GMH Hotels: The Metric That Broke Hotel Strategy

0:25Good morning. Good morning, Sarah. Good to see you. Good to see you too.

0:34Sarah Dandashy: Man, how have you been, sir? I've been good. I've got more sleep this week for listeners and viewers. You know, last week I got a puppy. The puppy has been trained pretty good lately, so I don't look as sleepy this week. Okay. But I'm still reporting live from my living room because we gotta be on this every two hours on this crate training. So yeah, we're almost there for all those puppy owners but been a busy week also at work a lot going on so i'm excited to share some updates soon on linkedin so if you're not following me there make sure to follow me there about our project we've been working on by uh for now almost three years we're finally making moves so excited to share all that that's exciting very cool very very cool man i wish i had more exciting stuff to tell you but i've just been bouncing around you've been all over and we got Kay saying hello.

1:29Good morning, Kay. Always a big family.

1:32Sarah Dandashy: Good morning. Oh, where's she? Oh, there she is. Oh, there she is. Hi, Kay. Hi, Kay. I'm kidding. She's not here. And I got to say also, too, yesterday was the hottest recorded day in Miami history, hitting 100, the actual temperature of 100 for only the second time in recorded history here in Miami. Wait, it's never hit 100 degrees at all? You get a lot of feels like 100 with the humidity and all of that Yeah. But no, that was the first time or the second time ever in recorded Miami history that it hit triple digits this time of year. So and you could feel it today. And I'm cheering for a half marathon as well.

2:09And that was painful yesterday to do.

2:11Sarah Dandashy: Oh, miles. That was painful. Let me tell you about 100 degrees. Well, it's a different 100 degrees in the desert. It's dry heat. You don't feel it. lies lies oh my gosh well i mean los angeles hits a hundred not often but it definitely can hit a hundred here and there and then um at las vegas was like 110 for like six weeks straight phoenix is 120 i don't know how people are handling that how do you handle 120 degrees I don't know. Stay inside all the time. And now as a pet owner, a dog owner, I'm like figuring out, do I need to get the dog some little shoes? What do we got to do here before they go wandering out on the hot asphalt and sidewalk?

3:02Sarah Dandashy: Okay, I'll take some advice. Oh, oh. Kay has lots of advice. So she'll definitely try. It's good things. Everyone's back to school. It's a little slower now for travel. I know everyone's getting back in the swing of things as school starts. You know, people's summer vacations are wrapping up. Yeah. You know, there's still a lot going on in the world of hospitality. There is. There's always stuff going on in the world of hospitality. But you know, Sarah, this episode, this episode. Tell me. It's brought to you by StayFi. Okay. StayFi helps short-term rental operators build direct guest relationships, do branded Wi-Fi portals, email marketing, and guest data tools that turn one-time bookers into repeat guests.

3:50So start growing your direct booking revenue today at stayfi.com backslash goodmorninghospitality. And that's stayfi.com backslash goodmorninghospitality. And we've got Lou. Lou always giving us the weather in Charleston, South Carolina, one of my favorite cities I need to get back to. 117 is the feels like today. Yeah, that's what it says. It's about to hit here in Miami too, so I can feel it. I feel it here coming through the windows and you're right, Lou. I am the ad King. You're right.

4:20Sarah Dandashy: I am. You let us know if you need an ad read here. Oh my goodness. That is just crazy. You know, we've got a lot happening in the world of hotels. You want to kick it off for us? Yeah. I'm so excited to do that. Why don't we go here with our first topic? How net unit growth ate the hotel industry. so uh this is a really interesting piece um also great graphic there by the way um and yeah i mean it's it's pretty interesting basically how net unit growth became the dominant metric for evaluating basically hotel brand health over the past decade so it that's like you know try it's interesting because like the whole thing is like travelers didn't wake up and say hey I want to have 28 like Hilton brands or, you know, 32 Marriott brands.

