Picking the Right Hotel Operator in a Chaotic Market

Glenn: [00:00:00] Hey, everybody. It’s your hospitality friend Glenn here at the Hunter Investment Conference. I found my buddy Greg Austin over here these days, chief development officer at Hotel Equities. We’ve been talking about, you know, how do you make a good match? Good. You know, love connection between owners and the operators. That’s kind of what you’ve been focused on these.

Greg: [00:00:18] That’s right. That’s really what I do on a daily basis. It’s finding that I like your term. Yeah. You know find the right match. The right owners with us is the right operators, right? We have three divisions. We’re focused service, full service and lifestyle. And not every deal is a good fit for us because we only want to do something if it adds value for the owner.

Glenn: [00:00:37] Yeah. So what does that mean though, what an owner is thinking about? What are they looking for? And let me just preface, preface it for the audience by saying, we know you’re under a lot of cost pressures. Expenses keep rising. It’s getting much harder to push rate. You got a lot of headwinds out there and that’s kind of what you do. You kind of.

Greg: [00:00:54] That’s right.

Glenn: [00:00:54] Get those headwinds going. Get out of here.

Greg: [00:00:57] That’s that’s well said. That’s exactly it. Well and owners don’t need another manager. They don’t need just to change managers to get somebody different in there, they need a partner, right? They need someone who understands everything that you just said. Yeah. You know, cost pressures, headwinds, chaos all over the world. Travels impacted. Psa is not getting paid. Everybody’s like all sorts of things that impact hotels. They need somebody to provide advice. It’s not just about the day to day, right? Not just about oh, you know, I’ve got a great team. We’re going to do this. We’re going to do that. No, it’s like, how do we adjust for this? What’s the long term play. How do we adapt to the chaos. That’s the new normal.

Glenn: [00:01:36] So how do you how do you even deal with this chaos. That’s the new normal because you can’t plan. I was joking around with our with our buddy Bruce Ford the other day. Yeah. It’s like everyone’s gonna be making predictions, but they’re all just making it up. They’re all like, yeah, yeah, I have nothing against you guys making those predictions out there. We’ve never seen a market like this. At least with Covid you could say, hey, no one’s ever coming to your hotel, you know?

Greg: [00:01:58] Well, and that’s just the thing. There’s no book, there’s no manual. There’s no way to look back and say, oh, this is just like X or Y. Like when you go through a financial downturn, we’ve all seen that, right? We all went through recessions and downturns. But then Covid, you’re writing a new book. It’s like you were calling around to each other. What are you doing about this? What are you doing about that? Kind of the same thing here. You need every hotel is only as successful as the leadership on property. Right? So it starts with that general manager having an entrepreneurial mindset that says, well, what am I going to do today, myself and my team, to solve the problems that our guests and our associates are facing? Because it’s not in the manual, it’s not in a brand manual. It’s not in the operations. It’s something different. And it’s like, and you just you flex.

Glenn: [00:02:42] So yeah, I was just at another management company’s event doing some speaking. And they were really focused on trying to empower their people to just make better decisions, right? And giving them the tools in order from which to be able to feel confident in those 100%.

Greg: [00:02:58] Right? And it’s not command and control. It’s not the military. It’s, it’s empowering the people who are impacting you, interacting with and impacting the guests experience, right? Making sure that your team has the ability. I mean, Disney does a great job about it, right? If you if you’re a Disney employee and you were on your break and you were walking around the park and you saw a crying child, you’re empowered to buy ice cream. Like just little things like that, that carry through that someone goes, you know what? I don’t need to go ask my manager or supervisor or whatever what to do here. I’m just going to solve this problem for this guy.

Glenn: [00:03:33] Okay, so now we’re talking culture. Yeah. And that’s really interesting that you would bring that up because one of the things that I hear everybody out there says, we empower our employees, but are you really empowering your employees or have you just convinced yourself that you’re doing that? So to go to your point, yeah, does your employee have the confidence to give away an ice cream cone without being feared that they’re going to get yelled at?

Greg: [00:03:57] You know, we have the answer is let’s hope so that it’s that it’s prevalent everywhere. But we were just meeting with some owners about taking over a hotel where they described exactly that. And they said, well, the, when we chose this manager. They said that, you know, this is how it worked. But the reality is no one in this building wants to make a decision. They’re all afraid to make a decision, right? And so that transfers to not a good not a great experience for the associates or the guests. Yeah, right. I mean, think about your experience here. I don’t want to talk about it about the prior hotel, but this location, which was the first time this conference I’ve been here in the first half, an hour of the day we were set up, we were setting up in our space. Three different people from the hotel came by to check on us, see how are we doing? How’s the temperature? Are the electronics working?

