Strategizing for Success During Portfolio Growth | LowKey Podcast (ft. Jean Buche, Leonardo Hotels) #30

Speaker A: Hey there.

Speaker B: You're tuning in to Loki by oki, our easygoing sessions for hotel professionals where we chat about industry trends, issues and solutions.

Speaker A: Hello, hello, hello, and welcome to episode 30 of Loki by Oki, the podcast for hospitality and more. My, uh, name is Clement Denarier, and I'm very proud and happy to be the host of this, uh, podcast. And I'm so honored to welcome Jean Buche. Finally, Jean, you made it to the podcast. Welcome, welcome.

Speaker B: Thank you.

Speaker A: Thank you so much for being here. Um, today we have an exciting topic, I think, very, very exciting. Um, it's all about growth and expansion. Um, and what I hope we can, uh, discuss about is basically how to deal with expansion, strategize when, um, a portfolio of hotels or a scope keeps on expanding. And for that, there is no better person than Jean Bush, um, who is VP of Revenue management for Leonardo Hotels. Welcome again, Jean. Super happy to have you here.

Speaker B: Good morning, Amsterdam. Thank you for having me. Uh, so, yeah, my name is Jean. I'm in charge of revenue management for Leonardo Hotels. I'm currently taking care of UK and Ireland. I'm doing distribution as well. Previously, I was doing the same job, uh, for Central Europe, and, uh, yeah, that's me.

Speaker A: Amazing. Well, thank you so much. And there already you said it, um, expansion, or at least change of scope. Right. Um, you started from one region and you continue to another one. Um, maybe we can start from kind of taking a step back. And when you hear the word expansion, what is it that comes up first? Is it, um, pressure? Is it opportunity? Is it chaos? Is it excitement?

Speaker B: Uh, in the question, you didn't have excitement, but it. Yes, excitement. Excitement is a word.

Speaker A: Um,

Speaker B: so in my background, I started at Leonardo Hotel 17 years ago.

Speaker A: 17 years ago, I started.

Speaker B: We had 10 hotels in Europe. Now we have, uh, all together, about 300. So, uh, the pace has been good, has been good. Uh, excitement, because, look, it's, um. We work in hospitality business because it's about human. It's about service, it's about, uh, experience. Uh, it's about culture. So every new destination comes with new, uh, culture, uh, new people, new processes, new, uh, law, new, uh, regulation, uh, as well. Um, so, uh, there is always a lot to learn. Uh, and, you know, genuinely, we work in the hospitality business because we love people and we love service. So growing, it's giving us a chance to give more love to. More destination, to offer more product to our guests as well. So it's all about that. So it's excitement. Of course, there is challenges, but you know, it's. The main part is fun, you know.

Speaker A: Yeah. And so 17 years in one company, um, and going from 10 to 300 hotels and more. Um, this is also expansion on its own. Right? Um, specifically for your scope. Um, is that also what made you stay for so long, that there is this learning, this excitement, this growth, this expansion?

Speaker B: Yes. So 17 years it's the same company. But I feel that I work in probably 10 different companies because we don't operate and we don't manage. Um, uh, Every stage between 10 and 20 we have a specific uh, stage. Then we can go to 50. Then we need to review all the processes, we need to uh, update them. We need to change the. So we don't work the same way in a small structure and in a big structure. In a small structure, we used to um. Everybody used to do everything. So um, to be multitask in big structures, you have much more processes now. In addition, we are a public company. So public company means that we have a lot of additional regulation to follow, more audits, um, what is absolutely fine. It's just that it's not the same organization in a big one than a small one.

Speaker A: Yeah, super interesting. And I imagine kind of being part of this change at some point you have to realize, wait, we are not that smaller structure, that smaller organization that we were maybe three, four or five years ago because the portfolio size has doubled. Right. So there is consequences of that.

Speaker B: It's part of all your. But it's also the product. When we started, when I started at Leonardo, it was more Leonardo tells four star, uh, 100 rooms, uh, this type of uh, of. Of chain. But very slowly, slowly, really fast. We went to uh, open the Leonardo Royale brand which is four star plus with conference, uh, business which is different operation. Then we went to open the Nyx Hotel which is lifestyle, um, uh, brand, uh, which is all about music experience. Um, so yes, there is expansion, but also in terms of uh, what we can offer today we, we. We operate hotels in uh, some resort properties in uh, Ipiza, uh, in Mallorca, uh, it's a different business. And then a city center hotel that is a business hotel. Totally. So it's. It's like one company but a lot of different businesses.