5:14Sarah Dandashy: Well, however many brands there are, please don't quote me on those numbers. But it's, it's wall street, it's investors, you know? So this is a, it's interesting how, and I've talked about this actually with a lot of people, how you've got these bigger brands and they've got so many different sub brands in their portfolio. And this is a whole article as far as why it came to be. Yeah. I mean, look, we talk, it's why we have my favorite segment of whose brand is it anyway, at the end of the show. So make sure to stick around for that part at the end, but it really came from this. It's, I'm sure you all have seen hotels out there where you see, you know, a fair field and an element together, or, you know, two hotel brands within a hotel.

5:59The reason they do this is because when you say, you know what, I really want to have a residence in, and I want to be the owner of that. And I want to franchise that in the agreement, they say you can't have a residence in in this many mile radius and you won't have that you know property competing with you marriott still needs to show growth and they need that unit growth is how many rooms they're adding every single year and if you can't add a residence in within a certain mile radius what can we add yeah but we could add a moxie a moxie we'll put it right across the street and then the owner that goes to complain that hey you just put a new marriott hotel a moxie across the street from my residence in merit says well that doesn't compete directly with you it's a different customer segment than what yours has but as an owner you're like well you just added more supply to the area that i'm renting rooms in and so that's where the owners start getting upset and we talked about this a couple of shows yeah nariot and hilton and i think hyatt now too are giving you know money back and points back if they're good with customer service scores and all these it's a way to kind of get back but it really makes it interesting it's really that workaround and it's a fine line that i see the brands are doing where every ceo says no this is what the guests want the guests want more brands they want more unique places to stay where the owners are saying hey my adr is not growing i'm having challenges all the expenses are going up and you keep adding more rooms to my area where you said i would be the only one had this brand, but now you're adding more Marriott's or more Hilton's or more Hyatt's.

7:33And that's why we have so many brands that are out there because of this net unit growth. So if you really want to go dive deep in it, you can read Ropit's article. He did a great job really explaining it and diving into how it started. And I think one of the really interesting parts was when Hilton launches IPO in 2013, they had 10 brands that they were reporting.

7:53Sarah Dandashy: now they report on 28 brands you know yeah 13 years later and we talk about how many brands are growing that's just the way to do it um so i'm not sure how what you think about that but as someone building a hotel like we're building our own brand if i had invested millions and millions of dollars into a brand then all of a sudden another hotel opens up down the block competing with me that's owned by the same parent company would be frustrating it would be very frustrating. I mean, I think the big, also the big takeaway with this is that, and again, this ties into the article. I think Sarah wrote it, Sarah Cuppett wrote it.

8:29Sarah Dandashy: Um, and we talked about before we even had her on, she's been on other shows talking about it, but, um, it's again, this notion of this yet net unit growth. Yeah. It, it is, it seems useful. It's one metric in which to, um, to show sort of growth, but, um, what it doesn't reflect. And we were just talking about that is whether hotel owners are actually making money. So it's this, almost it gives us like false sense of, well, maybe not false, that might be a strong, but like it gives a sense of like, oh, the company's booming and growing, but it's really only growing in one way. And it's not reflecting, okay, how are the owners doing?

9:07Sarah Dandashy: Are they making more money? Are they, you know, and it's, yeah, it is an interesting. It's a fine line to walk, right? Because you have to show growth. You have to show your investors because they're all publicly traded companies that were growing every year. And before it used to be how many hotels you owned. And that wasn't a good thing anymore because they really didn't show the volume. So then they went to how many rooms. Now the net unit growth shows the churn because you do lose. If you gain 100 ,000 rooms but you lost 20, your net unit growth is 80 ,000. So it's an easier way for them to really report on it and show.

9:43But you've got to keep growing. You cannot have down quarters. your investors are not going to say, oh, we'll give Marriott a break this quarter. They didn't grow as much. That is not how it works when you have investors and people on a publicly traded platform. As soon as you show weakness, that stock will drop immediately. And that's not what we want for the investors. That's what the CEOs really try to protect while keeping their guests very happy, but also the true customers, those owners of those hotels, because those brands don't own many of the hotels, really not any of them. Some of them have a couple that they still own.

