How to Develop Profitable Boutique Hotels - Ethan Orley - Managing Partner at Oliver Hospitality

Speaker A: I also learned a lot about, you know, what, what a third party can't do. You know, it's like, wait, this week we're in it, we're in the weeds all day long. I mean, there's only so much a third party group is going to, is going to do, right? They're not going to be there every single day because they tend to be out of state and your manager is, is your first line of defense. So I think I learned some technical skills from, uh, just like, oh, this is how you guys do it, right? But I think we also learned as much about, you know, what we could potentially do better because, you know, we're in it to win it. And I'm dreaming about the hotel at 2 o' clock in the morning and wondering why the other guy isn't. It's not their fault. I mean, it's just the nature of owning an asset and, and managing on behalf of somebody else. There's always going to be that degree. I mean, there's just, there's just no comparison. So, yeah, I think it was a great exercise and I would encourage anybody, you know, to, to, to seek out, you know, third parties to kind of help get you going and then eventually take it over yourself. I think that's a really good way to go.

Speaker B: Ethan. I always like to, uh, get into people's backstory and how you got into the hotel business. Did it come from a desire to be in hospitality? Did it come from the real estate angle? I want to kind of get right to your taproot moment for hospitality.

Speaker A: Well, I'll tell you, Jake, there was, there was a desire early on, I didn't know how to get into the business, but we totally fell into it. I had no background in it, no, no hospitality training, never worked in a hotel. My family had zero connection to the space. But I traveled a lot in my youth and I always associated travel with hotels or at least the idea that if you had a hotel in a destination, you'd have to travel to that destination to, you know, monitor or, you know, hang out or whatever. It would happened to be so in my mind early on, I think even probably in high school, I was like, I was like, I just had a hotel in, you know, New York, Paris, London, wherever. I'd just have to jet around and we just, you know, live this, you know, this glamorous hotel lifestyle or at least justify the ability to travel and write it off. Well, it didn't happen that way. I actually got into real estate, uh, started off in land development which was my family's business. Did not love the business, good way to make money, but did not evoke the passion inside of me. And went to New York, got a graduate, uh, degree at NYU in real estate finance and you know, started off in the, in the apartment space. Actually I lied. I started off in the, the debt purchasing. I was buying distressed debt in real estate and then got into the apartment business. And then it was just uh, kind of a small miracle that we were kind of right post great recession. And my partner at the time, Philip Welker, said, hey, There's a little 28 room hotel for sale in Knoxville, Tennessee. Why don't we buy it? And I go, holy shit, we're going to lose our shirt. What do we know about the hotel business, especially in Knoxville, that, especially at 28 rooms, you know, the whole thing. I was like, what are we doing? What are we doing? He goes, hey, we're buying it for a million dollars. How bad could it be? And that, that in a nutshell is how we got into the hotel business.

Speaker B: So in your earlier real estate days, what turned you off from whether it was multi, whether it was debt, whether it was land development, and why did you want to experience the joy and the pain of hospitality? Like what, what was it about those things that just didn't align with you?

Speaker A: You know, I, I, I, I've always liked operating businesses. You know, I don't think I'm made to just sit behind a computer and, you know, just, and just, you know, whether it's, you know, high finance or legal work or I have to be active, want to pull levers, I want to make small changes. My wife hates this about me, but I, you know, every time I go anywhere, I take notes and I could, I could list off to the general manager, whether it's a restaurant or a hotel or just a service business or a, uh, retail business, I could sit there and just tell them everything that's wrong with their business and they could improve it, you know, if they just followed these, you know, handful of steps. So I like, I like businesses that you can improve upon daily. So that's one element of the hotel business that I, that I perceive that I would like. Right. But I never again, I never worked in the business. And, and the other part of the hotel business, especially the boutique side, which is really where we've called Specialized or an area that we've, we've focused in on is the design. And so I, I really love graphic design, interior, uh, design, photography. I mean, you name it, I Love design. And I always wanted to find a way to merge my business interests with my real estate background with this, with this desire to make the world more beautiful. And that's kind of how I see it. You know, when you pass by an ugly house that was just built, you know, a McManty to go, oh my God, the proportions are all off. Uh, they just done this, this and this. And that is what drives me to do better and to build beautiful properties. So there's that element as well. And then of course the third is the real estate component of hotels, which allows you to you know, get all the benefits of real estate. Right. So you know, you get to, you get to lever it, you can, you can raise money around it, you can build a restaurant. No one ever invests, no one likes to invest in restaurants, but somehow they invest in hotels with restaurants. So you can kind of. That's the loophole that only we know Jake. So we get to have fun in that space. So I think design, real estate and the operational change that you can make daily.

Speaker B: What were the early real estate insights you had that you then realized you could apply those to hospitality and hotels?

Speaker A: I'm not sure if I had that many, but I do think that one of the things that, that we, we figured out early on was that that ended up benefiting us was, was working in secondary and tertiary markets. I lived in New York City for 10 years and I'll, I'll be honest with you Jake, I, I couldn't figure it out. That market is so efficient and so ra. It's so razor thin that you know, you're buying it a five and a half cap, you have to get XYZ tenants out to uh, six to stabilize and then you sell it. Uh, you know, I mean it's just, it's so. The margins are so thin if you, if you screw up. That wasn't attractive to me. I'm a little bit of an old fashioned real estate guy. I just like to buy something where it underwrites on paper and maybe things don't underwrite to 10 caps anymore. I mean that does. That world doesn't exist of our grandparents age where you, you know, somebody used to say, oh yeah, you take a property, you do some stuff and you double your money. I mean like, yeah, those date, that's from like the 1940s. I mean that doesn't happen anymore. The world's too efficient, there's too much money. But I couldn't figure out New York. It's would always worried me. Um, and I like to have a nice cushion. And so I think what I learned was that secondary and tertiary markets were more attractive to me because they allowed, obviously there's less competition. Cap rates were, I don't know, I mean, I'll make a stab at it 200 basis points higher. You could build something people appreciate. You probably had standing longer before the next guy came in and built something bigger, taller, nicer. And so as it turns out, in the US the secondary and tertiary markets have actually in some cases outperformed the bigger markets. Charleston, Savannah, uh, Austin, Nashville. I mean, obviously these markets have all blown up since. But I mean, I'm talking about 15 years ago, you know, compared to, call it LA, Chicago, New York's an anomaly, clearly. So I think we went with our heart and our, uh, comfort level. And actually the market ended up following us. And I think that was just pure luck. But still, clearly it's important to go where you're comfortable. And I would say that's probably the lesson that I've. I've learned.