Speaker A: M. Yeah. And I imagine that that expansion both in volume but also in depth of different brands, different concepts, keeps um, you on your toes all the time. Right. You mentioned the pace um, of growth. Uh, I am personally very impressed with indeed how Leonardo kind um, of went from um, more of a local player with a Lot of uh, properties in Central Europe and obviously in Israel as well. Um, into now a uh, very strong European, pan European, uh, brand. Um, I just read that you acquired 23 properties in just one year. Um, I'm curious about this, uh, how do you deal with that? Right. Did something, um. Is there something that you learned from it that um, allowed you to kind of not break it? All right. Because that's a huge portfolio to acquire

Speaker B: in once it is. Yeah. So the structure of Leonardo Hotels is uh. We divided the business in Europe in different business units. So we have some local team with local knowledge, uh, that will be able to drive this uh, this growth. So when you take 23 hotels, it's not 23 hotels in the same country. It will be splitted, uh, between different uh, teams and uh. So therefore. But you know, the philosophy and the approach is to be humble and to be always positive and um, you know, we just take all this chance. I mean, uh, it sounds a lot, but I was thinking about it when, long time ago when we started to really grow and I was thinking, but uh, when I see all companies that are going down.

Speaker A: Mhm.

Speaker B: I mean, I need to be happy that I'm part of a company that is growing because you know, we don't have this kind of uh, thematic of uh, of uh, you know, downsizing, taking people out. It's more about we are growing and uh. And it's a chance.

Speaker A: Yeah, yeah. How to keep on growing, how to grow in the right way. Right. Um, without kind of um, too much. Sometimes growth is also um, dangerous. Right. Uh, if you don't take it the right way, it can be something that actually breaks a company or at least makes it more fragile rather than stronger.

Speaker B: Um, yes. In every decision we take, uh, we kind of uh, evaluate a risk and uh, we don't make a blind uh, bet just to say, okay, we put all of uh, eggs in the same basket. I mean it might be a French, a French say, but we don't put our eggs in the same basket. So we, it's just a question of uh, how we manage and how we calculate the risk. Um, and then we work, you know, we always approach it in a humble way. Our main goal is to uh, bring great service to the guests, great experience. When we want to bring something positive, usually something positive happen.

Speaker A: I m love that. I love that. Um, Jean, so you are obviously um, leading a commercial team, uh, commercial department. Um, you mentioned that you've expanded and you've diversified brands, countries, cultures, types of people. Um, maybe you can Tell one commercial tip or commercial rule. Um, you can give that to our listeners. That works everywhere. And one that you had to break that you thought worked everywhere, but actually, well, it didn't.

Speaker B: Um, look, whatever experience we have, any new market, we approach it in a way that, um, we don't take any preconception of, uh, rules. Uh, something that might work in the place might not work in another place. So we need to review everything, all the process. And as a revenue manager, we look at data. We don't look at, uh, just, uh, somebody saying, oh, it's good or it's not good. We look at data to evaluate, uh, how things are working. Also, um, with time, um, things change. You might try something today that will not work, but next day it might work. So in general, the revenue philosophy is to try and try again and always, uh, learn from it. And, uh, when you have something that is working, then, uh, to try in several places and to implement potentially in the whole chain. So, um, the only rule is I, uh, know one thing, is that I don't know anything. So it's an approach.

Speaker A: So you really start from this humble perspective again of actually I know nothing. Right. I'm here to learn. And I, uh, keep on experimenting and keep on testing and whatever works, then I can potentially duplicate that in other areas.

Speaker B: Yeah, look, we also have experience. I mean, uh, I work with different partners, different, um, tools, um, different pms, different. So there is this background. M. We need, um, a deep understanding today in technology, um, I mean, at least on what can be done and what cannot be done. So it's not that, um, uh, we don't come without experience or knowledge. It's just that, uh, we don't make any preconception that, uh, what we know is good. Um, it might, it might not work. We need to be respectful of, um, every destination, every country. Also, the guests. Guests might have different experience or expectation. Uh, a guest visiting Krakow, uh, might have a different expectation than the guest going to Madrid or Barcelona. So there is no one rule.