10:17They don't own their own branded hotels.

10:20Sarah Dandashy: Not many at all. We could talk about this all the time, but it's just another way to really break down how they're reporting. So let us know what you think. Let us know what you think. Do you think they need more and more brands? Is it fair to the owners? Do you think it's good for the guests? I'm curious on what you all think. Let us know here. Well, Steve, before we move on. what should we talk about what should we talk about uh before we move on i want to do a quick shout out to our sponsor built they're helping restaurants and hotel f &b teams better understand their guests and create more personalized experiences that drive repeat visits so if you care about loyalty and guest experience it's worth checking out head to join built.com backslash gmh that is joinbilt.com backslash gmh so shout out to our friends over at built for that there you go i see you've been practicing at home you've been really reading the ads working on your pace good work i know i tend to have a very quick pace so um why don't you lead us into this next topic here because i'm i'm curious all right well we'll say this um minor International puts its 1 billion REIT on hold as they were going through this.

11:40It's a Thai hospitality conglomerate behind A &H Hotels, and I want to say this the right way, Anantara, and Minor Hotels, which we've always talked about here. They decided to put it on hold because they really couldn't give a firm decision on how business would look, and they want to make sure that they're launching at the right time. Some of the things that they were highlighting, you know definitely the war going on in the middle east you know international travel is not as strong as it needs to be um and so the group ceo um cited singapore's relatively attractive re-yields they really wanted to promote it but they're putting it on hold right now um so you know when you have a lot of things happening internationally uh it really does put a strain on some of those plans so i'm curious to see what people think i mean what do you see when you look at that sarah

12:29Sarah Dandashy: A lot of numbers.

12:35Sarah Dandashy: I mean, you know, it's it just it's showing. I don't know. Here's what it was showing us is that they want to really put together their Asian and European markets together and put everything really into one conglomerate. It would become one of the biggest ones, but it's just not the right time. It's not the right time for them to go in and really do that. So I think we keep an eye on this and we can kind of go to the next story. But we're wishing them the best on getting their REIT together because if they can, they really create one of the biggest hotel conglomerates and really compete with the Accords and Hiltons and Marriott's of the world.

13:08So I think that's a good little highlight on that story.

13:12Sarah Dandashy: Thank you. Bring us into the next one here. Let's go. So Google just bought Spirit Airlines reservation data to train AI. This is wild. So Google acquired reservation and guest data from Spirit Airlines or Spirit's hospitality. Wait. So it's interesting because, again, I mean, we've talked about data and like the whole data war and who owns what. But it's I think this is a wild move in this time frame. You know what I mean? And it's that data is out there. The most expensive thing. We've talked about this forever. but the most expensive thing out there is data. Yeah. And what's interesting is like, it's not really all about the customers.

13:55It was almost also like how they were all talking to each other within the company. So it's all the information within that they were using. So they could train their models on how employees were talking to each other, how leaders were talking to each other. So the assets include software code, data from finance, accounting, operations, and revenue management systems that they're plugging in. And it says the package includes pricing models, booking curves, flight behavior data, refund histories, in-flight purchases, and Wi-Fi sales. So roughly 100 million emails. And it's just crazy to see that they're taking all that data and what they will do with it.

14:31I didn't know that was for sale. Like you could buy companies data that went bankrupt. It's an interesting thing to be able to see. But it makes sense.

14:38Sarah Dandashy: Because they're sitting on it, you know. Yeah. And they're trying to get money refunded and get things back to investors. I understand, but it's just funny to see like how important it is and what they're going to use that for. Because these models, we talk about AI a lot and I just see it really ramping up over the last month in my world of how fast it's going and the data that we're plugging in. Right now I have, I'm going to use this. I'm going to give an example for everyone out there so everyone can see. Give an example. I use several different tools to run our management company. We use Slack for communication.

