$1.6B Hotel Portfolio CEO on Who Wins the AI Era

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Speaker 1: The incentives are completely misaligned in our 2 - > industry. You have the owner who has seen the value leakage go 3 - > away from them to operators, to brands, to booking channels, and 4 - > now even to VC backed software companies, and that's not 5 - > sustainable. 6 - >

Speaker 2: From Hotel Tech Report, it's Hotel Tech Insider, 7 - > a show about the future of hotels and the technology that 8 - > powers them. Today on the show, we have Sloan Dean, the former 9 - > CEO of Remington Hospitality, which is one of 10 - >

Speaker 3: the largest hotel management companies in the 11 - > country. 12 - >

Speaker 2: In this conversation, we discuss where AI is creating 13 - > leverage for hotels, how the balance of power and hospitality 14 - > could shift over the next decade, and what owners can do 15 - > today to position themselves on the winning side of change. 16 - >

Speaker 3: Sloan, thanks so much for joining us on the Hotel Tech 17 - > Insider podcast today. It's great to have you. 18 - >

Speaker 1: Yeah. Thanks for letting me be here, Jordan. 19 - >

Speaker 3: Well, we really appreciate you coming on. We're 20 - > really excited about this because you are obviously one of 21 - > the youngest hotel management company CEOs, I think that I've 22 - > ever heard of. And one that's really interested in technology, 23 - > which is a unique characteristic for a management company CEO, is 24 - > my legacy kind of this service real estate business. Can you 25 - > talk us through a quick background of how you got into 26 - > that role at such a young age and what you saw coming into it 27 - > from a technology perspective? 28 - >

Speaker 1: Yeah, so probably my interest in tech, if I rewind 29 - > the tape, was I went to Georgia Tech. So I have a industrial and 30 - > systems engineering degree and finance degree from tech. And so 31 - > I've always been really interested. Actually, I used to 32 - > be fluent in SQL code and could program in Java and C plus plus 33 - > when I was younger. So there's always been that kind of 34 - > interest, I guess. 35 - > But fast forward, I was a senior vice president on the asset 36 - > management team at the two public affiliate REITs, Ashford 37 - > Hospitality Trust and Braemar Hotels and Resorts, Working for 38 - > Ashford Inc, the c corp that now owns Remington, it didn't at the 39 - > time, it was affiliated with it. And I was the lone insider 40 - > considered to replace the president, Mark Sharkey, that 41 - > was retiring at the end of summer twenty seventeen. So I 42 - > was senior vice president on the asset management team. I've been 43 - > there since the summer of twenty thirteen and raised my hand and 44 - > went through a four month process that seemed like it drug 45 - > out, drug out. And then walked into Monty Bennett's office 46 - > 01/02/2018, he slid a piece of paper across the desk. 47 - > Literally, that's how it happened. And he said, this is 48 - > what I wanna do. And I was CEO and president for eight years 49 - > and left at the end of last June. 50 - >

Speaker 3: And when you came in, what was the scale of the 51 - > business, business composition of managed franchise versus 52 - > independent, kind of owned versus managed? Can you just 53 - > talk a little bit about that to set the stage for the technology 54 - > that you came into? 55 - >

Speaker 1: Yeah. So when I took over running the company, we 56 - > were around 6,000 employees, over 80 hotels. So I wanna say 57 - > it was 84. All but one were owned by the affiliate REIT, so 58 - > kind of like an owner operator affiliation. We managed one 59 - > hotel on a long term lease structure for the Hilton 60 - > Marietta that they still operate today. 61 - > And then when I left, we had more than doubled the size of 62 - > the company. We had done one M and A transaction, Chesapeake 63 - > Hospitality. The REIT have been substantial net sellers for the 64 - > last particularly the last three or four years, but really since 65 - > post COVID. And both platforms have sold a good many assets. I 66 - > think when I left, we were over a 150 hotels, but two thirds of 67 - > the company and growing much faster was all third party. 68 - > So when I was there, we did 20 to 30 new net unit deals a year, 69 - > third party. So we were growing like wildfire in third party 70 - > while the REITs contracted. If the REITs had not been a net 71 - > seller when I left, we'd probably have been closer to 200 72 - > hotels. Yep. It was literally when I took over, we were just 73 - > an affiliate manager and then we really transformed the company 74 - > to be top five third party manager by the time I left. 75 - > We're about $1.61700000000 in hotel total revenue when I was 76 - > leaving. 77 - >

