June 17, 2025 • 26 mins
From New Delhi to the Yucatan Jungle, from the Indian Ocean to the Caribbean, Rocco Bova has crisscrossed the world, defining what luxury hotels are and can be. The My Humble House founder talks about building a profit-sharing hospitality company, creating change in a change-averse industry, working within nature, finding the right investors, and offbeat destinations in Italy and Mexico.
https://www.instagram.com/rocco.bova/
https://www.linkedin.com/company/my-humble-house/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Hi everybody.
It's no Show starring me, mattBrown and Jeff Borman, from New
Delhi to the Yucatan jungle,from the Indian Ocean to the
Caribbean.
Our guest today, rocco Bova,has crisscrossed the world
defining what luxury hotels areand can be.
The hospitality consultant,passionate hotelier and luxury
(00:28):
tourism specialist, has beenworking in the industry for over
30 years Four Seasons, hilton,st Regis.
He's worked for everybody.
He is the founder of my HumbleHouse, a hospitality management
company which manages and ownsreal estate to build truly
sustainable hospitalitybusinesses, mainly focusing on
hotels, residences and glampings.
It is a profit-sharinghospitality company putting
(00:50):
people first.
Rocco once said that a traveleris someone who discovers,
learns and lives the visitedplace down to its roots.
Only then have you experiencedthe place.
We couldn't agree more.
Welcome, rocco, to no Show.
Speaker 2 (01:05):
Wow, wow.
Thank you so much, Matt andJeff.
It's been a hell of anintroduction.
I've got responsibilities now.
Speaker 3 (01:14):
That's actually the only thing we do well Really
good intros.
After that, people really kindof tune out.
Speaker 2 (01:22):
Well, I can only say that it's true what you said,
all of it.
Speaker 3 (01:27):
The part about tuning out early, we know.
Speaker 2 (01:30):
There are no lies, basically.
So, yes, it's all true 30 plusyears of experience in 11
countries.
I cannot say counting, becauseprobably it's time to say stop.
You know, after 25 years oftraveling, we decided with my
wife to throw the anchor andstick to Mexico.
(01:51):
We've been living in Mexico nowfor about nine years.
It's a lovely country withlovely people.
In fact, it's probably the bestplace we have been so far,
because that's what pushed us toreally say, okay, we're going
to stay here.
And I was lucky to lead andopen a resort which is called
(02:17):
Chablé Yucatan, which happenedto become one of the best in the
world.
And then, three years ago,three and a half years ago, I
decided to start my ownconsultancy company and begin
working on my humble houseconcept and deliver it,
hopefully in the next two tothree years, with the first
(02:37):
master plan opening here inMexico.
Speaker 3 (02:42):
Rocco, what first caught my attention was the
following description of myHumble House the world's first
profit-sharing hospitalitycompany, putting people first,
making them not only employeesbut responsible for the success
of the business.
Matt, you mentioned that in theintro, rocco.
How does that work?
Speaker 2 (03:03):
Well, you see, I've worked in different parts of the
world and different companies.
They apply different rules intheir business model and, after
30 years of learning, you try toget the best out of each
company and then you put alltogether in a mixer, in a
blender, and you make a nicecocktail.
(03:23):
We all know what happened inthe past five years.
You know, during pandemic, alot of companies say I'm so
sorry, there is no more money,we have to let you go Correct.
So a lot of companies and I'mtalking about the big companies.
First, they let go of thousandsof people from one day to the
next because there was no money.
(03:45):
Now, how come these very samecompanies today still exist?
Not many people can answer methis question, because it's
politically incorrect.
And the answer to the questionis that there was money, of
course.
Otherwise this company todaywill not be flourishing again
(04:06):
because everyone is nowcelebrating success, profit
sharing, opening champagne, bestoccupancy rate, best growth
rate, and so on and so forth.
Five years ago there was nomoney and today there is money
by managing.
So this really pushed me tostart working on my humble house
as a business model, not justas a concept.
(04:27):
You know, a hotel is a hotel.
I'm not reinventing anythinghere.
You know, a hotel is a hotel.
We can have a different logo, adifferent name, a different
color paint on the wall, but ahotel is a hotel.
Nobody can change that.
I have not seen anythinginnovation recently other than
the co-living and co-working youknow, and maybe Airbnb some 10,
(04:52):
15 years ago.
So I decided to work on thisconcept because obviously I was
of the idea.
I am of the idea that, yes, acompany can be sustainable
financially sustainable all thetime if resources and I'm
talking about profit here iswell-managed and well-operated.
(05:16):
And so thus came theprofit-sharing path, as well as
a 10% of the net profit actuallybe preserved into a piggy bank
that cannot be touched byanybody, so that my handballers
cannot say there is no money.
(05:36):
The more profit we make, themore money will be in the piggy
bank.
And when there is a situation,the more money will be in the
piggy bank.