Speaker B: What gave you comfort in those secondary and tertiary markets to pick, which you haven't been like, the hottest ones, and you just listed some of the hot ones. They're all kind of in the south, but I don't know. Did you ever go think about going to Detroit like that probably hasn't done as well, obviously as Savannah or Charleston. So maybe what, what are some of those differences that you were able to identify early on that landed you in some very competitive markets?

Speaker A: Our thesis 15 years ago was that everyone in the middle of the country wanted what the coast always had. And that's probably been the case for fashion. And yet, uh, it probably goes back forever, but within the. Call it independent boutique space. And Jake, you know this. I mean, you know, you know, you had, you had Joie de Vie and Kimpton on the west coast, and you had Ian Schrager and, you know, Morgan's on the east. And then you had Ace and you had. And so. But nobody had anything in the middle. And so I had spent enough time in New York to know what I liked, realizing that didn't really exist. And so our competitive edge was bringing concepts from the coast to the middle of the country. And where we first started was Knoxville. And the example there was we did this and we did it on the cheap. We did a beautiful job and people were very complimentary, but, boy, we bootstrapped it. The Oliver hotel, which was 28 rooms, we hired an apartment interior renovation team. We picked carpet and wallpaper. We used this really fantastic, um, interior designer. She was. Our first project she did on the cheap for us and we just like threw it together in six months. And, and, and Philip, my partner, said, hey, let's do a uh, little speakeasy. It was 600 square feet, which we're all familiar with. If you live, if you live in the, in the major cities that did not exist. And you know, I think we converted the space. It was actually a sitting room in the lobby. We just walled it off. We looked at the sitting room, walled it off, cost us $30,000. The most expensive item there was the hand printed Japanese wallpaper for five grand and the bank cats were eight grand. I bought all the stainless from a going out of business sale of uh, a, of a restaurant down the street. I actually had six frat guys carry all the equipment for a six pack of beer and free entrance to the bar. We opened and we opened this thing and ah, it took a couple months for it, for the audience to build, but it ended up being super successful. And here we are 14, 15 years, no, 12 years later, it's still very successful because it was a concept that did not exist. A small 600 square foot bar is very hard to build out in a traditional kind of long bowling alley style retail space. And so you end up with these long bars. There's no intimacy. Uh, and so that's one example of bringing concepts in and being successful. And we can go on and on, but we brought in great designers from New York who I still work with until this day. And so what made us comfortable is the fact that there aren't a lot of deep pocketed investors in secondary and tertiary markets. Obviously there are exceptions. I mean there are many exceptions today, but I'm talking about 10, 15 years ago, deep pocket investors who had the taste level that the younger kind of creative class wanted. And then you had the creative class people that had no money so you couldn't buy a hotel because a hotel is a uh, complex financial development project. And so we kind of came in and there was kind of a loophole for us where we kind of came with that, that hat and knew how to do it. And the final thing I'll answer for you is we are working on a project in Detroit. I can't reveal it because I haven't been given the green light by my, my partners up there. But for the last two years we've been working on a project. It's going to be a boutique independent hotel right downtown next to the Opera House. It's going to Be gorgeous. Uh, super cool. And I'm excited for that to get under construction and open up in 2028.

Speaker B: So let's start there. Like, Detroit's been a mixed market and I'm curious to know how do you identify that there's going to be enough demand that the venture is going to be profitable, that, that everything's gonna work. When you're going into a market that may be less obvious, whether it's Detroit or it's Knoxville, like how, how do you now, as an experienced person, figure out what the special ingredients are to get it to work? Cause you can build the coolest, prettiest little hotel. But then how do you know that people are gonna come and it'll become a successful investment basis?

Speaker A: The answer is you don't know, Jake. You don't know if it' but the two best ways to determine success, or it's called three and again, this is obvious, is what's the competitive landscape like? Can you at least compete at the level of the other ones in the market? You might be the only one, which is even better. Does the ADR support the property objectives? And a lot of these deals you're going to market where it's only Hilton Garden Inns and then you have a, uh, independent hotel. But it's really not what you're talking about. It's like it's apples and oranges. And so you have to sit there and go, I think I can get an extra a hundred bucks in adr. I think I can. Because look at this city over here. So we're always talking to our market study groups and saying, hey, you're not going to find what you're looking for here. But look at our, look at what we've done in these cities and then look at what, you know, this person's did in this way. And you know, they can, they can stretch a little bit. And then, and then, and then the next step is a leap of faith. That's, that's the second part and the third part is basis. And so you really never know. And so the best thing to do in real estate is to either buy cheap or build at a, uh, at a price point where if you had to get out, you can get out. And so a lot of our deals tend to be tax credit or incentive based deals. We're either buying the uh, and, or buying the real estate at a price per pound. That is, that feels really good. Like you can buy a historic building for $50 a square foot and then you automatically get federal historic tax Credits, maybe you get state historic tax credits. If your state has that program in South Carolina, you have the abandoned, uh, building credit program, which is on top of those other two. We've been in scenarios where you can get a facade grant and get a city improvement grant. I mean, there's a lot of ways to, to do it to a point. And so we end up trying to get our basis low enough to where there's a comfort level where if all of our levers get pulled, we still don't hit our pro forma, we, uh, can at least get out clean. And I think that is the responsibility of any, call it real estate syndicator when you're raising outside money. And so again, we just look at those three things. You know, Nashville is a town where we have a great, we had, we had a great basis. We sold our property here. Lots of competition. It's really hard to keep up with the Joneses in Nashville. Really hard to keep up with the Joneses in New York City. New York City has a natural, you know, barrier to growth because of, uh, because it's an island. But, you know, Nashville, Atlanta, those are markets where we've seen increased competition and it gets harder and harder. So, you know, if you can't find, uh, a market with a natural, you know, you know, physical or natural barrier to growth, find one that's maybe a little bit off the radar. And then when do many people show up? Maybe it's time to get out. So I think, I hope that answers your question, but that's kind of how I look at it.

Speaker B: Yeah, it does. I mean, if you think about hotels over the past probably 10 years, supply has really been a number one killer of every great hotel business idea. And I was just Chachi be teen the other day. I'm m. Like, how many hotels per capita does Europe have versus the US and you know, I don't know that it was totally accurate, but it's basically three to one is what it was. I mean, US has three, ah, times more hotels per person than Europe, and there is just a ton of, of oversupply. And a lot of that was brought on by the brands. You've kind of done a little bit of both. Can we talk about why you tend to focus maybe more on the independent stuff and what your experience has been like with branded hotels?