Speaker 3: And the mix between independent and branded 78 - > franchise? 79 - >

Speaker 1: So we got up to about 20 independents under management 80 - > out of that, call it 150. We had about 50 Marriott, mostly full 81 - > service, about 50 Hilton, couple of Hyatt, IHE smattered in. So 82 - > majority branded full service. Yeah. But then we also had some 83 - > really amazing independent hotels like Bardessono in Napa. 84 - > Mr. Sees then was independent now as a branded hotel with 85 - > Hilton in Beverly Hills, Pier House. So some really iconic 86 - > real estate. So the quality of the portfolio was quite 87 - > exceptional, particularly on the independent side. 88 - >

Speaker 3: And if you were buying or building a hotel 89 - > today, would you rather own a branded hotel or an independent 90 - > from an economics and returns perspective? 91 - >

Speaker 1: It entirely depends on the real estate itself. But I 92 - > would say, if I were an investor in a hotel, I would only invest 93 - > in upper upscale or luxury because we're very much in a k 94 - > shaped economy and that's going to continue. The haves will 95 - > continue to have more And we have a growing or a grow and 96 - > expanding top 20% in The United States and the 80% are 97 - > struggling. For that 80%, we're the first generation in a couple 98 - > millennial where our kids are not as wealthy as the parents. 99 - > And so that's gonna continue. 100 - > I think I would own an independent luxury hotel. 101 - > There's more risk in that on the equity side, but all the best 102 - > deals I was ever involved with were very unique real estate 103 - > independent hotels. 104 - >

Speaker 3: And do you think the brand value proposition as a 105 - > whole, the franchise flag model, obviously the last innovation is 106 - > really this asset light model for them. But it seems like the 107 - > fee structure, the services offered, do you feel like 108 - > they've evolved materially with so many technological changes 109 - > since software, OTA, since AI now? Do you feel like that's 110 - > evolved enough for the owners of those assets? Or do you feel 111 - > like there's still kind of changes that need to be worked 112 - > out? 113 - >

Speaker 1: Well, so it's a self correcting loop. I had Chris 114 - > Silcock, the president of Hilton, on my podcast. And I've 115 - > asked Tony Caffuano this, who's on my podcast, Not Done with 116 - > Sloan Dean. And they all agree there's too many brands. Yeah. 117 - > And even the people that work for the company, they're 118 - > confused much less the consumer. But until owners stop signing 119 - > franchise agreements, why would they change? Yeah. They have 120 - > fiduciary responsibilities to the shareholders. So they're 121 - > kind of doing what they're structured to do. 122 - > Yeah. Create this value leakage that goes away from the hotel 123 - > owner. Yeah. I don't think that stops until owners say we're 124 - > gonna stop signing twenty year terms with liquidated damages. I 125 - > do think that the incentives are completely misaligned in our 126 - > industry. 127 - > You have the owner who has seen the value leakage go away from 128 - > them to operators, to brands, to booking channels, and now even 129 - > to VC backed software companies. Yeah. And that's not 130 - > sustainable. And something has to change. I don't think it's 131 - > just the brands. 132 - > The brands have gotten the most attention because of the skiffed 133 - > article recently, and there's a concerned owner's letter going 134 - > around privately from 30 of the largest franchisees that 135 - > Marriott has. So the brands know they have like an upset owner 136 - > community. The, hey, owners listening in, it's not gonna 137 - > change unless you stop signing franchise agreements. Yeah. It's 138 - > a capitalistic self correcting loop. 139 - >

Speaker 3: So Marriott flagged properties don't have a 140 - > different rate than random hotel down the street? 141 - >