And when there is a situation,we can break the piggy bank and
then use this money for whatevertime it can be used maybe three
months, six months, a year, Idon't know.
But at least there is something, there is a little pillow.
(05:57):
So if we fall.
At least we know it's not gonnabe so painful.
Speaker 3 (06:02):
Structurally it sounds like an FF&E reserve
right.
Where you're taking part ofyour profits every year and
saying you know, in year fivewe're going to have to do a big
renovation.
We can't afford that all out ofour operating budget in year
five.
So, years one through five,we're going to set a little
aside every year so that when wehave to do that, it's there for
us.
Are you using that same concept, then, only for profit sharing
(06:26):
for employees?
Speaker 2 (06:28):
No, Well, let's talk about what happens in real
business in hospitality.
So there are three ways on howemployees can steal from a
business, literally steal.
They steal in time, so they'renot efficient.
(06:49):
They don't really work theeight hours or nine hours that
we actually pay.
They maybe work three, four,five and the rest of the three
hours they actually do nothingor do other things which are not
relevant to their workplace.
So we lose time by employingpeople a certain amount of hours
every day but they don'tperform the full hours shift
(07:13):
that they should work.
The second is stealing cash.
We we know that where there iscash handling there is an
opportunity to steal, and herein Mexico they call it robo
hormiga.
So the hand stealing A littlebit today, a little bit tomorrow
, but imagine $1 today, $1tomorrow, over a year it's going
(07:36):
to be $365.
But I worked in places wheresome employee were caught
actually stealing up to ahundred thousand dollars or you
know, on credit card fraud.
The third and the last thingpeople steal is actually in
things, amenities, a little beerfrom the from the fridge, when
people you know even I'm talkingabout equipment from the fridge
(07:57):
, when people you know even I'mtalking about equipment from the
maintenance warehouse, you know, light bulbs or even tools.
So these things happen becausethe employee don't care.
It's not their money, it's nottheir company, so why should I
care?
So why should I care?
Now, if we make peopleresponsible for that, the more
(08:21):
is preserved and is kept in thecompany, the better the result
will be for everybody.
So everyone will be watchfulover other people that don't do
that and they will eventuallypush them out of the business
slowly, slowly.
I don't want to put anyone injail for that.
(08:41):
I don't want to, you know,accuse people of being criminals
, you know, because they'restealing.
But I want to make sure thatthe majority of people that are
honest, they have integrity andthey work eight hours a day,
they push away these people thatthey don't.
Simple as that.
Speaker 3 (08:59):
So if you're recruiting employees, management
, your prospectus as managementis extremely light.
And in part I'm filling in theblanks here.
You didn't say this, butbecause employees are more
incented to work well, youprobably need less management.
But the idea that you willcompensate the employee more,
(09:23):
what does that come out of?
My assumption is that the topline of my humble house is not
outperforming the top line of aneighboring hotel of the same
size.
So if they're performing at thesame level, same revenues on
the top, but employees aregetting more of a financial
interest, what's not happeningin the middle?
Where do you find that extrabump for them?
Speaker 2 (09:44):
You know, it's the efficiency.
You know again, why should Iemploy 300 people, for example,
for a 500-room hotel, when I canemploy 250 instead of 300?
Because I increase efficiency.
Number one.
Number two when a team worktogether and truly have a
(10:07):
teamwork, that they help eachother, that they watch for each
other, you actually need lessmanagement.
You just mentioned that youdon't need as much supervision,
so you can cut already somemiddle line managers or
supervisors.
So imagine this on the payrollhow much of this is going to
save 2% here, 1% there, 3% here,another 5% there.
(10:32):
People become more aggressivein sales.
Part of my handball is alsotraining people now to upsell.
Actually, we will train peopleon how to manage a business.
We want our employee to becomean entrepreneur, Because the
only way to become anentrepreneur is to actually
(10:53):
learn how to be an entrepreneur.
You don't become anentrepreneur because you have an
idea and maybe you have somemoney.
Speaker 3 (11:01):
You have to know how to manage an entrepreneur.
You don't become anentrepreneur because you have an
idea and maybe you have somemoney.
You have to know how to managea business.
Speaker 2 (11:12):
Would the average wage then of my humble house
employee be better than the verysame job at a hotel next door.
It may not be better in termsof wages, but it will be better
in terms of after what you getin terms of benefit and profit
sharing and other things.
So you know, in terms of wages,there is a maximum you can play
with.
You don't want to start payingpeople more just to get the best
talent.
(11:32):
It doesn't work like that, forexample, in Los Cabos.
I mean, it's very, verycompetitive.
Whoever pays you $50 more, youjust leave.
People don't care.
But people don't startconsidering, instead of giving
more money and talking togetherbetween company and hotel
(11:53):
association and so on and soforth, what else can we do?