Speaker A: Sure. So, you know, I, I, obviously what we run is a business, but, you know, we've all read these, you know, great stories about, you know, if, you know, if you do what you love, you won't you know, work a day in your life. And so I think a lot of that, a lot of that kind of helps us work on our business in a way that's truly attractive. We love what we do. If I could do boutique hotels, I would do those every day of the week. And that's inspiring to me. It's the passion. I don't like to think of it as a passion project because that scares people. We usually base everything in really good financial underwriting and a thesis, but the end of the day it's, it's got to be exciting. And that is what drives us to do hotels, specifically in the boutique independent space, is that excitement. And that's why we primarily look for these kind of, these basis deals now. Every so often we'll find a deal that just wants to grow up and be a branded hotel. You know, not every, every little hotel gets to, gets, uh, to dream big, you know, and sometimes the Brandon ones are super successful for phenomenal. And so I don't mean to dog any brand. Pants are so powerful and trust me, we use them. So I'll give you an example. If we're kind of sub 100 keys in a smaller market, we'll go independent all day long. If we're 150 keys or greater, we'll definitely go soft brand. So we're working on the grand, the former Grand Hotel of Knoxville. It'll, uh, be 192 keys. It's probably getting a little bit, you know, heavy for, uh, for an independent to pull off unless it was an even larger city. And so we'll probably end up with one of the majors as a soft brand. So that's something we'll do. We just did a conversion, uh, of a hotel in Clarksville, Tennessee to a double trip that was, I think it was, I think it was a Ramada back in the 80s. And then it, you know, then it deflagged and became the riverview inn for 25 plus years. It's exactly what you think it is. I mean, it's just, it looks like an old ramada from the 80s. And you know, Clarksville is a great town and, and, and I'd love to do boutique hotel there. The ADR does not support what we would like to build. Um, at least at that scale, this is 155 keys. And so DoubleTree ended up being the perfect brand for that property. People love the Hilton affiliation, uh, they love the points. It gets broad distribution. We have excellent occupancy, and we're very, very happy to partner with Hilton on that. So that was an opportunistic deal. And so we're not afraid to be, you know, we're not, we're not afraid to be kind of good old fashioned real estate folks either. Right. I mean there's there the passion deals and then the deals that sometimes pay the bills, you know, and I don't. And I, and you know, a friend of mine, New York, always says, Ethan, you know, by the time you built your, you know, your, your 10 boutique hotels, you could have built 100 Hampton Inns and probably made a lot more money. It's probably true. But you have to love what you do. And that's not to uh, besmirch anybody that, that builds Hampton Inns. Those are, those are very, very successful businesses. It just, it just doesn't get me up in the morning the way the other properties do. And so we try to do a mix and I'm sure that's probably, you know, the way you look at things as well. And I have one more thing. We just took, we just took on a third party management assignment of the modern hotel in Sarasota, which is a tribute under the Marriott branch. Now we manage both Hilton and Marriott. And I got to tell you, my team has really enjoyed going through the, the training for both of those brands and we've learned so much. They have an incredible program. I mean they're efficient, they've just got incredible technology. And so honestly we draft off that a little bit too. So we learn by understanding our kind of branded competitors in the market. Which is good.

Speaker B: Yeah, I mean, I keep going back and forth with the brands. They have incredible training, they have incredible standards, but there's just so many of them and uh, they are still so powerful. But I think their challenge from an owner's perspective is the supply that they're putting into the system because they're validating maybe hotels that might be too much supply in a certain market or might work for them, but don't work for the owner. So that's kind of where I'm struggling with right now. But I agree with you, in some markets just these soft brand pipelines are so powerful relative to an unknown hotel in that same market.

Speaker A: Yeah, it's just a reality of where we stand and you really can't escape it unless you're just in a true destination worthy city like Charleston. Right. Charleston thrives on these 50 key hotels. And you're going there. And listen, there are people obviously who are going to go spend their points that they've accumulated with Hilton and Marriott. But for the other half the population, they're trying to avoid those. And the whole part of going to Charleston is stay in your favorite little inn that's owned by a family or owned by, maybe it's a uh, conglomerate. But the point is that it feels independent. It is independent in many regards. And so sometimes actually you put a glass ceiling on yourself right by, by associating. So there's, there's definitely, there's an art to it. I don't know if there's a, it's obviously uh, there's a science as well. Our whole thing is if your lender lets you do it and your investors let you do it and you build to a standard where you could quickly, you know, pivot, you know, build it as a independent and you can always call the next day and I swear they will fly down on their jet and they will sign a deal with you the very next day. And so you too can be part of a, ah, brand if, if, if you fall on times that call for them. That's how I look at it.

Speaker B: You're, you're a hundred percent correct. I want to go back to this first hotel you did. What was so, because if you haven't built your own hotel, it's so inspiring if you're creative and you like serving people and setting up experiences. Can you kind of describe those early moments when you knew nothing and you were setting up this business in this hotel?

Speaker A: Yeah, I, I, I, I was living in New York City. I just got married. I had no job except for this, which wasn't producing any income. I rented a desk for $250 a month for my friend Josh Carr, who's an Excel guru in New York, still is great guy. And we had kind of like a, a cowork space, pre co work space. And I was, I, I, I, I, all I know all I knew was I had to support a wife and a, and a kid. Uh, on it, uh, on the way I was like, I'm going to make this 28 room hotel the best thing I can pull off with the funds we had. And I was like okay, property management system. I just went online and typed in pms. You know what, found a handful of. So we found one because previous to that they, I think it was a, they had a paper calendar and a doorbell, I swear to God. And Robin, uh, was the general manager. She sat in this chair at the front desk. It was very old fashioned and so I did that and then I found a company that sold like midi, you know Toothbrush, you know, toothbrushes and mini and midi toothpaste. And then I found a company that sold pillows. And then, you know, you get all these free samples. By the way, I gotta tell you, sometimes I think I build hotels just to get the free pillow sample every so often. It's a lot of fun. Every pillow in the house is a different pillow. So I think we had a lot of fun with just trying stuff and figuring it out. And that's my superpower, is I can hyper focus and I can stay up like 18 hours just looking up stuff online to buy to f, you know, to improve the guest experience. So there was a lot of, lot of passion. Still is passion. Obviously the portfolio has grown and you can't just hyperfocus on one hotel. But I gotta tell you, I mean, I had the most fun I ever had just figuring it out, you know, and seeing how kind of, yeah, cheap you could buy something, you know, you kind of, you know, you know how it is. It's like, you know, but as you get bigger, you don't have the time. So all of a sudden you start paying market price because, but when you're, when you're kind of young and hungry and you have limited funds, you figure out how to bootstrap it. And Knoxville ended up really being the best market for us to get going as a business. It just had all the right elements. And so that's just one example. I mean, I could list a hundred others, but, you know, for anyone who's, who's watching this, you know, I would always recommend, you know, start small. You know, obviously if you have the funding, start big. I mean, because there's only, only so much you can do with a small property. But, but you know, start small. Find a, find a, find a town that has no small hotel or no boutique hotel and be the best thing in town. And uh, and you could probably pull it off and make, make good money if you have a high ADR and a good bar program. I'd uh, say those are, those are your two elements for success.

