Hotel Owners Facing Tough Choice: PIP, Sell, or Switch Management

Glenn: [00:00:00] All right. Hey, everybody. It’s your hospitality friend Glenn here in New York City where I’m attending the NYU IHIF conference. But forget about them for a little while because I’m over at the Hotel Edison, where I got our new friend, Scott Geres over here, who is the general manager over here. Of course, we all knew Ben Perlmuter over here, CEO of Remington Hospitality. How are you guys doing today? Doing great. So do you stay in New York City? So apparently you guys go back. You’ve been friends for a little while, but do you see 30 years, if that’s a little while. So you don’t feel dirty staying in someone else’s hotel? I feel filthy stains. Well, no.

Ben: [00:00:39] We went to we actually went to hotel school together. Did you? Back in the early 90s.

Glenn: [00:00:42] That’s pretty that’s pretty cool. So all right, so then in that vein, what made you want to go down this track to run cool hotels like the Edison here in New York City? And what made you want to go down more of that, like management executive kind of track? Scott.

Ben: [00:00:56] You want to go first?

Glenn: [00:00:57] I love being.

Scott: [00:00:58] In the heart of it all. Yeah. Thanks again for having me. Wait, hold on one second. Let me let me give this to you. Well, thanks again for having me and love being in the heart of it. All right, here in the middle of New York City and Times Square. So thanks for hosting us here at the Edison. Yep. And love the action.

Glenn: [00:01:16] Yeah. So why did you want to go into like a, into like magic properties as opposed to the property level stuff? What do you love about this?

Scott: [00:01:24] I love the hotel operation. I love being hands on. I love being with the guests, love managing the staff.

Glenn: [00:01:30] So excellent. And this hotel, you should know, is right in the heart of Times Square. So it’s in one of the most incredible locations in the world. Yes it is. What is it like every single day knowing that it’s going to be completely different and the energy that never, ever goes away?

Scott: [00:01:47] Well, you said it every day is completely different here in Times Square. And you know, the energy is always so positive, so upbeat, you know, so, so exciting.

Glenn: [00:01:57] That’s awesome. And Ben, how are you? We haven’t spoken since your event. And I should say it’s part of our assassination series.

Ben: [00:02:03] Oh, come on.

Glenn: [00:02:04] The last time we did an interview, we were together. Where? Where Kennedy stayed the night before and we’re now we’re in the hallway where The Godfather was filmed and someone was taken out. Right.

Scott: [00:02:15] This is where Luca Brasi went to sleep with the fishes.

Glenn: [00:02:20] Hopefully this interview will go.

Ben: [00:02:22] I think this.

Glenn: [00:02:22] Will be better than.

Ben: [00:02:23] That. This will be the last one where somebody gets assassinated. And I do together here.

Glenn: [00:02:27] I don’t know, we’ll see. I might try to assassinate your character with.

Ben: [00:02:29] The.

Glenn: [00:02:29] Next question. We never know. So we’re here at the NYU conference, right? You’re probably pretty busy with folks from over here. How are you feeling about the general state of things and like the third party management?

Ben: [00:02:40] I’ll tell you, it’s definitely better than it’s been over the last few years. There’s finally some horse trading going on. And so we’re seeing I’m seeing more activity right now in the on the deal side of things than I have in the last 4 or 5 conferences. That doesn’t mean things are completely back to normal, but but certainly very positive.

Glenn: [00:03:00] All right. So I don’t think things are back to normal, but one of the things that I have been hearing at this event and in other places is that sellers are, in a lot of cases, becoming more motivated to sell, which is kind of pushing things forward. Is that what you’re hearing?

Ben: [00:03:14] Yeah. Look, the the properties are beyond the end of their life cycle in many cases. They’re under pressure from the brands to pip them, and they’re at the point where they either hold, reinvest the capital in the asset or sell. And then a new buyer comes in and puts the necessary capital in and and onward goes the cycle.

Glenn: [00:03:33] And I’m going to guess, logically speaking, that a lot of properties change management companies, and you’re probably in a good position to pick up a lot of properties.

Ben: [00:03:40] We we’ve done well, you know, first having really announced this much. But look, the first four months, we’ve done about 17 new third party deals. That’s a big number. Now we’re also managing on behalf of some of the rights and rights are selling assets as well. So there’s a little bit of a balance there. But our, our current state and our future state is predominantly third party operations.

