oh, it's one of a kind.
No, there are six of them.

(26:02):
If that's right, we should haveLion on Sunday.
But if you want to stay at aRitz-Carlton it used to be the
reserve of the elite and, quitehonestly, now anybody can do it.
So I think luxury is going tochange into luxury and ultra
luxury and again that'shappening.
The days of considering a 500room hotel, regardless of brand,

(26:25):
considering it to be luxury.
I think that's gone right.
Even in las vegas, where you'vegot some of the finest hotels
in the world, I don't believeyou can have a 3 000 room luxury
hotel you like.
My definition of luxury cannotbe met with 3 000 guest rooms
and what's required to servicethem, so there's very little

(26:46):
exclusivity in the luxury tier.
Now.
We saw numbers last year like1,000 hotels run over $1,000 ADR
or something crazy.
That's no longer the definitionof luxury.
We got to get to the hotelsthat are $5,000 a night.
No, let's talk about those.
That's luxury probably.

Speaker 1 (27:04):
Speaking of Vegas, as always, we have to bring up
Vegas every other episode it'sin our bylaws and also
exclusivity.
I've been thinking a lot aboutthis over the last week because
there was a story in the LasVegas Review-Journal about
concierge desks closing at somemajor properties in Vegas, and

(27:24):
there were a lot of pseudo thinkpieces that came after it, like
is the concierge truly dead?
And I think the reality isprobably more complicated than
that.
I have a thought about it, butI want to ask you is the hotel
concierge gone?

Speaker 2 (27:42):
No way.
No, it's evolving, but when Istarted my career journey in the
90s, the internet was supposedto replace every concierge.
That clearly hasn't happened,but it has taken away a lot of
travel desks, right, these youused to see in some hotels where
it's just someone with a bunchof brochures, not really an
elevated concierge at a luxuryhotel, someone with a bunch of

(28:05):
brochures, not really anelevated concierge at a luxury
hotel, but the travel desk.
That could be replaced bywhat's now a mobile phone.

Speaker 1 (28:10):
A lot of that stuff's gone, right.
Right, the concierge desk Ifeel like devolved maybe isn't
the right word, but it over thedecades, morphed into
essentially an information deskand you'd maybe go to maybe they
do cab stand there too and it'slike can you, uh, can you tell
us which direction thisrestaurant's in?

(28:31):
It wasn't this kind of aromantic idea of what a
concierge is, where you go downthere and it's like, hey, I need
tickets to this impossible showand I'm a guest at your hotel
and can you get them for me?
It's like, yes, sir, and that Idon't.
I don't know if that everexisted for everybody, but it, I
think hotels kind of looked atwhat that desk was doing and

(28:52):
then they also noticed that itwas splitting that kind of labor
up around all the people whowork in the hotel lobby.
You know the people behind thefront desk can just as easily
kind of handle those questionsas like a dedicated concierge
desk and probably do it morereliably, but it does.
I mean, the high end conciergeis probably still there for VIPs

(29:14):
.
I don't know who counts as aVIP anymore, but I'm sure when
you're staying at a majorproperty let's stay on the Vegas
example let's say you'restaying at the Fontainebleau or
you know, like the Conrad andresorts world, I'm sure if
you're some kind of roller, highroller, there's a number they
give you and it's not just anapp.

(29:35):
Maybe the app is part of it,maybe it's like a luxury kind of
app too that maybe gets youspecial things.
But there's has to be like aperson, still a personal
concierge you call him, and thatperson gets stuff for you,
makes things happen, right, oris that fantasy?

Speaker 2 (29:50):
I think that's totally right, the experiences
are growing in importance.
Now you could say that's thereason people traveled leisure
travel anyway.
Right, and let's actually let'stake it this way by segment
group travelers.
If you're a conventioneer,you're probably not using the
concierge very heavily, right?
You're going to your meetings,you're going to the dinners that

(30:12):
are pre-planned, you kind ofknow what your ins and outs are.
If you're a business traveler,largely very similar, right.
What time is my meeting andwhat room is it in?
The experiences are what driveleisure travel and that is
becoming increasingly important.
And you see this, whether it'sthrough M&A, a billion dollars

(30:35):
transacted earlier this year onjust experiences tech platform
right, so the investment side oftravel is going very heavily
into experiences, which is right.
In your concierge area.
I think the question isn't, atleast to me, whether or not that
is at the forefront or whetherit's augmented by the human, and
I think the human in the luxuryexperience is still going to be

(30:59):
the critical go-between.
I can make a reservation onopen table, but to know what to
order, what's not to miss there,I want that experience with the
concierge who says try this,it's off menu, or ask for this
person.
He's the Psalm and he will letyou know which cab he has in the

(31:21):
back that's not on the menu andtell him I sent you.
There's no AI function that'sgoing to deliver that, but the
concierge, who can create betterexperiences, is going to win
out in every scenario.
I think this is kind of like wetalked to someone about travel
agencies being one of the topthree jobs most likely to be

(31:44):
replaced by AI.
Travel agent or advisor OTAswere supposed to do that too.
They did not.
But what they did is they tooka lot of volume out of the
travel agency world, but thevolume they took was that purely
transactional stuff.
Make the reservation.
What they evolved into astravel advisors was depth of

(32:06):
local knowledge.
It would take you months toresearch and have the kind of
knowledge that my specialist atAudley for Sicily has gained
through 10 years of traveling toSicily and doing thousands of
trips for other people.
I can't get that any other waythan to talk to the human expert

(32:26):
.