Speaker 1: Oh, their take rate is the lowest in the industry. 142 - > Yeah. So, yeah, OTA's commission on a merchant or a hotel collect 143 - > averages out to about 11 and a half percent, whereas an 144 - > independent hotel may be paying 22%. But the published rate the 145 - > consumer sees is the exact same. 146 - >

Speaker 3: For sure. 147 - >

Speaker 1: And I think the OTAs want that. I think it gives 148 - > validation to their customer set. I mean, I think if you look 149 - > at the OTAs, they've actually materially outperformed everyone 150 - > that's publicly traded. I mean, okay, so fifteen, sixteen, 19%. 151 - > That is Expedia, that is then booking.com and then Airbnb's. 152 - > Yep. You won 2026 revenue growth year on year. There's no other 153 - > travel companies. Hilton and Marriott were six and nine. I 154 - > forget which one was six, which one was nine. 155 - > So the OTAs have been up into the right and have been crushing 156 - > everyone else. So if you look at it purely on the market 157 - > capitalization, to back to your original question, I would say 158 - > the OTAs seem to be getting it right all the time. 159 - >

Speaker 3: At some point does Marriott become an OTA if they 160 - > get enough scale though, and they have soft brands and now 161 - > they're loosening owner requirements to join their 162 - > distribution network? 163 - >

Speaker 1: Yeah. So in some ways, the OTAs are just a 164 - > marketplace. K? There's technology marketplace. And they 165 - > basically, in long term game theory, were smarter, more 166 - > clever in thinking about how the consumer evolved over time. 167 - > And they basically flanked hotel owners, operators, and the 168 - > brands. And that ship has sailed. Now they're more 169 - > powerful and worth more. Booking.com is worth more than 170 - > any of the hotel chains. I believe, yes. 171 - > I think what you'll see in hotel brands, you'll see much more M 172 - > and A. It's a mature market. So you're gonna have Marriott, 173 - > Hilton, Hyatt, Bai, others. They may be the last three standing 174 - > before you get into, you know, the European Trade Commissions 175 - > as well as the United States FTC trying to say it's, you know, 176 - > monopolistic for any m and a. Yep. 177 - > And they'll just get bigger and then they're a marketplace. You 178 - > know, I mean, that's basically what Bonvoy is, is like Bonvoy 179 - > is a currency that they keep diluting the currency of. Is it 180 - > all that different of a marketplace than per se an 181 - > Expedia? And that's where they're going. And that's why 182 - > they're adding on experiences. 183 - > You know, you got Ritz Carlton Yachts. You then have Marriott 184 - > Media that is launched. So yeah, I think the answer is yes long 185 - > term. They just become another marketplace. 186 - >

Speaker 3: We'll get more into some of these structural 187 - > questions later. I wanna jump back to the tactical side, like 188 - > coming in as management company CEO at a young age, technology 189 - > background, what did you see from a technology perspective? 190 - > Where did that sit in your priorities in your first ninety 191 - > days because you're already at the company already? Where did 192 - > it stack up against priorities? And what was the state of 193 - > affairs at Remington since you have independent chain, 194 - > different franchise flags on it? 195 - > How did things stand? How did you think about technology from 196 - > day one? 197 - >

Speaker 1: So I did like a ninety day listening when I came 198 - > in and just I met with as many people as I could. I observed, I 199 - > brought in a company to do employer branding. I didn't like 200 - > how we were getting our data for associate opinions because it 201 - > was not pure data. It was basically just telling the 202 - > former officers what they wanted to hear. So I brought in a new 203 - > Yeah. 204 - > A new company. And I had three strategic imperatives that I set 205 - > around my hundred day mark. That was really focused on people and 206 - > culture. And that's where Room to Thrive kind of came out. And 207 - > that was kind of our slogan that, you know, thrive is for 208 - > the long term, not just for one quarter, not just for one year, 209 - > for a long period of time. 210 - > Then secondly, a focus on process training, really making 211 - > things scalable because I knew in the future we wanted to go 212 - > into third party and we couldn't just act like a regional owner 213 - > operator. And 214 - >