Speaker B: Can you walk me through now that you've refined your craft and you're really known for the design and the branding, what your process looks like to start a hotel and where the whole design and branding process begins for a new project for you?

Speaker A: This is probably going to scare people, but there's not a whole lot of process. The way we find deals is fairly opportunistic. And so we don't have a hundred million dollar fund with a, uh, single brand saying, okay, you have five years to put out a hundred million dollars, and you picked a eight best cities in the country and go for it. I would like to do that. And Jake, we should talk after this. Maybe we can develop that plan. Because that would be a hell of a lot easier if I just had, uh, uh, money, uh, in the bank and a directive. But unfortunately, our deals end up kind of just coming to us. And we have, you know, we just, we talk to brokers, we talk to friends, we talk to you and we say, hey, we're looking at that. Hey, you should check this thing out. And that's kind of how everything has kind of come to us, is you should check this thing out and, and, or, you know, hey, what's that building on that corner? It's been sitting vacant for a while. We should call on it, find out who owns it. They don't know. Uh, maybe they don't know what, you know. It's an office building. It's been, it's been sold as an office building. We can probably convert it. It's got great bones. Or this deal in Aiken, South Carolina that I'm m. Involved with right now that we hope to close in May. You know, I called a broker in South Carolina, actually, I'll take, I'll step, uh, back one degree. I had a guy called me out of the blue from Spartanburg, said, hey, I've been staying with you at the Oliver for years. I love what you guys do there. Please bring me Oliver to Spartanburg. I'm like, great, show me a deal, you know, show me a piece of property. I'd love to do something with you. Looked and looked. We couldn't find anything, which is fine. But I was like, I was like, we got to be in the Carolinas. I mean, that's where things are happening. So I just, I just, you know, got off my butt. I called the broker at Colliers in Columbia, said, hey, I'm a hotel developer. Just show me deals in South Carolina, anything. This is my box. And so I got a call and they said, hey, we got this deal in Aiken. I go, Aiken, Aiken. Where you go? Aiken, South Carolina. Go. All right. You know, it was a very complex deal. We flew down there, took a look at it, and my first hunt was, oh, my God, it's a small town, you know, complex deal. Are we going to be able to get the rate is this going to pencil? And the more we looked at it, the more we said, wow, this is, this is an incredible town. Number one, two There are actually a lot more. There are a lot more levers in this deal than we anticipated. Meaning between the acquisition price and the layers of incentives that we could implement, you know, we could, you know, if it. So. So my thought was, okay, if we could buy this for X, we can layer this on. If I get to this basis, maybe then I'll do it. And then as you get deeper and you. And you learn and you learn about the people and the opportunity, it just does. Okay. It makes sense. Of course, by the time you get to the end of that underwriting, six months later, your costs have doubled. Because you're always going optimistic, Jake.

Speaker B: You know, welcome to the hotel business.

Speaker A: Your cost double. But the good news is that where you thought your rate and occupancy were going to be, they end up going. They end up being better because we.

Speaker B: We.

Speaker A: We sandbag in our minds. I'm a. I'm like. I'm not a pessimist, but I try to be as much of a realist as possible. I am. I am, Jake. I can. I can kill any deal you throw in front of me. That's, like, my specialty. It's like, I don't know. I don't know. We're gonna lose our shirt. Which is healthy. It's, uh, health. Healthy. Skepticism is important in a relationship, but you need to have your ying to your yang, and you need to have somebody else kind of like, you know, pull it out from you. Otherwise you'd be scared to do anything. And so on that deal, we just, you know, we're super excited by it. And so I guess maybe to come full circle, you know, our process is to just look for markets where we can really stand out. And I pointed that out earlier. We look for markets where they want us, and that town actually wanted us. Turned out years earlier, I found out somebody had actually thrown our name out into the hat, uh, to the mayor, and said, hey, you should really invite this group to go do this deal. And I mean, wow, what a great feeling. I mean, all these years later that your name finally gets out there and people are talking about. I mean, you know, I hope, you know, I think we do a good job, but, you know, I think we really just try to be very opportunistic, let things kind of come up organically. We don't have the pressure of a fund to put dollars out. You know, we just. We just. Just let it kind of come to us and try to do one or two deals a year, and that feels pretty good.

Speaker B: Can you walk us through Your approach to the design of it. So now you found this property in Aiken. How do you know what it's going to be? How do you figure out how to make it cool? How do you figure out how to make it inspiring? Are you going to have a bar? Are you going to have a restaurant? What are the rooms going to look like? What is the story of the hotel? What is your approach there?

Speaker A: So that's the fun part. That, that, Jake, that. That usually is what, you know, that. That's what gets me into the, you know, into the deal. Once, Once the economics gets figured out, then I kind of go whole hog on the design. I just get. I go all in. We have a bench of designers we've worked with for many years. I try to introduce new designers every so often because there's so many talented people out there, and it's. And I love the creatives. I mean, that's just, you know, if. If I could be like, uh, you know, my next life, I want to be an artist in some SoHo loft and like, you know, 1972. I mean, like, that. That'd be fun. And so I like. I like. I like hanging out with the creative folks in the process. And so I. For our boutique deals, it has to have a storyline. And if you can't figure out that storyline within two seconds of looking at that building, it's not going to work. And I don't care if it's modern. It can be built. If it's too modern. Okay, listen. I mean, they're super modern. I mean, there's some incredible 1980s office

Speaker B: building is tough, though.