Instead of paying people moremoney, we should start to be
more creative and actuallyappreciate the team members in
other ways rather than justpaying more money.
Money is very important anddon't get me wrong, if we pay
peanuts, we get monkeys.
We all know that.
(12:13):
But also, on the other side ofthe medal, it's not what is
going to work for the long termpaying more money.
For example, in China 20 yearsago, the average Chinese person
would earn $30 a month.
A month.
There were very, very low wagesthose days.
Today the market is socompetitive that the only way to
(12:38):
attract talent is actually topay more.
Now it's almost more expensiveto build or to fabricate things
in China than it can be inMexico, because the wages have
gone so up.
Cost of manufacturing may beless because machine use and
(12:58):
mechanization or automatizationand the logistic is obviously
more efficient, but the cost ofwages is actually not cheaper
than it could be in Africa, forexample, in India or even in
Mexico.
Speaker 3 (13:12):
If we can stick with the financial model here, but to
the investor side.
So if the top line of a MHH isthe same as a hotel next door to
it, and is the profit from myHumble House expected to be the
same as a hotel next door?
Speaker 2 (13:31):
So the hotel next door?
It depends how it's managed.
At the end of the day, likeevery business, it depends how
you manage it.
It's not a brand that's goingto bring you better
profitability.
Brands normally even the bignames, the big five they only
promise you a better occupancyand a better average rate.
They don't promise you GOPNever, because this all depends
(13:55):
on costs and expenses and howthese costs and expenses are
managed.
But they promise you, or theycommit to, a better occupancy
and a better average rate.
Now, my humble house is notdifferent than that, but
different from other companies.
Part of my humble house, whichis a component of a master plan,
(14:18):
is actually having a higherratio of branded residences and
a lower ratio of hotelcomponents.
So that's where really thereturn on investment can be much
faster, because we are talkingabout here almost a 70-30%.
So 70% branded residences and30% hotel.
(14:42):
That's where really we all knowthat this business model is a
no-brainer.
It works.
It's now very much in demand.
A lot of companies are enteringthe branded residences market
and this is a no-brainer.
This has been done for 40 years.
It's been working very well sofar.
Middle, high-class and veryhigh-net-worth individual is
(15:05):
actually growing around theworld and to have capital in a
bank or to have capital in realestate, we all know is the way
to go.
So I think that this is astrategy that doesn't need to be
a genius.
You don't want to do it.
Speaker 3 (15:22):
You mentioned that an investor gets a negotiated rent
of the real estate plus aprofit share and therefore
getting an expected ROI and theappreciation of land and
property.
Of course, the operating profitor a portion of those are all
very normal components of ahotel investment model.
What is the IRR and thetimeline for an investor to
(15:46):
recoup the investment, as youare pitching this to investors?
Speaker 2 (16:15):
no-transcript.
Now, in the worst case scenario, I'm looking at a 70% return on
the investment within threeyears.
In the worst case scenario, inthe best case, it can be the 95%
I just mentioned, can be the95% I just mentioned and with
the operation and everythingelse, you start, basically start
(16:44):
getting net profit immediatelyafter that, do you?
have investors lined up yet,believe it or not.
I'm talking to a number ofpeople in Mexico and there is a
lot of interest.
There is a lot of interest froma company, particularly that
they just opened their firsthotel with residences about
three no, four years ago, justin the middle of the pandemic.
(17:07):
There is a lot of wealth inMexico and also international
wealth coming into Mexico andwanted to invest in Mexico.
Speaker 3 (17:17):
You describe your investors with a couple of words
that really stand out becauseit's unique.
I've never seen this in aninvestor description Disruptive,
angel investor, family office,but socially responsible.
Another sentence is truesocially responsible Not usually
the words that you hear whenyou're out asking for cash.
(17:38):
So it's kind of an interestingapproach that you put that so
straightforward that this is aninvestor with a different
attitude.
Speaker 2 (17:44):
Totally Investment with a purpose.
You know purposeful investmentare coming more and more on the
market.
Okay, more and more sociallyresponsible companies that can
still make money but can stillproduce goods for the community
(18:07):
or the industry that theyrepresent.
Because sustainability is notjust about recycling and
whatever, separating rubbishfrom plastic to aluminum,
because you can only do so much.
(18:28):
Sustainability is also aboutbusiness.
If you cannot make yourbusiness sustainable forever
ideally, that's notsustainability.
Where's the point to dosomething for three or five
years and then shut down becausethere's no money, because you
cannot produce further business,you cannot grow or improve your
(18:50):
efficiency.
I mean there's no point.
So for me, purposely investedmoney is also about being
sustainable as a business forthe long term, and I think more
and more investors are gettinginto this field as well.
Speaker 1 (19:05):
Rocco, do you have investors who question whether
or not they can actually beprofitable by being sustainable?
I oftentimes we look at hotelswho have an organic design.
They use local materials andthey really commit to a
regenerative way of business.