15:09We use Notion as kind of like the brain where we keep all of our SOPs and how to do things and if this, then that kind of model. So if this happens and that is how you should respond, then we use Guesty as our PMS and Breezeway is how we control all the things happening on property. So really like four major tools. And we've plugged them all together now into AI and now we have this AI super agent that can read everything going on, all the guest comments, how the team is reacting to those comments, were things assigned to those people that had concerns or challenges? Are there ways to upsell certain guests?

15:44Are there ways to do certain things? So things that would have taken just five years ago, days to do, right? And really diving into every single reservation, really going through things. And you would need so many people to do, we can now do within 30 seconds. Yeah. By prompting. And so I can see why data becomes more and more important as you're building these models and AI companies are getting more and more competitive with each other. It's just crazy to see these things out there. and the smarter it is, those are going to be the winners. And Gemini, we talked about if you're using Google or your Gmail and your calendar and you're on YouTube and you're in that environment, they're starting to get more and more powerful, especially when you can start to have agents purchase things, which is now starting to happen.

16:30I wanted some Miami Heat tickets for the opening. I wanted to make sure as soon as it went live, I had a bot working on it for several days. And as soon as it came live, it alerted me and gave me the best pricing for the tickets. available, it still wasn't able to purchase without me. But that's going to come a time very soon where that's going to happen. So let's see. Let's see where it goes. I'm curious to you out there, if you have any unique cases that you're using AI out there, that you're using all your data that you're sitting on, because we're able to pull the data that we have now and really show and make an improvement and really drive to our bottom line by making those things happen.

17:06I'm curious what you see out there.

17:08Sarah Dandashy: Well, it's interesting because I mean, that's also like one segment of the market. By the way, two comments that were happening in the background. Producer Will said, first of all, data is the new oil. Got to give him credit for that. Very good point. And he also brought up, he was like, if he was a former, like if we were former Spirit employees, how would you feel about them reading chats, emails, anything that may not have been private? And I think that that is valid. and yeah nothing is private in the company I want to give a quote my dad gave me when I first started my career he's a fantastic labor and employment attorney that never sent an email that you wouldn't want to see on the front page of a newspaper that that is true been my mindset as I send something or hit send be careful what you're sending whether it's slack where you think it's private and a direct message if it's owned by the company nothing is private yeah it's it's definitely yeah and even text as well like there's there there's a lot then so that's something for your phone all these things yeah definitely definitely so anyway interesting interesting topic here i like to read this comment use the brain skip the ai if evolution is true we're ahead to being androids as a human race listen i don't know elon musk has already got uh chips going into people's brains and reworking their central nervous system.

18:35So I think so. I think that's where we're headed there.

18:39Sarah Dandashy: Awesome. Let's go ahead and talk about our next topic here. Awesome. Great. Awesome. I mean, that's a deep dive topic. I am just going to keep us moving because otherwise, you know, this is the most interesting topic to me. And it was at the end of today's stack. So I was just ready for us to get through our numbers. So this is your world. I'm excited to hear this one. Talk about something that is cool. Anyway. Let's do it. So this was actually talking about two different articles that came out on Skiff. So both there's a creator shift happening as well as Substack. And they're really kind of sharing where sort of hotel marketing trust lives.

19:21Sarah Dandashy: So one with, yeah, the Substack Renaissance in travel media, which is wild. and then also travel creators are following the money to shorter trips. So the first article, and actually I covered it last week on the video daily briefing, talking about content creators. And it's interesting because content creators are getting real-time feedback from their followers as far as the type of content they want to see. And this year in particular, the followers were like, yeah, we know these nice, awesome, long trips to Europe. seem nice, but that's not really a reality for us right now. Like show us something local.

20:02Sarah Dandashy: And so it's really creators are shifting their content. I mean, I've even seen it a bit in the brands that have been approaching me is that creators are focusing on shorter, maybe less expensive, uh, more local stays. And I'm always a big fan of that because you can definitely be, uh, a tourist in your own backyard. And, um, yeah, so that's definitely the one part of it. We love that you're smiling over here. But yeah, so what are your thoughts on that? Yeah, I love that. I love seeing that. And I've been following. I want to make sure I give him the right shout out because he's a big YouTuber.