Glenn: [00:04:46] That’s amazing.

Greg: [00:04:47] Yeah.

Glenn: [00:04:48] And I will say that other property, I don’t think anybody came by.

Greg: [00:04:51] No.

Glenn: [00:04:52] For years.

Greg: [00:04:52] Paul. And you would hope that somebody would come by and they usually didn’t. Yeah. And this was literally like, hey, I’m your I’m, this is my name. Here’s what I’m doing. And I come about it. It’s it’s fantastic.

Glenn: [00:05:04] Great. Yeah. This conversation is really interesting to me because I’ve always seen you as a development guy, right? And getting those deals done. But what we’re really talking about here is understanding how the hotel operates in order to be able to connect better with owners in order to get those deals done. So you’re not just coming in from a position of, hey, let’s sign this contract, but you really seem to know the business so well.

Greg: [00:05:26] That’s if you see my gray hair. I mean, I’ve been doing this a long time. I’ve been on every side. I’ve worked for brands. I’ve worked for management companies. I’ve been a lender. I was the CEO of a group in Dubai, so I’ve been an owner. We can come back to that. But the point is, I’ve said it a little, a lot of different seats at the table, so I can put it on my lender hat or my owner hat or my brand hat. But, but more importantly it’s not about, you know, anybody can lower their fees to win a contract, right? It’s more about how do we partner with this owner to deliver more value and a better place to work for associates and a better, a better ownership experience.

Glenn: [00:06:06] So how can you see opportunities at a property that the existing management company overlooks?

Greg: [00:06:12] Yeah, that’s a great question. I have two boys in college and they every time they visit a hotel, they’ll come back and tell me all the things that they didn’t like about it. Right, right. Because they visited them when they were little kids. And I was always pointing out the things that were wrong.

Glenn: [00:06:26] I don’t mean to interrupt you, but I got a plug. Friday night audit. We’re doing March Madness right now with all of the major pet peeves that we can’t stand in hotels. So make sure you follow what’s going on there.

Greg: [00:06:36] That’s so many times it and it’s usually not the physical asset. It’s the operational side of it and the attitude. And I gave the example of the day they, they came by, they checked on us and then they left, right. And they’re not hovering and they’re not obtrusive, but they’re also checking on you. And so it’s just the little things. And there was another conference recently also don’t want to talk bad about that one. Yeah. Fair enough. But there’s such sticklers about like scanning your badge that just going in to get your badge right, you know? Exactly. I know exactly what you’re talking about. Exactly. And you’re like, oh, wait, look, I paid a lot of money to be here. I just want to walk over there and get my badge and, and you’re not being very hospitable. And it’s just it’s usually operational, not visible.

Glenn: [00:07:21] I agree, and I feel like we’ve lost our way in a lot of places, but we’ve also doing better in a lot of places. Anyway, I don’t want this to turn into a negative Nelly kind of situation, because I do think folks in the hospitality industry are absolutely amazing. But that being said, I think it’s important that we always take a check on ourselves and make sure we are doing the right thing to move forward.

Greg: [00:07:40] And in my career, have also worked in multifamily and other types of real estate. And it’s not to say the hospitality industry that people are the best, it is the best business. And people are if you have a service based heart, if you are hospitable at heart, then it comes through. If you enjoy what you’re doing, you can. It comes through. Yeah. And so we are doing things better. That’s true for.

Glenn: [00:08:03] Sure. One of the best days of my life is the day I realized I was in this business and what it really was, right?

Greg: [00:08:08] Yeah, yeah.

Glenn: [00:08:10] Yeah. I used to work in a little little Glen fach back before I started in hospitality. 30 years ago, I wrote in music and entertainment and celebrities slept and this was the 90s and they suck back then.

Greg: [00:08:22] So what would you have done that I would have heard up for?

Glenn: [00:08:25] Like no, just like writing for a Long Island magazine. I was just out of college. Like, I didn’t have any.

Greg: [00:08:30] I didn’t write any musicals. No, no, I.