Speaker 3: then 215 - >

Speaker 1: the third was technology, what I said to bring 216 - > those three together. And so Remington, when I took over in 217 - > 2018, was very much a laggard in a laggard industry. So, you 218 - > know, you look at hotel operations, it is, I mean, in 219 - > the bottom quartile of using technology in innovative ways, 220 - > being ahead of the bell curve and adopting new ways of doing 221 - > business. We are an industry that is a laggard because we're 222 - > a physical real estate capital intensive business first and 223 - > foremost and people intensive. And then you throw on then 224 - > Remington was even further behind the industry. 225 - > And part of that was, you know, a no knock to the former 226 - > president who I took over from. He just didn't really value 227 - > that. He was a little more old school and did a lot of great 228 - > things over his tenure. But that definitely had been neglected, 229 - > you know. And so for a good example, we didn't have a labor 230 - > management system. 231 - > We didn't have a learning management system that we were 232 - > still doing a submittal of PTO via paper instead of like 233 - > automating and just going into ADP and submitting for your time 234 - > off. And I could go down and down the list. And so my 235 - > priority for the first two years until COVID hit, you know, 2018, 236 - > 2019, was not revolutionary change. It was, let's get to 237 - > where we're at least in the median of the industry, which is 238 - > still way behind other industries. 239 - >

Speaker 3: Yeah. 240 - >

Speaker 1: Because when you come into an organization that has 241 - > thousands of employees, and I was 36 at the time, I'm 45 now. 242 - > And what all young leaders tend to make a mistake is that they 243 - > want to move fast and do sweeping change. They have like 244 - > this big grand vision, but to move an organization that is 245 - > thousands of people and you're a staffing company, you know, 246 - > that's what an operating company is. That it's you're coming into 247 - > the organization and you can't be so different that the body 248 - > rejects you like a cancerous organism. Yeah. 249 - > And so you have to come in and think about change management, 250 - > training processes, what and it's that delicate balance of 251 - > how fast can I go and how do things get absorbed? And then 252 - > cost, of course, you're you know, implementing certain 253 - > technology solutions is very expensive. So I weighed all that 254 - > and it was a lot of what I'd call tech adoption that was 255 - > nothing revolutionary that we should have done over the prior 256 - > decade. And we did like a two year catch up. So that when we 257 - > went into COVID, were we the best in technology in the 258 - > industry? 259 - > No. But we were at least better than half of the industry. And I 260 - > would say moving towards and then COVID hit and then we did a 261 - > lot more changes after that. But that was how I approached the 262 - > business coming in. Think too many young leaders come in and 263 - > try to dramatically change the business. 264 - > And if you're in a moderately successful business, that can be 265 - > really detrimental. 266 - >

Speaker 3: And so you came in labor management and learning 267 - > management were like viewing this company as this staffing 268 - > organization, service organization. Labor management 269 - > and learning management were two things that were not being done 270 - > digitally. How did you approach those? 271 - >

Speaker 1: Man, I just mentioned those. We didn't have a online 272 - > forecasting budgeting system. We did not have an RMS at the 273 - > independent hotels. So I basically advised there were 274 - > kind of 10 or 12 technology priorities. And then I would 275 - > have a business leader own project manage one, and then we 276 - > had a sequencing document that kind of went across the gamut. 277 - > And so in hindsight, even though a lot of that was catch up, it 278 - > was probably too much in hindsight. I mean, I burned out 279 - > some people. I got feedback at the end of nineteen that the 280 - > amount of technology change was overwhelming for people. We 281 - > installed our first PO system. We went through a whole 282 - > transformation with ADP and our payroll and LMS. 283 - > We then went through the independent hotels installing 284 - > revenue management. We then went through and installed Hotel 285 - > Effectiveness as the learning management system. And there was 286 - > about 10 or 12 substantial installations that we did. I 287 - > just happened to mention a couple. 288 - >