Speaker A: I want to come back on what you just said about, um, speaking specifically technology, obviously, uh, this is also where we, um, uh, try to help hotels and hotel groups scale. Um, and you mentioned the importance of tools, especially when there is growth. Um, how do you manage to actually find the right tools or partners that help you with the growth? Right, because it could be that you have, again, for a company of 10 or 30 hotels, um, great partners, but they don't fit anymore for 300. So how do you manage to kind of, uh, Keep your partners afloat with your growth at the same time.

Speaker B: So one thing that we have been always very um, focused, uh, is to have some scalable, uh, partners. So to be able to go faster, to work with systems that can connect in a fast way, uh, without uh. So you know, some systems are less flexible, some systems are more flexible. Technology, uh, is getting better and better. So uh, in general it's easier. But we need to always take some systems that can be scalable. And uh. And then, um, if we need to, you know, we always have our goal, uh, in front of us. And if we need to go fast, we go fast. And uh, we cannot take everything. Uh. You know, m. One of my mentor, uh, always told me the enemy of uh, good is perfection. So if we aim to have everything perfect in order to make the next step, uh, you might be stagnating and be stuck. So we need to bring results. We need to uh, move and we need the right partner. By right partners, that means to have the right contact people, the right um, account manager that you can trust that you can uh, keep for a long time, that you can know as well personally to. To. It's not just um, uh, uh, if you want to. If you need to. To. To help on the topic. And you. You have the number of your uh, of your account manager in your pocket. Huh. That can give you some keys that you will go faster. So. And to. To do that, to have that in place, it's just to well, do. To work respectfully with all your partners.

Speaker A: Yeah. And create that relationship that you have. Um, one topic that I kind of, I hear coming back and back. And that makes sense because that's also what happened, uh, in Leonardo hotels is the speed. Right. So going fast in itself is also a goal. Um, because you have to keep up, of course, with the expansion and uh, with the growth that comes in. Um, as a leader of uh, people, um, how do you manage to get your entire team to go at the same pace that is set. Right. Uh, and that might be, um, too fast for some people and uh, might be, ah, I don't know, too slow for others. I'm not sure if you guys are ever too slow for team members.

Speaker B: Look, it's um. Uh, first, I'm. I'm always interested in people, whatever it's a client or partners or a team member. So um, this close relationship, uh, uh, is helping. Second thing is as a leader, if I see something positively, uh, I can bring this energy to the team, uh, if I will only focus, uh, on challenges. And be negative, the mood will be very bad. So, uh, we need to set the mood and then we need to uh, learn to have the right, um, state of mind in place, um, to remind everybody that what we do is what we do and maybe some other might be doing better in some aspect. Uh, but then if that's the case, it's okay. Let's uh, learn about it, let's improve, uh, and always looking at improvement in general. One of the philosophy of revenue management is whatever we perform, we aim to always do better. You know, next year we will do better. The year after we will do better. We always aim on getting better. And we can only get better by reviewing what we did, learning from uh, from what we did. You know, we cannot. We can. The day I will say what we achieved was perfect. It's some, probably the day my, my boss will need to take me out of the business because that means I cannot bring anything more.

Speaker A: Yeah, yeah, you've reached the potential. And that's the ceiling question, um, on maybe a bit of a tactical question. The growth that we've seen with Leonardo, um, has happened outside of territories, but also inside of specific territories. So I'm curious to maybe your, um, return on experience from um, I don't know, adding a new hotel in a portfolio that is actually potentially competing with existing hotels. Um, how do you deal with that? Is there some sort of internal competition? How do you avoid cannibalism, uh, of demand, um, in a specific market?

Speaker B: Um, well, this kind of thematic came to me as well. Uh, as a matter of fact, it's something that we have been discussing with some colleagues. Uh, but as a matter of fact, when there is an hotel project, we can bid on it, but if we don't get it, somebody else will get it. And it will be anywhere in hotel. Mhm. So uh, we have a situation in Munich, for instance, where we have two hotels in front of each other. One is a Leonardo hotel, the other one is a nice hotel. Um, if it would not have been us, um, managing to get the second hotel, it would have been, I don't know, another brand. So now having that in mind, it uh, will be easier for me to manage the business if I manage both hotels. Because if the hotel in front of the road is a competitor, it will be more challenging. So as a matter of fact, it's like no, uh, need to be afraid because at the end it needs to happen. And a hotel project, when um, an investor, somebody is making uh, a building permit, it will be a hotel. So there's no choice.