Speaker 1 (32:30):
You handle hotel data every day, all day.
When I think of you, I thinkyou're like Neo in the Matrix
You're just constantly seeingthe world as streams of data
coming at you.

Speaker 2 (32:41):
I was once for Halloween.
Halloween Keanu Reeves.
Not surprised, you still are,but I went as the.
What was the series he didafter he lost his wife and dog.

Speaker 1 (32:55):
Oh, John Wick.

Speaker 2 (32:56):
Yes, but I went as the John Wick character.

Speaker 1 (32:59):
I thought you were going to tell me you did some
kind of mashup where it's like Iwent as Keanu and I changed
outfits throughout the eveningto be different Keanu Reeves,
which I think is a great idea.

Speaker 2 (33:11):
It's so easy to do John Wick, though it is Dressed
in black.

Speaker 1 (33:15):
His outfits over the years are very trench coat heavy
.
Once you get past Bill and Tedera, they're very trench coat
heavy, though I think it wouldbe fun to like throw speed in
there.
That's a lot of work, though,to do five keanu reeves over the
over the course of an evening.
Maybe the the strategy there isto maybe get a group and locate
everybody here, pick whichkeanu reeves they want to be

(33:36):
from the movie, and then you allshow up at a party as keanu
reeves.
Anywho, this is what.
This is what you and I reallytalk about when we're not doing
this podcast.
So you're looking at data.
Who are the hotel winners in2025?
Is anybody a winner in 2025?
Is anybody making lemonade outof this storm of lemons?

Speaker 2 (34:07):
I think for the most part, everybody across the
industry is just trying tomitigate volatility.
The winners are the ones thatwin a battle of attrition and
lose the least from what theyexpected the year to give.
I'm unaware of any segment thathas said life got better after
Q1, not a single kind of hotel.

Speaker 1 (34:26):
And I wonder how accepting bosses are of all this
talk Like what's that?
What are those conversationslike when you're sitting in
there with, you know, the CEO ofa holding company that owns 20
hotels or 30 hotels or a singlehotel, and you know it's the
quarterly meeting, everybody'sgoing to come in.
I wonder what I?
I'm.
My thoughts and prayers arewith the sales teams on that,

(34:49):
because I think it's the kind ofthing that everybody can kind
of nod sagely and academicallywhen they're reading new york
times.
But I'm sure when you'resitting in a sales meeting it,
you know it gets good fellowspretty fast.
Where's my money?
I don't care what the market'sdoing, where's my money?
So I wonder how that's how thatdynamic is playing out in in
these rooms across hotel chains.

Speaker 2 (35:09):
Maybe it's a little too current events, but earnings
calls are going on this weekand last across the industry and
I do think that across thebusiness right now, a lot of
companies, a lot of companies,most, if not all, have dropped
their full year projection and Ithink part of that is that

(35:30):
there's a tolerance for it builtinto the marketplace.
Like our stock already gothammered, let's take down the
expectation for the year,because everybody expects it, so
then we can come in at the endof the year, beat guidance and
maybe have some good wins.
So I think there's someposturing going on, that it may
not be as bad as people areletting on with current batch of

(35:54):
earnings calls.
So I do think that there'smaybe we're creating our own
silver lining, if you will.
But the voluntary volatility isinexcusable and that just I'm
passionate about.
We talked about it with AaronRyan.
There's no reason a businessshouldn't be able to look six
months out and know the rules ofthe game.
That is inexcusable and untilthat stops, I don't think you're

(36:17):
going to see anybody do otherthan what you're doing right now
, which is say this ismind-blowingly stupid.
We need to move forward,knowing what the rules of the
game are.

Speaker 1 (36:26):
Okay.
Is anybody brewing lemonade?
And if, so can I visit them andhave some, you may?

Speaker 2 (36:33):
You're welcome to go to Canada because they love that
.
Their demand is staying at home.
Those hotels are doing justfine without sending their
dollars, their Canadian loonies,over to us.
So yeah, canada is doing well.
Instead of outbound business,it's staying domestic.
There are similarly winters inLatin America.
Mexican travel to the US isdown 7% for the year.

(36:58):
That's benefiting somebodyeither still in Mexico or
somewhere else in the CaribbeanLatin American region,
benefiting somebody either stillin Mexico or somewhere else in
the Caribbean Latin Americanregion.
Latin American region isbenefiting from Canadians who
are flying over the US insteadof stopping here.
Intra-european travel we sawthis from Accor doing quite well
, as Western Europeans havedecided by double digit volumes

(37:19):
not to come to the US thissummer.
Instead they're travelingwithin Europe.
So there are winners.
It's just not here in the US,jeff.

Speaker 1 (37:27):
this is great, let's do this very soon.
We should do this again.
I enjoy this, yeah, yeah, weshould make a thing out of this.
I'll talk to you soon.

Speaker 2 (37:36):
Great talking to you.