Speaker 3: Yeah. Were there a couple installations that were 289 - > you just look back on it and you're like, there was that wow 290 - > moment. We installed this, maybe not day one, but as it got 291 - > ramped up, it got disseminated through the team, that you 292 - > really saw that concrete result that anybody who's running a 293 - > business of this scale that's not using this or even an 294 - > independent is kind of foolish. 295 - >

Speaker 1: I think for sure, if you're a mid sized to large 296 - > operating company and you do not have a sophisticated labor 297 - > management system, that it will pay for itself in spades. So 298 - > that's one. Just because you probably meaningfully don't know 299 - > how you're doing productivity wise to your standards, how you 300 - > compare to industry standards, you probably even have a hard 301 - > time fully tracking and in a real time impacting overtime 302 - > usage. And in a lot of cases, contract labor is hidden wages 303 - > because you get billed invoiced aggregately and there's actually 304 - > a lot of fraud in contract labor. And so it allows you to 305 - > shed a light on these things that you naturally wouldn't, 306 - > even if you have a pretty good financial ERP. 307 - > I think also having a really best in class RMS, particularly 308 - > independent hotels, again, pays for itself in spades because you 309 - > just you get more automation, your pricing, and you'll get in 310 - > the hotel faster iteratively throughout the day. There's a 311 - > few of those that were just like huge home runs that were like, 312 - > of course, the install, there's always issues or training start 313 - > stops. But those are probably two that really stand out that 314 - > was just like a no brainer. 315 - >

Speaker 3: As you think about the next five years due to AI, 316 - > do you see structural changes? Maybe more outsourcing of 317 - > functions like revenue management the same way that we 318 - > outsource to marketing agencies. Do you see any structural shifts 319 - > that will fundamentally change or opportunities that people 320 - > aren't looking at that will change that dynamic and make it 321 - > a better world to own hotels in? 322 - >

Speaker 1: Well, if you look at where businesses have become 323 - > commodities, their value has leaked away from them. Or said 324 - > in a different way. If they're not close to the customer and 325 - > they don't control the data, they've all seen value leak away 326 - > from them. You say in the ecosystem hotels, what are those 327 - > categories? That's the hotel owner and that is the manager. 328 - > And there's thousands of owners and thousands of managers often 329 - > self managed in The United States. And I think they're the 330 - > ones that will be upended in this cycle of AI because the 331 - > brands are only getting bigger and are becoming marketplaces. 332 - > The OTAs are already huge data companies and massive 333 - > marketplaces. Now you could argue maybe the LLMs eventually 334 - > pose a risk to both. We all are booking via AI agent at some 335 - > point. 336 - > You know, how does the OTA model evolve? How does the brand model 337 - > evolve? There's there's some of that. But I think over the next 338 - > five or ten years, you have all these service businesses, not 339 - > just hotels where the incumbents are gonna be put out of 340 - > business. And there's gonna be a new way of doing hotel 341 - > operations, looking at real estate ownership. 342 - > And you have all these incumbents that are basically 343 - > commodities, you know. And so I'm placing judgment on owners 344 - > and operators throughout the hotel industry. And I think a 345 - > lot of the incumbents in that space, even big, big companies 346 - > are at substantial risk of being circumvented by smaller 347 - > startups, new way of thinking AI really massively. They all think 348 - > it's gonna benefit their business. What they don't 349 - > realize is they're not innovators and they're 350 - > commodities. 351 - > And so anyone who's not the innovator and is a commodity in 352 - > the business processes, innovation tends to eat them. 353 - >

Speaker 3: Are there any other tools or technologies that you 354 - > think are really exciting that you've loved, that you've seen 355 - > great results from? I know an advisor for a few technology 356 - > companies. How do you think about who you advise and what 357 - > are you excited about from the technology perspective and 358 - > software, even though I know there's maybe some structural 359 - > issues that you have with the ecosystem as a whole? 360 - >