I think on the surface thosethings all tend to be extremely
(19:26):
costly, especially with thelocal materials.
Part of it because that stuffis going to be costlier than
prefab materials that aresourced in other ways, and all
that eats away at profits.
Do they give you pushback,saying, look, we'd love to do
this, but there's just no way.
How could we ever make thenumbers work?
Speaker 2 (19:45):
Listen, it is true that using local material can be
difficult in certain countries.
For example, in an island inthe Maldives, there is little
opportunity to use localmaterial because there is no
local material available.
The closest local is India orSri Lanka.
So you cannot cut a palm treeand make furniture out of it.
(20:09):
I mean it's not possible.
Otherwise you're going to havea bare sand pit.
That's all.
That's not sustainable at all.
Now, a country like Mexicodefinitely you can A country
like many countries in Europedefinitely can.
Africa can, india can.
(20:32):
Many countries cannot do becauseof the resources that they
don't have and therefore theyneed to import.
Whether they like it or not,they need to import material
from other countries.
That's where it becomesexpensive and not so profitable
after all, because obviously,instead of paying I don't know
$300,000 per key, you might needto spend $400,000 per key, so
(20:56):
this $100,000 going down thedrain.
But in a country like Mexico,you definitely can do that.
The sustainability part has acost, you know, and cost in
manpower, cost in time, yes, Iagree with that.
But again, I'm looking for that1% of investors, I'm not
looking for the 99% of investors.
(21:17):
So if I come across atraditional investors, then I
tell them you know, go investwith Marriott or Hilton or Accor
, you know they do very good job.
Speaker 1 (21:30):
Okay, it's time for the mystery question Are there
secret destinations in eitherItaly or Mexico, or both, that
you would direct people toinstead of say the Tulum's and
the Venice's of the world?
What are two places?
What's a place in eithercountry that could use a little
(21:53):
more tourism and deserves alittle more tourism traffic?
Speaker 2 (21:57):
Listen.
I mean in Mexico, for example,you can definitely look at
Yucatan as a destination.
You know a lot of people theylook at.
You know Quintana Roo, whereyou have Cancun, riviera Maya,
tulum, playa del Carmen and soon and so forth, you know, and
that's not Mexico.
To me, that's already sovandalized by tourism I mean
(22:24):
literally vandalized by tourism.
So it's actually not the realMexico one should expect and
should visit, should expect andshould visit.
So places like Morelia,michoacan or even Mexico City
Believe it or not, mexico Cityis touristic, but it's a huge
(22:46):
city.
You need a lot of time.
Coahuila I lived in Coahuila, inCuatro Cienegas, for a year and
a half.
I mean it's desert, desert andmountains, but the scenery is so
unbelievably nice.
I mean I had some of the besttime.
Valle de Guadalupe, which isone of the best wine regions in
Mexico, is amazing, and I can goon and on about Mexico.
(23:10):
Now I can go less on and onabout Italy, because I didn't
travel a lot within Italy.
I come from Calabria, which isstill unexplored from a region
point of view.
Basilicata, which is alsobetween Campania and Calabria,
actually sandwiched in between,basilicata, is also another very
(23:33):
beautiful region, region, butstill unexplored and not as much
affected by over tourism.
Marche, also on the Adriaticside, for example, is also a
very beautiful region Great wine, great food, great coastline
(23:58):
and still unexplored.
So yeah, there is a lot to see,but most people they go because
the transportation is easy youhave an airport Within an hour,
you get to your hotel and Bob isyour uncle.
Why should I drive six hours togo to a different place where I
don't know?
Speaker 3 (24:18):
And perhaps that's precisely why you should go
there, because it's a six-hourdrive and you might find what's
really happening in the country.
Speaker 2 (24:25):
You see, jeff, at the end of the day, my kind of
customer, my kind of client isthe traveler, is not the
tourists.
You know you have travelers andtourists.
You know the tourist is whereeveryone else is going and
that's okay.
Okay, maybe for comfort, maybebecause you've been there,
because somebody told you to gothere, but for me the travel is
the explorer, is somebody whoactually go to visit with a
(24:49):
purpose and not just go to thesame place over and over again
because they've been there andbecause they know they will take
care of them.
Yeah, I'd rather prefer thetraveler and discoverer.
Speaker 3 (25:01):
We wish you the best with my Humble House.
It's a business model unlikeanything I've ever heard of or
seen in this industry.
It's the potential to shakethings up.
I cannot describe how afraidother businesses should be if
this gets off to the start youplan for it to have.
Speaker 2 (25:21):
Shake it up.
Speaker 3 (25:22):
Imagine that, imagine , imagine if this works, it's
going to be a mess.
It's going to be a real messfor a lot of people.
Speaker 1 (25:32):
A beautiful mess.
Speaker 3 (25:35):
As they say, throws a Spaniard in the works.