Speaker A: 1980s is probably a tough year. 1970 is great, right? 80s is tough. I think it's going to have its day. Right? Obviously, there's some interesting brutalist stuff that I think is starting to kind of pop up that could be interesting, but I think it can have a story, a historic story, obviously. Great detail, mold, crown molding, frescoes. It could have, um, whatever. It could also just be super Zen, you know, have a incredible Japanese aesthetic, you know. You know, I would love to do an Amman hotel, you know, and, you know, in Hokkaido, I mean, you know, like, I mean. And that would be fun, too, right? And so it just has to have. It has to have something you can sell as a story. And it can be super clean and it can be super, kind of like, you know, funky. So, you know, the Claremont definitely had the funkiest story of funky stories in Atlanta. And everybody, you know who's listening to this, and if you're from the Southeast. You may have heard of the Claremont, but it's got a storied history. And you know, the funny thing is we weren't the only ones to figure that it had a great story. Alex Calderwood from Ace really wanted to make it an Ace, and, uh, we spoke to Ace and it would have been great. I mean, I love, I love what Ace has done. Still does. Obviously it's evolved, but they broke things out. And I have mad respect for what they do, but they recognize the story. And what it was was a 1940s apartment building, I'm sorry, 1920s apartment building that got converted to a hotel in the 1940s. And for decades, the lounge in the basement transformed from a steakhouse to a Playboy bar to multiple iterations under different names as, as, as different bars. And over time, people were fewer clothes in that space. And up and up until today. And it lives as a call. It, uh, you know, it's a, it's a, it's a, it's a burlesque show in a dive bar and it's beloved by Atlantans, myself included. And it's a lot of fun. And so how do you take a building that's got a past of his, apartment building, high end apartment building that got turned into a hourly hotel that, you know, you know, became, you know, drug infested, prostitution infested with a storied, you know, lounge in the basement that we completely transformed into a, a high end, high design boutique hotel that played homage to its 1920s history and also in 1970s history when it was truly on the wrong side of the tracks. And I don't mean that except for the fact that again, there was a drug and, uh, prostitution problem on that side of town. And so what we did was we try to write a single line that describes what the vision is. The vision here was it was your great grandmother's hotel that got taken over by her punk rock grandkids, spray painted over grandma's, uh, frescoes. And so it's kind of got this layering effect. And we ended up working with Elvin Dyack from Family Brothers, who's an incredible design group out of Atlanta, ended up finding them after a search of around 30 odd graph designers. And Elvin hit it, uh, right in the bullseye. And our, uh, branding really kind of speaks to that juxtaposition and that dichotomy and, and just like this, you know, it's like at one point he drew the picture of a concierge, you know, on a card and then scribbled on top of it as though somebody was like, you know, on some kind of hallucinogenic, you know, kind of, you know, scrolly, scripty writing. And so again, it was this, like, idea that, like, you were going to kind of, like, live this kooky, you know, overnight, you know, lifestyle. We may have played a little bit too hard on that, but that story just, it bellowed out storylines that we couldn't contain ourselves with, what direction to go in. It was actually kind of hard. But I would say we know what the storyline is. Day one. I usually find an interior designer that I know really speaks to that storyline and really kind of understands that, that language. And they have, ah, again, any designer can, any good designer can do just about anything. But everyone has their fallback. Everybody has the thing that they really love. And it's about finding people, whether it's branding groups or interior designers that love that specific language. And then I usually put them together and hopefully make magic.

Speaker B: Do you have the branding group kind of work your story and put that into a visual or a language and then share that with the interior designer? Or is it more collaborative and everyone's kind of starting at the same time? Because your friend Bashar actually once told me that the way that he does it is he has, like, a branding company create the story and like this, like, almost like a book, like a guide, and then you can give that around to your different designers and talk to them and see how they react. And that's what he does, you know,

Speaker A: and, and, and Bashar is way smarter than I am. So, you know, I should probably take Bashar's advice.

Speaker B: He just posts on LinkedIn, but I don't know if he's smarter.

Speaker A: He's great with words. Bashar. Bashar's right. That's what you probably should do. I, I'm probably, I don't know if I'm, I'm, I'm probably. I, I, I try, I try to get the deal underway before I start spending real dollars. Eventually, you hire a group and they do the storybook. But to me, I've gotten my brain. My investor group looks at our, uh, portfolio and goes, the guys eventually get to the right answer, so even if their presentation is not great, they know what they're doing. And I always end up working with designers who get it. I just know they get it. I don't have to know. I know it before they even put it on paper. The paper is just to, like, again, represent it so you can actually, like. But I kind of do that. A little bit later. If I had unlimited funds, of course I would hire the brain group today. I'd have all the pretty stuff. My presentation would look like amazing. I'd have all this pretty graphics and you know, I'd draw it. But I'm just, I try to be very thoughtful, uh, in how I spend on the front side of the project.

Speaker B: Was it intentional for you to set up the management company and do real estate development? Like did you ever think like, oh, we'll just develop the hotel and then I'll find someone else to manage it, or is it always for you? No, no, we have to manage and we have to own it and we have to develop or create it.

Speaker A: Great question. I don't think we knew any different. And when you build a 28 room hotel and you know, maybe different than Jake, you probably, I think you at least have one smaller hotel in your portfolio. It probably has a thousand dollar ADR. If you have $150 ADR, 28 room hotel, who are you going to hire? And so we had to do it ourselves. And I had no income. I was, I was, I got married, I had a kid on the way. I had no income. And so, you know, when you, when you, when you're doing a million dollars of revenue and you take a 3% fee and you have to split it 50, 50, that's $15,000 I didn't have. Yep, truly, I mean that's really what it was. And so we had to be the managers because we needed an income and because who else was going to devote the time and energy to a 28 room hotel the way we were going to? And we could also kind of take fees as we had the money. Right. So that's the other nice thing about managing or a property is when things get tight, you, uh, can stop paying yourself. Doesn't always work the other way around. Although we've been generous under circumstances where we're the third party manager. That doesn't always work to our advantage down the road, but we try to live by our own standards and rules. So we ended up starting in the management business 15 years ago. But, but you'll like this, Jake. We ended up doing two larger deals two years later. Well, we got into them, but by the time we, by the time we actually got them open, it was probably four years later. And Philip turned to me and said, you know, let's not be idiots. Just because we're managing a 28 room, um, hotel doesn't mean we can simultaneously manage 200 key hotels with massive food and beverage operations. We don't have the bench. You know, we have probably more to lose than to gain. And let's do a short term management contract and then take them over down the road. And that's what we did. We ended up doing uh, a short term deal. Think it was a 36 month deal, which I think a lot of management might do. Not all of them, but some of them might. And you can kind of get a, uh, you know, get a, get, you know, stabilize the asset and kind of, you know, just get yourself positioned to know what fees will come in so that you can then kind of equate that back to what your overhead, overhead would be to start hiring internally. And that's what we did. It took a couple years to figure out. And that transition by the way, occurred two months after Covid began. So, so in uh, was it, you know, March or April of 2020? I mean it was, it was, it was a heavy time to transition, uh, to take over all of our properties under, under a central management umbrella. But we did. And so, you know, some days we wake up and go, what are we doing? It's a hard business. Management's tough. You got to get to a certain critical mass to make, to make money on that side of the uh, called that entity. We also talk about how sometimes it takes more effort to manage the manager than just to manage yourself. I respect folks that do not want to manage and just develop. I really have a lot of respect for them. They might be the smarter folks in the room. I have convinced myself like Apple computers, that in order to kind of present the best hardware, you have to, you gotta, you gotta do the software too. And so I think I enjoy having the full control. It does take, I'd uh, say 80% of my time on the management side and we probably end up, you know, at this point, you know, probably making more money on the development side. But at a certain point that will, that will, that will flip. And you know what we've done to rectify that, which a lot of management companies do, is seek out third party management contracts. So over the last several years, actually even before COVID back in 2018, we did our first third party deal. We uh, actually built a hotel on behalf of somebody and managed it for them through stabilization. And so we have three third party contracts today and we're seeking more, we're not advertising, but we're finding them organically as they come to us with properties that just do exactly what we do. Well, I'm probably not the Right. Operator for a 250 room Renaissance or a 300 room Renaissance Hotel, or an airport hotel or, uh, there's a lot of companies that probably could do that, maybe better, cheaper. But if somebody had a, you know, 150 key or less property with heavy food and beverage, heavy lifestyle branding, heavy programming, that's something we'd love to take on. And that's, and that's how I see us kind of growing in the management business. And once you get to call it, you know, 100 million in sales, managed revenue, you know, then I think you really have a real management company and they can stand on its own two feet. But no, we did not, we did not set out to start a management company. It was just, you know, if, if you have a mom and pop restaurant, you know, you run the restaurant, you own the restaurant. I mean, there's no, there's no separation of duties. And that's how, that's how we got started.