Speaker 1: Yeah. I mean, I help advise Frontline Performance 361 - > Group and Ponte. Both are AI businesses, one through Front 362 - > Desk and Food and Beverage, that's Frontline. And then Ponte 363 - > is for HR and recruiting. And I'm very bullish on both. 364 - > I think I'm also bullish on anyone trying to bring AI in a 365 - > novel way to reimagine how we can run hotels better, more 366 - > efficiently and increase the customer experience. You know, 367 - > to your original question of like other technology or things 368 - > that I use that I think are clever, I ultimately think 369 - > software becomes pretty commoditized. And so I'm a 370 - > Claude co worker heavy user, done some Claude co, but I'm not 371 - > a computer programmer these days. And so it is a curious 372 - > question of, you know, as these systems, these frontier models 373 - > get better, better, better, what eventually happens to software 374 - > in general? I'm also really bullish though on the long term 375 - > benefit for hotels on robotics. 376 - > I do not think we will see a meaningful arbitrage between 377 - > labor and robotics for the next two years in The United States. 378 - > I think you look at China and their first, you know, whereas 379 - > The United States is first mover on venture capital and AgenTek 380 - > technologies, their first mover in robotics. But I do think in 381 - > five to ten years, we're gonna see physical work, which hotels 382 - > have a lot of, be substantially changed by robotics. And I think 383 - > there's some really cool kind of frontier things happening there. 384 - > But it's gonna be a couple years until that's cost effective or 385 - > it's in hotels at scale. 386 - >

Speaker 3: Yeah. Is the biggest one, I guess, housekeeping in 387 - > your opinion? 388 - >

Speaker 1: Well, the largest department in most every hotel 389 - > in the world is housekeeping. So if you just look at it from a 390 - > volume perspective, yes, I think it's housekeeping for sure. I 391 - > think you then throw on laundry, certain engineering facilities. 392 - > And then eventually, I think, like what they're doing in quick 393 - > serve restaurants, you won't have robots in a kitchen, you 394 - > will have the robotic kitchen pre built. So, you know, you go 395 - > to a quick serve restaurant now, all the equipment is built with 396 - > the automation in it. 397 - > It's not like you have a humanoid running a typical gas 398 - > grill. And I think you'll over a period of time, you know, you 399 - > fast forward fifteen, twenty years, the kitchen of the future 400 - > in a restaurant or a hotel will be very purpose built with 401 - > automation. It's almost like when you go to a car 402 - > manufacturing facility. Right? Like, it's all purpose built in. 403 - > That that would definitely happen in the kitchen for sure. 404 - >

Speaker 3: Awesome. Well, Sloan, I appreciate you coming on. I 405 - > know we have so much else to talk about. I'd love to have you 406 - > back at some point. 407 - >

Speaker 1: Yeah. Thanks for having me. 408 - >

Speaker 3: Where can our audience find you? I know you 409 - > have a podcast not done yet and 410 - >

Speaker 1: Yeah. I'll do a shameless plug. Yeah. You can 411 - > find me on Apple, Spotify, YouTube, LinkedIn. It's called 412 - > not done with Sloan Dean. 413 - > Yeah. Check it out or I'm Sloan Dean on LinkedIn. That's how you 414 - > can find me. 415 - >

Speaker 3: Awesome. Well, thanks so much again, Sloan, and great 416 - > to have you. 417 - >

Speaker 1: Hey. Thanks. 418 - >

Speaker 2: That's all for today's episode. Thanks for 419 - > listening to Hotel Tech Insider produced by hoteltechreport.com. 420 - > Our goal with this podcast is to show you how the best in the 421 - > business are leveraging technology to grow their 422 - > properties and outperform the concept by using innovative 423 - > digital tools and strategies. I encourage all of our listeners 424 - > to go try at least one of these strategies or tools that you 425 - > learned from today's episode. Successful digital 426 - > transformation is all about consistent small experiments 427 - > over a long period of time, so don't wait until tomorrow to try 428 - > something new. 429 - > Do you know a hotelier who would be great to feature on this 430 - > show, or do you think that your story would bring a lot of value 431 - > to our audience? Reach out to me directly on LinkedIn by 432 - > searching for Jordan Hollander. For more episodes like this, 433 - > follow Hotel Tech Insider on all major streaming platforms like 434 - > Spotify and Apple Music.