Speaker 2 (25:38):
I can't wait for that day.
So I'm getting very closeanyway.
So I've got a lot of things onmy side which makes things going
the right way, and I'm only 54,so I still have a good time
ahead of me, so I won't give upvery quickly.
Hi everybody.
It's no Show starring me, mattBrown and Jeff Borman, from New
Delhi to the Yucatan jungle,from the Indian Ocean to the
Caribbean.
Our guest today, rocco Bova,has crisscrossed the world
defining what luxury hotels areand can be.
The hospitality consultant,passionate hotelier and luxury
(00:28):
tourism specialist, has beenworking in the industry for over
30 years Four Seasons, hilton,st Regis.
He's worked for everybody.
He is the founder of my HumbleHouse, a hospitality management
company which manages and ownsreal estate to build truly
sustainable hospitalitybusinesses, mainly focusing on
hotels, residences and glampings.
It is a profit-sharinghospitality company putting
(00:50):
people first.
Rocco once said that a traveleris someone who discovers,
learns and lives the visitedplace down to its roots.
Only then have you experiencedthe place.
We couldn't agree more.
Welcome, rocco, to no Show.
Speaker 2 (01:05):
Wow, wow.
Thank you so much, Matt andJeff.
It's been a hell of anintroduction.
I've got responsibilities now.
Speaker 3 (01:14):
That's actually the only thing we do well Really
good intros.
After that, people really kindof tune out.
Speaker 2 (01:22):
Well, I can only say that it's true what you said,
all of it.
Speaker 3 (01:27):
The part about tuning out early, we know.
Speaker 2 (01:30):
There are no lies, basically.
So, yes, it's all true 30 plusyears of experience in 11
countries.
I cannot say counting, becauseprobably it's time to say stop.
You know, after 25 years oftraveling, we decided with my
wife to throw the anchor andstick to Mexico.
(01:51):
We've been living in Mexico nowfor about nine years.
It's a lovely country withlovely people.
In fact, it's probably the bestplace we have been so far,
because that's what pushed us toreally say, okay, we're going
to stay here.
And I was lucky to lead andopen a resort which is called
(02:17):
Chablé Yucatan, which happenedto become one of the best in the
world.
And then, three years ago,three and a half years ago, I
decided to start my ownconsultancy company and begin
working on my humble houseconcept and deliver it,
hopefully in the next two tothree years, with the first
(02:37):
master plan opening here inMexico.
Speaker 3 (02:42):
Rocco, what first caught my attention was the
following description of myHumble House the world's first
profit-sharing hospitalitycompany, putting people first,
making them not only employeesbut responsible for the success
of the business.
Matt, you mentioned that in theintro, rocco.
How does that work?
Speaker 2 (03:03):
Well, you see, I've worked in different parts of the
world and different companies.
They apply different rules intheir business model and, after
30 years of learning, you try toget the best out of each
company and then you put alltogether in a mixer, in a
blender, and you make a nicecocktail.
(03:23):
We all know what happened inthe past five years.
You know, during pandemic, alot of companies say I'm so
sorry, there is no more money,we have to let you go Correct.
So a lot of companies and I'mtalking about the big companies.
First, they let go of thousandsof people from one day to the
next because there was no money.
(03:45):
Now, how come these very samecompanies today still exist?
Not many people can answer methis question, because it's
politically incorrect.
And the answer to the questionis that there was money, of
course.
Otherwise this company todaywill not be flourishing again
(04:06):
because everyone is nowcelebrating success, profit
sharing, opening champagne, bestoccupancy rate, best growth
rate, and so on and so forth.
Five years ago there was nomoney and today there is money
by managing.
So this really pushed me tostart working on my humble house
as a business model, not justas a concept.
(04:27):
You know, a hotel is a hotel.
I'm not reinventing anythinghere.
You know, a hotel is a hotel.
We can have a different logo, adifferent name, a different
color paint on the wall, but ahotel is a hotel.
Nobody can change that.
I have not seen anythinginnovation recently other than
the co-living and co-working youknow, and maybe Airbnb some 10,
(04:52):
15 years ago.
So I decided to work on thisconcept because obviously I was
of the idea.
I am of the idea that, yes, acompany can be sustainable
financially sustainable all thetime if resources and I'm
talking about profit here iswell-managed and well-operated.
(05:16):
And so thus came theprofit-sharing path, as well as
a 10% of the net profit actuallybe preserved into a piggy bank
that cannot be touched byanybody, so that my handballers
cannot say there is no money.
(05:36):
The more profit we make, themore money will be in the piggy
bank.
And when there is a situation,the more money will be in the
piggy bank.
And when there is a situation,we can break the piggy bank and
then use this money for whatevertime it can be used maybe three
months, six months, a year, Idon't know.
But at least there is something, there is a little pillow.
(05:57):
So if we fall.
At least we know it's not gonnabe so painful.