Glenn: [00:08:32] Know that kind.

Greg: [00:08:33] Of. No, you didn’t do that. No, no.

Glenn: [00:08:35] No, I did not. Do you. I might have done cats because I am that talented.

Greg: [00:08:38] Well, let’s start the let’s start that rumor right here. Right here on your show. Zero cats. That was you.

Glenn: [00:08:44] Yeah. Thank you. Oh, wait for my sequel coming out in 2028. Puppies. I’m looking forward to that one. All right. Back to you.

Greg: [00:08:52] Yeah, that’s another thing that’s.

Glenn: [00:08:53] Not about me. This is about you. We’ve got a couple more minutes before that’s going to get too long for the upload. But you know what I just realized? I’ve always known you as like chief development officer guy. How did you get started in the business? What made you love it?

Greg: [00:09:07] So I did not go to a hotel school. I went to school right down the street here at Georgia Tech. And if you know anything about Georgia Tech, you will know that they do not have a hotel program. So I did not know that I wanted to go into hospitality. I thought I wanted to be an architect, discovered that I wasn’t that creative. Everything I designed looked like something that had already been done. Yep. Became a consultant, did a lot of workouts for multifamily, office, retail, all types of commercial real estate. Ended up doing bankruptcy, reorg of a portfolio of hotels and realized, wow, these have both the operational component and the real estate component. So they were, they were more fun and more exciting. And they also tended to be in more exciting places, right? So as a 20 something year old and they say, oh, we need you to go to Hawaii in California. I was like, yeah, okay. Yeah, I’ll be back in a couple of weeks. Yeah, sure. So I can remember a couple of times in my 20s and we were taking over or doing like a reorg and a repositioning of some resorts out in California. And I remember waking up going, this is the best job ever. Yeah. And with the best people in, in, if you understand like how the a good operational team, a good management team and a brand can take a piece of real estate that’s worth X and make it worth X plus it’s the same piece of real estate. Yeah, you’re just running it better and branding it better.

Glenn: [00:10:28] And let’s fold it back into where we began. Right now, you operators are out there are trying to figure that out because you can’t, like we said, push those rates up. You’ve got to find ways to make people want to spend more money on site willingly. And you’ve got to give them a reason to do that. From focused service through full service in boutiques, there are opportunities. And my guess is this is what you’re saying on the road.

Greg: [00:10:50] That’s what I’m saying, because you don’t have to be a luxury hotel to deliver a luxury guest experience, right? You don’t have to have five people standing around in a uniform waiting to welcome you. Everybody can can be trained that same way to welcome whether you’re focused service or independent. And that’s what makes the difference. Yeah.

Glenn: [00:11:12] If you’re a three star hotel, a four star hotel, you could still give five star service.

Greg: [00:11:16] That’s what I’m trying to say.

Glenn: [00:11:17] Know what you are and be the best thing that you can in your category.

Greg: [00:11:22] I wish I had said that that is well.

Glenn: [00:11:24] Not just of.

Greg: [00:11:24] Your voiceover. Yeah. Know what you are. Be the best editor. Yes.

Glenn: [00:11:30] I think we get with our ratings and stuff in our industry. It gets so confusing. And we, you know, people have to realize that a focused service hotel is very different than the hotel we’re sitting in right now. Right? Versus a resort and just.

Greg: [00:11:43] And, and embrace that difference and recognize, you know, where you are and what your, what your goal is for that day to win the day.

Glenn: [00:11:52] Yeah. If you’re a three star midscale hotel, be proud of it. It’s an amazing property and you can find ways to get people to love it even more than you.

Greg: [00:12:00] Absolutely.

Glenn: [00:12:01] Any final advice?

Greg: [00:12:03] Oh, it’s always fun on your on your screen. Always great. Right? We always have a lot of I don’t think we got the message across.

Glenn: [00:12:10] No, I don’t know. We did at the beginning. But you know, let’s get you let’s get you on a full length show.

Greg: [00:12:14] All right, all right. We’ll do that at some point.

Glenn: [00:12:16] All right. Talk to this guy Greg over here. Do some DLC. Apparently cares about owners, which is a beautiful thing. Me? I’m mixed about. You guys. I don’t know, we’ll see. Just kidding. Love you. Please like, share, subscribe, all of that kind of good stuff. And for myself. Thanks for watching. See you later.

Greg: [00:12:31] Thank you.