Speaker B: I want to go back to when, um, you were making this transition during COVID and maybe try and forget all the COVID stuff. What, what did you start to learn or appreciate kind of seeing the other manager do as compared to what you were doing at the 28 room hotel? And like, how did that make you then think about how you wanted to run and set up your company when you eventually took it over?

Speaker A: Great question. You know, I think it seems obvious to us today, but at the time I didn't understand, you know, how to structure, you know, uh, uh, you know, how to price out revenue management and how to price out sales and marketing from a corporate allocation perspective. You know, what the delivery of a monthly operating document might look like for an ownership group. I also learned a lot about what a third party can't do. It's like, wait, we're in the weeds all day long. I mean, there's only so much a third party group is going to do, right? They're not going to be there every single day because they tend to be out of state and your manager is your first line of defense. So I think I learned some technical skills from uh, just like, oh, this is how you guys do it, right? But I think we also learned as much about, you know, what we could potentially do better because, you know, we're in it to win it. And I'm dreaming about the hotel at 2 o' clock in the morning and wondering why the other guy isn't. And it's not their fault. I mean, it's just the nature of owning an asset and managing on behalf of somebody else. There's always gonna be that degree. I mean, there's just, there's just no comparison. So, yeah, I think it was a great exercise and I would encourage anybody, you know, to, to, to seek out, you know, third parties to kind of help get you going and then eventually take it over yourself. I think that's a really good way to go.

Speaker B: Uh, it's great advice. I've actually never heard of anyone do it. And you know, we've actually, because we've always managed our hotels and you know, we, that hundred million dollar mark is a real thing. But we have hired people from other companies. Like maybe I, uh, interned for another company. But it's hard to like, see what other people are doing. So in some instances we've actually brought in, you know, not maybe management companies, but like kind of asset management companies that, you know, see how other management companies operate. And maybe we have them consult on a specific area of the hotel or we bring in a revenue company to look at this, or maybe a sales company to look at this. And that's been helpful for us to get perspectives of like, what else is going on in the world, like, other than just what you get from conferences and knowing people in the industry and learning from your colleagues.

Speaker A: Yeah. You know, actually, you know, you and I spoke a year ago, year and a half ago. I remember I took the calls in New York City and I was asking you about third party accounting.

Speaker B: Yep.

Speaker A: And we've, we have great people in our company and they, and they work their tails off. And we've always had some, you know, some issues with just getting the right flow and accounting. And a lot of that has to do with the fact that like, we're trying to, we're trying to be as efficient as possible. When you have a 28 room hotel, can you really afford an AP clerk? So we had one. We didn't have one. We had one. And it's like, it's like, it's like, uh, it's crazy because you're like, well, no, everything is automated now. You just, you just scan and send it in. I mean, back in the day you said FedEx stuff. I mean, uh, can you imagine, Jake, how they used to have, how they used to do it? Well, they used to have, but now

Speaker B: you always get papers. Like hotels are living in. Like, I mean, we did even, like, we just did this new thing where like the night audit is now all digitized like maybe two years ago. But when like my team was selling me on this idea, they're like, oh yeah, we have like boxes and boxes of papers that we saved for years of like the night audit reports. I'm like, what do you mean? Like where is that? Like I sent back office. I'm like, why would we ever do that?

Speaker A: Yeah, so we've been looking. So, so, so again we're, we, we, we've tried to kind of like game the system to figure out the best, most efficient way to do it and everyone's got a different approach and you uh, and you know that firsthand. But one, one thing that we've, we've done, just done is we've actually gone third party with accounting. We have or have our own in house accounting team. Some, some of the work we've done now, now sits with that uh, with a third party team in Texas. And what they've done actually to your earlier point is, is they worked with so many different hotel groups that they're telling us how to improve our internal SOPs. And so we've actually turned the tables and now they're telling our head of ops like, hey, this is what to expect from your gm. If your GM can't do that, they need to get out. Whereas before we're like, well, you know, GM surely be front of the house managing, you know, guests. They should, they're not accountants. And then I'm like, uh, are they accountants? Are they not accountants? Do you hire for the accounting degree? Do you not? I mean it's like, and it's crazy because half the time they don't have that capability. That's just not what they're good at. And honestly I don't want them spending time doing that until, until we save, until we need them to save the money by not having the actual, the extra fte. And so the best thing you can do is like you said, you hire a third party group to tell you how other people are doing it. And unfortunately you don't get that from a conference. You can listen to someone all day long, but unless you're actually in the weeds and actually see your stuff, it's all just, you know, whatever, it's optimistic, it feels good. You take it back to your company and they're like, okay, well what do we do with that? See, so I'm a big believer in bringing third parties in, but caveat empor. There are plenty of third party consultants who have added very little to our company. Yeah, we've had a lot of money, so do it based on, uh, a great reference, Jack. And I can, you know, I can, I can shed Light. If you call me.

Speaker B: Yeah, that's, that's some, that's some really good advice. We looked at going third party accounting. We ended up just building an amazing accounting team. But then our real estate side is third party accounting. So we get kind of the benefit in a different way where all the real estate stuff is a third party accounting. They see a bunch of other hotels and can communicate with our ops team if they, you know, want something in different way or thinks something should be done a different way. But you got to be humble and, and do it. Other people have answers. People have big egos in real estate, but sometimes you got to get advice from others. That's, that's a big takeaway of mine. I want to talk about food and beverage, because that's another one where it's very challenging and people often resort to third parties.