Speaker 3 (06:02):
Structurally it sounds like an FF&E reserve
right.
Where you're taking part ofyour profits every year and
saying you know, in year fivewe're going to have to do a big
renovation.
We can't afford that all out ofour operating budget in year
five.
So, years one through five,we're going to set a little
aside every year so that when wehave to do that, it's there for
us.
Are you using that same concept, then, only for profit sharing
(06:26):
for employees?
Speaker 2 (06:28):
No, Well, let's talk about what happens in real
business in hospitality.
So there are three ways on howemployees can steal from a
business, literally steal.
They steal in time, so they'renot efficient.
(06:49):
They don't really work theeight hours or nine hours that
we actually pay.
They maybe work three, four,five and the rest of the three
hours they actually do nothingor do other things which are not
relevant to their workplace.
So we lose time by employingpeople a certain amount of hours
every day but they don'tperform the full hours shift
(07:13):
that they should work.
The second is stealing cash.
We we know that where there iscash handling there is an
opportunity to steal, and herein Mexico they call it robo
hormiga.
So the hand stealing A littlebit today, a little bit tomorrow
, but imagine $1 today, $1tomorrow, over a year it's going
(07:36):
to be $365.
But I worked in places wheresome employee were caught
actually stealing up to ahundred thousand dollars or you
know, on credit card fraud.
The third and the last thingpeople steal is actually in
things, amenities, a little beerfrom the from the fridge, when
people you know even I'm talkingabout equipment from the fridge
(07:57):
, when people you know even I'mtalking about equipment from the
maintenance warehouse, you know, light bulbs or even tools.
So these things happen becausethe employee don't care.
It's not their money, it's nottheir company, so why should I
care?
So why should I care?
Now, if we make peopleresponsible for that, the more
(08:21):
is preserved and is kept in thecompany, the better the result
will be for everybody.
So everyone will be watchfulover other people that don't do
that and they will eventuallypush them out of the business
slowly, slowly.
I don't want to put anyone injail for that.
(08:41):
I don't want to, you know,accuse people of being criminals
, you know, because they'restealing.
But I want to make sure thatthe majority of people that are
honest, they have integrity andthey work eight hours a day,
they push away these people thatthey don't.
Simple as that.
Speaker 3 (08:59):
So if you're recruiting employees, management
, your prospectus as managementis extremely light.
And in part I'm filling in theblanks here.
You didn't say this, butbecause employees are more
incented to work well, youprobably need less management.
But the idea that you willcompensate the employee more,
(09:23):
what does that come out of?
My assumption is that the topline of my humble house is not
outperforming the top line of aneighboring hotel of the same
size.
So if they're performing at thesame level, same revenues on
the top, but employees aregetting more of a financial
interest, what's not happeningin the middle?
Where do you find that extrabump for them?
Speaker 2 (09:44):
You know, it's the efficiency.
You know again, why should Iemploy 300 people, for example,
for a 500-room hotel, when I canemploy 250 instead of 300?
Because I increase efficiency.
Number one.
Number two when a team worktogether and truly have a
(10:07):
teamwork, that they help eachother, that they watch for each
other, you actually need lessmanagement.
You just mentioned that youdon't need as much supervision,
so you can cut already somemiddle line managers or
supervisors.
So imagine this on the payrollhow much of this is going to
save 2% here, 1% there, 3% here,another 5% there.
(10:32):
People become more aggressivein sales.
Part of my handball is alsotraining people now to upsell.
Actually, we will train peopleon how to manage a business.
We want our employee to becomean entrepreneur, Because the
only way to become anentrepreneur is to actually
(10:53):
learn how to be an entrepreneur.
You don't become anentrepreneur because you have an
idea and maybe you have somemoney.
Speaker 3 (11:01):
You have to know how to manage an entrepreneur.
You don't become anentrepreneur because you have an
idea and maybe you have somemoney.
You have to know how to managea business.
Speaker 2 (11:12):
Would the average wage then of my humble house
employee be better than the verysame job at a hotel next door.
It may not be better in termsof wages, but it will be better
in terms of after what you getin terms of benefit and profit
sharing and other things.
So you know, in terms of wages,there is a maximum you can play
with.
You don't want to start payingpeople more just to get the best
talent.
(11:32):
It doesn't work like that, forexample, in Los Cabos.
I mean, it's very, verycompetitive.
Whoever pays you $50 more, youjust leave.
People don't care.
But people don't startconsidering, instead of giving
more money and talking togetherbetween company and hotel
(11:53):
association and so on and soforth, what else can we do?
Instead of paying people moremoney, we should start to be
more creative and actuallyappreciate the team members in
other ways rather than justpaying more money.
Money is very important anddon't get me wrong, if we pay
peanuts, we get monkeys.
We all know that.
(12:13):
But also, on the other side ofthe medal, it's not what is
going to work for the long termpaying more money.