Glenn: [00:04:03] Now you’re stuck here in New York, but you guys are expanding a lot in the Caribbean as well. Caribbean, Latin.

Ben: [00:04:08] America. We just opened a property for a third party owner in Grand Cayman. It’s called one GT luxury property right in the heart of Georgetown. Beautiful, beautiful, beautiful property. Now we’ve got stuff going on in Peru. Belize? The doctor. Wow. Panama. Mexico. Those are some of the areas we’re concentrating in, but pretty, pretty decent sized pipeline in those areas specifically.

Glenn: [00:04:31] What’s it like trying to go into markets that you hadn’t been to previously?

Ben: [00:04:36] It’s not.

Glenn: [00:04:36] Easy.

Ben: [00:04:36] Yeah, it’s not easy, but you have to have the pedigree. You’ve got to have the infrastructure in order to do that. And you learn a little bit more by going into some of these countries. You learn the hard way, but then you learn what not to do on the next one. And, you know, some of the laws are unique, the currencies, the, you know, all the, all the things that we take for granted here being turnkey become complicated there. But it takes takes a bit of a of an experience.

Glenn: [00:05:02] Like Belize, which is actually pegged to the dollar and stuff like that. So maybe.

Ben: [00:05:05] Don’t ask me any trick questions here, but.

Glenn: [00:05:07] You know, I’m gonna ask I’m gonna ask him a trick question now. Scott. What, you know, how are how are people staying here? How are people thinking about New York City? What’s the overall vibe among customers here in New York over the last couple of years?

Scott: [00:05:20] Yeah, well, over the last couple of years. It’s been great. Last year was phenomenal. This year we had a great first quarter. We did see a little dip in international travel as everybody did. But right now there’s a lot of high hopes for what’s in the couple months to come. So we have the World Cup coming. You know, we have Americas 250th anniversary. So June and July look great. A lot of positive outcome.

Glenn: [00:05:44] Good. Well, I hope it goes really well. I’m going to be in my backyard for most of those.

Ben: [00:05:49] It’s hard to get a room here, I’ll tell you that really hard. I got a guy though.

Glenn: [00:05:52] I know. Listen, I wish I knew this guy ahead of time because I’m doing a day trip here to New York today as opposed to staying over overnight, but.

Scott: [00:06:00] Well, now you know.

Glenn: [00:06:00] Now now I know, but what are you. What are you gonna do? Anything else that I should know? No.

Ben: [00:06:05] No, no, it’s all good.

Glenn: [00:06:07] How are you feeling about the summer?

Ben: [00:06:08] Summer’s good. I mean, look, the second quarter right now, we’re on fire in terms of our growth over last year. It’s all ADR driven. And so there’s still a lot of pressure on costs. But we seem to be covering that with growth in rate. And so rev par has been exceeding expectations all year. We see that certainly through the rest of the second quarter and third quarter. And pace looks good, both from a group perspective and a rate perspective. Summers baked with leisure travel.

Glenn: [00:06:35] That’s great. I mean, I don’t know what to say. You know me, I’ve been kind of negative about the whole thing, but man, things just seem to be rocking.

Ben: [00:06:42] I mean, it’s not peachy and rosy, but no, it can’t complain, can’t complain. It never can’t complain better than what we thought this year. Better than we thought.

Glenn: [00:06:49] And we all got through 2020. So no matter what ever happens it will not be that difficult. Right? That’s the one thing I learned. What’s your favorite thing about being a general manager here?

Ben: [00:07:01] Besides seeing me every quarter?

Scott: [00:07:03] Yeah, being able to see Ben every single quarter.

Glenn: [00:07:06] Who who was in the fraternity first?

Ben: [00:07:08] Oh.

Scott: [00:07:09] I was able to watch Glenn.

Glenn: [00:07:12] Glenn.

Scott: [00:07:12] Glenn.

Ben: [00:07:13] Glenn. Glenn. Some things are not meant to be for no vacancy.

Glenn: [00:07:16] Okay.

Ben: [00:07:17] To be continued.

Glenn: [00:07:18] Continued on Friday night. Audit at a later date. Glenn, we got Ben, we got Scott. We got an awesome mural, and we got some guys sleeping with the fishes over here to see you all later. Forget about it. By.