Speaker A: Yeah.

Speaker B: Their demise or their to, to their success. But you have. Food and beverage is a big part of your culture and your company. So I, uh, want to maybe start from the first 28 room little speakeasy and kind of how FNB evolved in your company to be where it is today.

Speaker A: The. You hit the heart and the nerve at the same time. F and B is the heart of any great hotel property. We all know that a great restaurant and a great hotel makes it an extraordinary hotel. And I've, I've eaten some great restaurants. So have you, Jake. And there's just nothing like the experience. And we always want to do that. Uh, we're not the best restaurant. We're going to have the, you know, best service, best food. We really want it to be successful. It's not always a slam dunk. It's so hard. And even when it's good, the next year, you know, the next Joe opens up a restaurant, it's like, uh, what do I need to do? And then the margins are thin. And so the whole thing is kind of, it's, it's, it's kooky. The great thing about, uh, hotel though, is that the, the rooms tend to make most of the money. And, and so thank God, Jake, we're in the hotel business and not necessarily only in the restaurant business.

Speaker B: Yes.

Speaker A: And there are plenty of restaurants that make a ton of money. But the fine dining, which is what we end up doing, and I don't mean white tablecloth, but when you have an entree that's, you know, $30, it's, it's fine dining. I don't, uh, you call whatever you want, but, you know, you're definitely. It's hard to present yourself as a restaurant that, you know, that's. That's an everyday restaurant. We try, and we always end up going a little bit more. Fine dining by default. So we. We got our start in the restaurant business with the Oliver Hotel in Knoxville. Actually, the first restaurant we opened was Tupelo Honey, which was a restaurant inside the hotel only associated through a partnership. Uh, we became an owner, a partial owner of it, and they. They leased from us. And for a short period of time, we ran food service from the restaura. But then the other restaurant that was actually a tenant in the hotel prior to our takeover went out of business. And we had two choices. We could lease it out, or we could operate ourselves. And we tried really hard to lease it out. Uh, and all the proposals that came back, I was like, this is not going to work. It was like, fast, casual. It was like. It was like Cava or Chipotle, but like this. I mean, it did. It. It was. It didn't look right, didn't feel right. It kind of gave me that, you know. Yep, the ickies. I was like, no, no, no. We spent too much time with this hotel. And so we convinced ourselves that we would raise a separate SPV from our current investors to open up a restaurant. I think we raised $250,000. It was a $700,000 build out, which sounds crazy today. And I had to convince all of our investors. I was like, yes, it's in the hotel. We actually paid rent to ourselves. I don't know why, uh, we did that kind of because we had this crazy idea of keeping the entity separate for liability. And it was going to be this whole, like, the restaurant's going to stand on its own two feet. It's going to pay rent.

Speaker B: No, you can't do that.

Speaker A: You can feed off of the hotel. We needed to cheat off the toe. Well, we eventually had to teat off the toe, but we said, okay, let's find a great designer. I ended up working with Oliver Hasselgrave from home out in Greenpoint. He's moved since. And I called up Oliver. I'd seen his name in a magazine back in the day. He was kind of like one of the godfathers of, you know, Brooklyn white subway tile, you know, you know, he's kind of. He kind of was part of that Edison light bulb and white subway tile, you know, era. And Oliver's great. And he said, I've never done a project outside New York City, but my name is Oliver. And your hotel is called the Oliver And I will do it for you. I said, great. And he ended m up coming down. And we built this gorgeous restaurant called Royale. And when we opened, everyone was like, oh, my God, this is really nice, maybe too nice. And, you know, you don't want to, you don't come across as a special occasion restaurant. That's like a definition.

Speaker B: I've been there.

Speaker A: Like, oh, no, we're not, no, we're, we're a twice a week restaurant. Not, Not a once, once, once a year Valentine's restaurant. And it freaked me out. And, you know, we didn't know what we were doing. We had, I think we had, we had two choices for chefs. We had a guy that, you know, cooked at a local restaurant, a guy that cooked in a, at a country club. It just, it wasn't, it wasn't my dream. But we ended up working with one of the two chefs. We did a cook off, by the way. We used the conference center kitchen at the local conference center and at a cook off a la, uh, you know, Top Chef, and selected this one individual who turned out to be actually an excellent chef and ended up just finding a general manager who was an assistant general manager somewhere else. And I thought, you know, hey, everyone, everyone deserves a chance in life. I've learned a lesson, uh, since then. A few times, uh, the restaurant didn't do very well. And Jake, we, I think we were down, we were down to the last $10,000 in the bank to cover $15,000 of payroll. Three days later, I'm like, should have followed my father's advice and not getting the restaurant business, it was tough. And of course we, we, we made payroll and we found a woman who took over as GM and she whipped that restaurant in shape. And within six months, we were profitable. Uh, and she grew sales like 20% every year. And that thing's been a rocket ship restaurant for the last decade. And what I learned from that experience is you gotta have some luck. And sometimes the market has to catch up to what you're promoting and what your product is. But it's all about the people. And if you have a rockstar gm, um, anything is possible. And she, she got us to a point where that thing was really making money and it could definitely pay rent. By that time, we actually merged the two entities because this is ridiculous, having two sets of financials and two separate tax returns. And, but that was our foray into restaurants. And, you know, we've done restaurants ever since. They're still tough. I still don't know the right, you Know the secret to them? We, you know, we hire great designers, great chefs, great managers. Sometimes they're very successful early on. Sometimes they take a couple years. There are a lot of ways. And maybe for a separate conversation, we could talk about lease arrangements, third party arrangements, you know, intellectual property, you know, royalty, naming. Right. Relationships. I'll, uh, like, um, maybe not Jean Georges, but like, uh, you know, there are other people. You can just kind of wreck the name scenarios. And I've looked at all them. And so we, we are constantly trying to figure out what the best path is so that the restaurant isn't, is, is an accretive outlet to the overall program and not a distraction and not a bleed. But it's, it's, it's a tough part of the business, but it's, it's a necessary, It's a necessary, it's. I uh, won't call it an evil because it's literally the heart and soul, but it's, it's uh, uh, you just have to live with it. It is part of the, of, of the operating business.

Speaker B: It's very hard. We've been everywhere you've been and done many of the same things. There's no perfect structure, is what we found. Sometimes it makes sense to do it yourself, sometimes maybe lease it, sometimes maybe partner with someone. But it is not a business that I want to do on its own. But like the White Barn Inn that we bought in Maine, like the hotel generates all this revenue because the restaurant, the notoriety that the restaurant has, so you can't just cut that off and that restaurant actually makes money. But if you get it right, it's exactly what will happen. You will turn a great hotel and a great restaurant into an exceptional property and experience. But it's so hard to do. Although New York, making it easy, I don't understand like every corner in New York and every street, it's like amazing restaurants. Good restaurant in Fort Lauderdale, like New York has like 20 on this one block. I don't understand.