For example, in China 20 yearsago, the average Chinese person
would earn $30 a month.
A month.
There were very, very low wagesthose days.
Today the market is socompetitive that the only way to
(12:38):
attract talent is actually topay more.
Now it's almost more expensiveto build or to fabricate things
in China than it can be inMexico, because the wages have
gone so up.
Cost of manufacturing may beless because machine use and
(12:58):
mechanization or automatizationand the logistic is obviously
more efficient, but the cost ofwages is actually not cheaper
than it could be in Africa, forexample, in India or even in
Mexico.
Speaker 3 (13:12):
If we can stick with the financial model here, but to
the investor side.
So if the top line of a MHH isthe same as a hotel next door to
it, and is the profit from myHumble House expected to be the
same as a hotel next door?
Speaker 2 (13:31):
So the hotel next door?
It depends how it's managed.
At the end of the day, likeevery business, it depends how
you manage it.
It's not a brand that's goingto bring you better
profitability.
Brands normally even the bignames, the big five they only
promise you a better occupancyand a better average rate.
They don't promise you GOPNever, because this all depends
(13:55):
on costs and expenses and howthese costs and expenses are
managed.
But they promise you, or theycommit to, a better occupancy
and a better average rate.
Now, my humble house is notdifferent than that, but
different from other companies.
Part of my humble house, whichis a component of a master plan,
(14:18):
is actually having a higherratio of branded residences and
a lower ratio of hotelcomponents.
So that's where really thereturn on investment can be much
faster, because we are talkingabout here almost a 70-30%.
So 70% branded residences and30% hotel.
(14:42):
That's where really we all knowthat this business model is a
no-brainer.
It works.
It's now very much in demand.
A lot of companies are enteringthe branded residences market
and this is a no-brainer.
This has been done for 40 years.
It's been working very well sofar.
Middle, high-class and veryhigh-net-worth individual is
(15:05):
actually growing around theworld and to have capital in a
bank or to have capital in realestate, we all know is the way
to go.
So I think that this is astrategy that doesn't need to be
a genius.
You don't want to do it.
Speaker 3 (15:22):
You mentioned that an investor gets a negotiated rent
of the real estate plus aprofit share and therefore
getting an expected ROI and theappreciation of land and
property.
Of course, the operating profitor a portion of those are all
very normal components of ahotel investment model.
What is the IRR and thetimeline for an investor to
(15:46):
recoup the investment, as youare pitching this to investors?
Speaker 2 (16:15):
no-transcript.
Now, in the worst case scenario, I'm looking at a 70% return on
the investment within threeyears.
In the worst case scenario, inthe best case, it can be the 95%
I just mentioned, can be the95% I just mentioned and with
the operation and everythingelse, you start, basically start
(16:44):
getting net profit immediatelyafter that, do you?
have investors lined up yet,believe it or not.
I'm talking to a number ofpeople in Mexico and there is a
lot of interest.
There is a lot of interest froma company, particularly that
they just opened their firsthotel with residences about
three no, four years ago, justin the middle of the pandemic.
(17:07):
There is a lot of wealth inMexico and also international
wealth coming into Mexico andwanted to invest in Mexico.
Speaker 3 (17:17):
You describe your investors with a couple of words
that really stand out becauseit's unique.
I've never seen this in aninvestor description Disruptive,
angel investor, family office,but socially responsible.
Another sentence is truesocially responsible Not usually
the words that you hear whenyou're out asking for cash.
(17:38):
So it's kind of an interestingapproach that you put that so
straightforward that this is aninvestor with a different
attitude.
Speaker 2 (17:44):
Totally Investment with a purpose.
You know purposeful investmentare coming more and more on the
market.
Okay, more and more sociallyresponsible companies that can
still make money but can stillproduce goods for the community
(18:07):
or the industry that theyrepresent.
Because sustainability is notjust about recycling and
whatever, separating rubbishfrom plastic to aluminum,
because you can only do so much.
(18:28):
Sustainability is also aboutbusiness.
If you cannot make yourbusiness sustainable forever
ideally, that's notsustainability.
Where's the point to dosomething for three or five
years and then shut down becausethere's no money, because you
cannot produce further business,you cannot grow or improve your
(18:50):
efficiency.
I mean there's no point.
So for me, purposely investedmoney is also about being
sustainable as a business forthe long term, and I think more
and more investors are gettinginto this field as well.
Speaker 1 (19:05):
Rocco, do you have investors who question whether
or not they can actually beprofitable by being sustainable?
I oftentimes we look at hotelswho have an organic design.
They use local materials andthey really commit to a
regenerative way of business.
I think on the surface thosethings all tend to be extremely
(19:26):
costly, especially with thelocal materials.
Part of it because that stuffis going to be costlier than
prefab materials that aresourced in other ways, and all
that eats away at profits.