Speaker A: So it will be a hotel anyways. It might as well be yours. And at least if it's uh, inside of the same portfolio, you can agree and discuss strategies so that it doesn't compete as much as what the competitor would bring in.

Speaker B: Potentially for the case of uh. I mentioned this case in Munich. So what we did is we. We established two different uh, hotel brands.

Speaker A: Mhm.

Speaker B: One is a lifestyle hotel. Uh, the other one is more Leonardo. Nice, uh, four star, very popular but very nice but normal hotel. Let's say, you know, business, uh hotel, four star. The other one is a lifestyle hotel. So we could, we had the chance because we took over the, we took the project, we took, we had the chance to decide what we wanted to offer the guest. Uh, it could have been another chain that would want to. Another operator that would want to take exactly the same type of product and then it will be kind of uh, probably um, less interesting for the real. For the market, for us.

Speaker A: Interesting. So you kind of took your, your destiny in your own hands uh, and actually created two different segments and different strategies. Very, very interesting. Another uh, tactical question, um, that I'm sure our listeners will be uh, will be curious about. Um, and you um, can be as uh, specific as you want or not. But when you enter a new market. Right. So let's imagine there is uh, some more growth that happens in Leonardo. You enter a completely new market. What is the first commercial action that you would take? Um, in order to learn to understand the market um, and really kind of grow from there?

Speaker B: M. Most of the market where we develop where with uh, some takeover. One step that is uh, I think essential is not about revenue management or commercial. It's to understand the tax structure.

Speaker A: Mhm.

Speaker B: Uh, because it's not the same tax and the same rules uh in every country. So we need to understand that because we will need to have it set up in the correct way. Um, VAT is one easy tax that uh, everybody knows. But in some countries there is um, very few uh, city tax or levy tax, whatever you call it. In some countries there is. And so we need to have an understanding of that because it will impact some of the business practice. So uh, actually the first thing that we need to do is to have a proper audit of the financial uh, tax, uh, aspect.

Speaker A: Yeah. So rules, regulations, laws first. Because that's something you can't change obviously and you need to apply to them. And then on top of that you build a commercial strategy.

Speaker B: Yeah. Yes. Yeah, commercial. You know, it's a. We operate uh, in different type of destination, but most of the hotel are in city center, relatively well located. So big destination A and B destination in city center. So there is a pattern. Um, you know, there is some. If I, There is some partners that will be strong in every destination. You know, if you, if you take the big ota, it doesn't really matter if it's which country it is. The big ota are big OTAs and they will be strong in old market, um, in terms of um, uh, learning. One thing that is uh, interesting when we take over an OTA is there is some experts that we can always uh, call. Uh, if we take a new destination, we can manage to get a call with a uh, market manager from the OTA that will have a deep understanding of the, of the destination that can explain us some things that we might not be aware. Yeah, uh, like a uh, specific area. Some. Yeah, some. You know, we have some resources just that sometimes we just need to ask. It just ah, it's not. Yeah.

Speaker A: And they are of course the experts of that market. Right. They've seen it, they've seen it across brands, they've seen patterns when it comes to demand to gas types and all of that. So use that um, because it's available to you if you ask.

Speaker B: Yeah. Just to ask. Just to uh. It's not very complicated. Some of the resources are just in front of us, you know, just us to pick it up.

Speaker A: It almost sounds easy, John. It almost sounds easy.

Speaker B: It's a lot of work, you know, it's uh, taking over a lot. There is a lot of processes, but it's uh, one of the steps that uh, is important. Yeah.

Speaker A: And it sounds like again this is part of your learning. Starting humble, um, allowing to ask for help or ask questions around, uh, in order to get that expertise that is there from the local uh, uh, players. Very interesting. Maybe another question when it comes to uh, leading people, um, you have led people during the growth, um, and during fast growth. So again we come back to the dimension, uh, of speed. What is it that you wish someone had told you before you started this entire journey?