Speaker A: I know sometimes you're like, you walk in, you're like, you're like. If I just transport everything about this into my space, it would be the best restaurant in town.

Speaker B: 10 billion people on each block. So it's just endless demand. I think that's a unique advantage they have.

Speaker A: Captivating. But we, we, we, we, we love, we love the people in the F and B space. They're, they are the hardest. And I'll tell you one thing, another thing I've learned over time is I would always rather hire somebody From F and B to work in a hotel than hotel to work at F and B. They know hard work. Everybody does. I don't mean to, uh, uh, I think you know what I'm saying here. We've been very successful in bringing people from the F and B world to manage hotels.

Speaker B: Yeah, they're like, oh, I don't have to clean up at 2am this is great.

Speaker A: Yeah.

Speaker B: What about programming and design? Because you have a couple hotels under construction in planning that you're building, that you're renovating. What are kind of the key things that you are thinking about now as like non negotiables? Whether it's in the lobby, in the guest rooms, what are you thinking about as, uh, a fundamental basis you have to have this.

Speaker A: So I think obviously the health and wellness theme is alive and well. And if you're a large enough property or you have the flexibility in space planning, adding some kind of spa amenity is a no brainer. And it could just be a, uh, room with a shower, a cold plunge and a infrared sauna. Right. It could just be something as simple as that. Obviously the greatest risk in the spa game is your full time employee, is your labor cost. I'll pause there for a second. I thought a non negotiable a decade ago was to do a barista in the lobby of our hotel.

Speaker B: Well, I think we all did, by the way. Do you or no. Or you're. You moved off?

Speaker A: No, no, no, I love it, I love it. But, but, but I'll get to my punchline here. It was, it was costing us $250,000 a year to run it. And we only taken $170,000 of gross receipts. And so like, it was the coolest coffee shop that made no money. And it happened to us twice. And so it can be great, but gosh, you know, that automatic machine just, you know, it may not make a ton of money, but at least it's in the black. So I think, you know, and maybe it's evolved to the moxie model where you've got, you know, the front desk associate also pouring you a cup of coffee or giving you a drink. I mean, it's all about the labor, labor, labor, labor, labor. So I thought that was non negotiable. I'd still like to do it because I think it creates the ambiance, the atmosphere, but maybe start integrated back into the, into the bar program. Because every single hotel on the block has got a coffee shop now. Uh, I think the game's over. I was also against doing coffee in the rooms because I thought I would force people to go down to the lobby and get that fresh. Well, I mean, uh, you know, again, as one of my colleagues likes to say, Ethan, stop building the hotel for yourself. You're not, you're not the average Joe. The average Joe wants to watch a sports game somewhere in the hotel and, and, and, and his, and his wife probably wants to get a cup of coffee before she goes downstairs. So now I do coffee in the rooms. But something we've started to integrate is a amenity station on each floor. It's such an easy thing to do and such a nice perk when you get off the elevator. Somewhere around you there's uh, a, there's a small little, you know, cutout with a, maybe a fridge, a freezer, sparkling water, maybe a coffee station, maybe a bowl full of candy. Something that's a little bit of a surprise and delight if you, if you design it into your plans early on. It's really not a big cost. It's super easy to do. A lot of the, a lot of the, you know, a lot of the hotels I started to see now are doing it and then you can offer complimentary M snacks there. It doesn't cost you very much money. So I'd say spa wellness, even, even in kind of a uh, self service scenario would be great if it's, if, if, if you have enough of a key counter of enough external demand from the public, you could afford to have somebody stand at the front, be at the, at the front desk and then you can offer even more, more spa like amenities. But I think that's a really nice perk and we're doing that in both Knoxville and Aiken and it could be, and if you want to go crazier, we, you know, we've talked about doing, you know, wet saunas, you know, dry saunas, plunge pools. I mean you can get, you can kind of get crazy. But that's kind of the, that's kind of the theme of the, of, of the moment. I don't know how long that's going to last. I hope it's not like ax throwing because it's a pretty expensive investment. But I think, I think those are both non negotiable and you know, obviously we can go into bathrooms and you know, it's, it's, we're way past the time of, of just doing, you know, tub showers. Obviously we only do showers now and trying to think of what else we do in the rooms. Obviously the desks have become smaller Smaller people just work in beds. We try to invest a lot into quality of the sheets, quality of the pillows. I'm a huge believer in doing two hypoallergenic pillows and two beautiful down pillows. I don't always follow my own advice. Sometimes my advice gets swallowed up by whoever's running the hotel at the time. And so I come back and I'm like, that's not what I thought we ordered. But I'm a big believer in, uh, a really great bed experience and sleep experience. So I think that's. That Those are probably the two that come to mind.

Speaker B: It's amazing. Ethan, I asked all the guests on the podcast the same closing question. What is your favorite hotel outside of your portfolio? Oh.

Speaker A: Oh, gosh. I knew you were gonna ask this question. What's my favorite hotel? I don't know. I usually make my wife sleep in Airbnbs. Two, three kids. Well, uh, I'll answer with this. My favorite hospitality experience is probably not what you expect. It's sleeping in a thatched roof, mud facade hut in East Africa. I. I love the safari experience. I love. I love the glamping experience. If it's. If done right. If done right, I've done it where it's 20 degrees out and the dog is frozen and doesn't move, and I will not do that again. If you don't feed the fire two in the morning, you freeze, you still pay the $450 a night. I will not do that. At that price point, you should feed my fire. But I love waking up and having no windows and, and watching wildlife. That, that is. That. That. That to me is. Is a great lifestyle experience hotel. That, to me trumps, you know, fine Italian sheets, you know, just having the dry air and, you know, hot chai and going on a walk in safari. That, that, that. That's the epitome of. Of.

Speaker B: Thanks for coming on the podcast. This was a lot of fun, and I'll probably invite you back again if you're willing. And we gotta keep sharing more stories.

Speaker A: Jake, it's been a pleasure. Thanks for having me. Appreciate you.

Speaker B: Hey, everyone, it's Jake here. Thanks again for joining me on this conversation. Be sure to subscribe on Apple podcast, Spotify or YouTube. Lastly, don't forget to follow me on Twitter. I'll see you in the next episode.

Speaker A: Jake Wurzak is the founder and CEO of Dove Hill Capital Management. All opinions expressed by Jake and his guests are solely their own and do not reflect the opinions of Dove Hill Capital Management. This podcast is for informational purposes only and does not reflect or represent real estate, financial or investment advice.