Do they give you pushback,saying, look, we'd love to do
this, but there's just no way.
How could we ever make thenumbers work?
Speaker 2 (19:45):
Listen, it is true that using local material can be
difficult in certain countries.
For example, in an island inthe Maldives, there is little
opportunity to use localmaterial because there is no
local material available.
The closest local is India orSri Lanka.
So you cannot cut a palm treeand make furniture out of it.
(20:09):
I mean it's not possible.
Otherwise you're going to havea bare sand pit.
That's all.
That's not sustainable at all.
Now, a country like Mexicodefinitely you can A country
like many countries in Europedefinitely can.
Africa can, india can.
(20:32):
Many countries cannot do becauseof the resources that they
don't have and therefore theyneed to import.
Whether they like it or not,they need to import material
from other countries.
That's where it becomesexpensive and not so profitable
after all, because obviously,instead of paying I don't know
$300,000 per key, you might needto spend $400,000 per key, so
(20:56):
this $100,000 going down thedrain.
But in a country like Mexico,you definitely can do that.
The sustainability part has acost, you know, and cost in
manpower, cost in time, yes, Iagree with that.
But again, I'm looking for that1% of investors, I'm not
looking for the 99% of investors.
(21:17):
So if I come across atraditional investors, then I
tell them you know, go investwith Marriott or Hilton or Accor
, you know they do very good job.
Speaker 1 (21:30):
Okay, it's time for the mystery question Are there
secret destinations in eitherItaly or Mexico, or both, that
you would direct people toinstead of say the Tulum's and
the Venice's of the world?
What are two places?
What's a place in eithercountry that could use a little
(21:53):
more tourism and deserves alittle more tourism traffic?
Speaker 2 (21:57):
Listen.
I mean in Mexico, for example,you can definitely look at
Yucatan as a destination.
You know a lot of people theylook at.
You know Quintana Roo, whereyou have Cancun, riviera Maya,
tulum, playa del Carmen and soon and so forth, you know, and
that's not Mexico.
To me, that's already sovandalized by tourism I mean
(22:24):
literally vandalized by tourism.
So it's actually not the realMexico one should expect and
should visit, should expect andshould visit.
So places like Morelia,michoacan or even Mexico City
Believe it or not, mexico Cityis touristic, but it's a huge
(22:46):
city.
You need a lot of time.
Coahuila I lived in Coahuila, inCuatro Cienegas, for a year and
a half.
I mean it's desert, desert andmountains, but the scenery is so
unbelievably nice.
I mean I had some of the besttime.
Valle de Guadalupe, which isone of the best wine regions in
Mexico, is amazing, and I can goon and on about Mexico.
(23:10):
Now I can go less on and onabout Italy, because I didn't
travel a lot within Italy.
I come from Calabria, which isstill unexplored from a region
point of view.
Basilicata, which is alsobetween Campania and Calabria,
actually sandwiched in between,basilicata, is also another very
(23:33):
beautiful region, region, butstill unexplored and not as much
affected by over tourism.
Marche, also on the Adriaticside, for example, is also a
very beautiful region Great wine, great food, great coastline
(23:58):
and still unexplored.
So yeah, there is a lot to see,but most people they go because
the transportation is easy youhave an airport Within an hour,
you get to your hotel and Bob isyour uncle.
Why should I drive six hours togo to a different place where I
don't know?
Speaker 3 (24:18):
And perhaps that's precisely why you should go
there, because it's a six-hourdrive and you might find what's
really happening in the country.
Speaker 2 (24:25):
You see, jeff, at the end of the day, my kind of
customer, my kind of client isthe traveler, is not the
tourists.
You know you have travelers andtourists.
You know the tourist is whereeveryone else is going and
that's okay.
Okay, maybe for comfort, maybebecause you've been there,
because somebody told you to gothere, but for me the travel is
the explorer, is somebody whoactually go to visit with a
(24:49):
purpose and not just go to thesame place over and over again
because they've been there andbecause they know they will take
care of them.
Yeah, I'd rather prefer thetraveler and discoverer.
Speaker 3 (25:01):
We wish you the best with my Humble House.
It's a business model unlikeanything I've ever heard of or
seen in this industry.
It's the potential to shakethings up.
I cannot describe how afraidother businesses should be if
this gets off to the start youplan for it to have.
Speaker 2 (25:21):
Shake it up.
Speaker 3 (25:22):
Imagine that, imagine , imagine if this works, it's
going to be a mess.
It's going to be a real messfor a lot of people.
Speaker 1 (25:32):
A beautiful mess.
Speaker 3 (25:35):
As they say, throws a Spaniard in the works.
Speaker 2 (25:38):
I can't wait for that day.
So I'm getting very closeanyway.
So I've got a lot of things onmy side which makes things going
the right way, and I'm only 54,so I still have a good time
ahead of me, so I won't give upvery quickly.
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