Speaker B: The first big takeover I was part of, uh, I was very stressed and uh, I was probably not the nicest person to work with at this time. Uh, but I would have wished that someone tell me, okay, we are doing it. Breathe, relax, uh, and have fun. Because it's uh, whatever challenges we will find on the way there will be and uh, every expansion or every uh, new group of hotel will come with some specific challenges. It can be Technical. Very often it's technical. It can be some. But every expansion has its own story.

Speaker A: Mhm.

Speaker B: And uh, in one case uh, we might find that we have an issue with a uh, payment system that will not be compatible with uh, our environment. We might find that uh, the hotel uh just signed a contract with uh, uh, another IT partner that we don't work with for five years and we might have a surprise that to break the contract will be complicated. Every expansion has a story, um, but either uh, we stagnate or we move on. And we are on the way to uh. So our philosophy is to move on. One thing that maybe is important uh to have in mind the Leonardo Hotel Group is, is um. We, we, we have 300. It's not only a brand, we, we operate our properties. So it's uh, it's our own brand and we operate. It's not the same and you know um, companies like um, Marriott, uh, so all the mega chain, they operate as well some hotels but it's uh, it's not the, the core of their business. M. So it's um, so it's a bit different perspective especially when we are speaking with our partners.

Speaker A: M yeah, yeah. Because you really have this uh, operating at heart. Right. Kind of service. Bring back that promise to the guest and I imagine to your other partners it's easier.

Speaker B: You know, it's um, uh I can imagine for a brand, uh, for a mega chain it's uh, to they need to establish a kind of culture, to establish some training. Uh, but they need to do that for some hotels that they don't operate. For me, if I operate and I can simply go there and speak with the people and I have more impact and I think it's easier but it's yeah, amazing.

Speaker A: So um, if I have to summarize, uh, one of the tips that you would give yourself if you would go back uh, maybe 12 years or 15 years before the first big expansion is breathe and have fun and move on. And I think on that we also going to move on. And thank you so much for um, this very uh, insightful exchange. Um, we are getting to uh, the time of the shameless plug. So um, this is your opportunity if you want to um, to actually plug um something. It can be personal, it can be professional. Um, it's uh, it's up to you

Speaker B: and uh, um, what can I say, uh, work with love, uh, have fun, enjoy and uh, I give you uh, some of the time to plug whatever you want.

Speaker A: I mean I think this is amazing what you've mentioned here is also maybe plugging the industry. We love to work with people. Um, you have to create relationships. You have to create, uh, or at least you have to love working on relationship, working with people.

Speaker B: Somehow if you don't do, you're probably in the wrong industry. You know, it's, you can, ah, as a joke, ah, insider joke of a hospitality business. I mean, you know, if you don't have that in mind, you can work for a bank, you know.

Speaker A: Yeah.

Speaker B: Nothing against bank.

Speaker A: Nothing, nothing. We also need banks obviously to make the hospitality industry work. Um, but I think this is an amazing plug for the industry. Right. For the love of the industry. I am super passionate about this industry and the people that work in it also make that, um, so I think you're one of these people. And again, I'm so, so happy that uh, we could make this moment happen. Um, a fellow Frenchman as well. That feels very, very good. So thank you for that, Jean. Um, and I think, um, we're going to now wrap up. All right, thank you so much to all our listeners. Um, this was episode 30 on growth and expansion. Um, if I have to summarize, uh, the great insights that you gave us, Jean, it's all about when you want to grow fast, when you want to expand and still, um, be respected by all your partners and obviously your team. It's all about starting very humble. It's all about learning and keeping on developing, um, obviously building experience, uh, and using that experience for every single step. It's also about creating relationships and using these to go fast, hopefully not break too many things, um, but always do better when step after the other and finally have fun, breathe and have fun.

Speaker B: I may I add one thing, it's uh, to be very open. You know, there is a lot of startup, uh, in our industry. Uh, when we first met together, you were with Eric at this time running itb, probably with a stolen pass, probably it's um, without m. So you were just, um, beginning the journey. Uh, I think it's important to be open to meet new people. Uh, and for sure you need to manage your time, but always to try if you can support, if you can help, if you can, uh, give some tips to some people because, uh, I think it's part of the cycle. Uh, if you do some good, if you offer some time yourself, things, uh, will come good again.

Speaker A: Uh, it's a cycle and we finish with karma. I love this. Thank you so much, Jean. Um, this was Loki by Oki. See you next time.

Speaker B: Thank you for having me. Bye.