20:38His name is Pete Santanello, I think is his name. Okay. And what he does, he's got me wanting to travel all different places across the country. And he goes into these really unique places around the U.S. And he's starting around the globe first and just finds places that no one ever goes to and really wants to highlight the people that live there and show how there are good people all over the country. But he started by going to the most dangerous places in the world and showing there's still good people in these places no matter where you go. But he influenced me to go check out a place in Florida I'd never been to.

21:11I'd never been to Chokoloski, Florida, an Everglades city out in the middle of the Everglades in the middle of nowhere and drove on down there to go check it out. And now he went to another place. I'm like, man, I want to go check out the springs that are in Florida. I've really only been to one when I was in college. I don't know that. And so I think these, if you follow the right, I hate saying the word influencer because they're influencing, but it gotta be a better word. I really feel like they're, you know, people building communities of travel communities and saying, Hey, check out these places.

21:37They're really cool and unique. And if you find the right people, I think it's good. Not like the person we were talking about last week, who I won't mention his name again, that likes to tear places down sometimes. It's really people highlighting, Hey, check out this local cafe, check out this cool boutique hotel and see these things. So I find myself in that place because it is hard to travel internationally now with so many things going on. And price of flights right now is crazy. So there's so many places in our country, in the U.S., if you're from here, that are amazing that I haven't seen.

22:09So I want to go knock some more of those off. And if you're watching from Europe, I know we have a lot of people in Europe and in Asia. I'm sure you have some places that people just don't know about that you love traveling. So I really like seeing this, especially people that really help their local community and get people into stores and restaurants and shops that maybe we never would have gone to in the first place.

22:26Sarah Dandashy: Yeah, I totally agree. Always been a big fan of that. The second article that was kind of tied into that was actually talking about Substack. And Colin Nagy, by the way, wrote this. By the way, big fan of his work. I've been following his work for a long time since even when he's written for a lot of different outlets. But so he was talking about Substack. So are you on Substack, by the way? I am. But you know, what's funny is I'm subscribing to so many different things. I started signing up for Substacks and I was getting like flooded with emails. Yeah, it's a lot. Totally. Well, so what's been interesting, I think in, there's been like a 40 % subscriber growth, which has been interesting.

23:06Sarah Dandashy: And so it's, there's a, there's a couple argument arguments that he's kind of making on one hand, And you've got these independent writers that have these very engaged audiences. And arguably, these independent writers and those engaged audiences might actually provide more ROI than maybe getting a feature in a larger company and a bigger brand just because it's so specific. Now, obviously, the catch-22 with that is that these independent writers, they need to make money. So at some point it's like, okay, well, like what's the fine balance as far as it being like a really like a fair independent viewpoint versus maybe a paid or bought mention.

23:57Sarah Dandashy: I mean, that's always the case, I think, like in anything in media. But yeah, I mean, the point is, is I do not be sleeping on Substack. That's for sure. I know. I need to spend more time on Substack. I got very into it and I was like, I don't know. everyone's just writing with AI here. I got to find the right people. And I was getting flooded with so many things, but yeah, I agree with you. And for those writers out there, all you need, like I said, there's an article way, way back that I shared with you. You need a hundred true fans. So you can have a hundred true fans that pay and subscribe to you.

24:25You can really build a great community. And so I think that's what you're seeing with a lot of these writers is they can get people to subscribe and pay them a certain amount every month and follow them. I think it's great for them. And again, if you're highlighting your community and really doing it well, I think people will follow and trust you. I see so many people with restaurants and, you know, food bloggers and food writers. And then even like some, you know, funny things. Like that guy, Dave Portnoy from Barstool Sports, who has his one bite pizza, right? He goes out there, he's fair, but every time he gives someone a high rating, that place gets crushed with business.

24:58So it shows you how you can really impact in a good way and a bad way.

25:03Sarah Dandashy: Well, and it's fascinating. I mean, I don't know how many people know like travel writers. And I'm talking about like consumer travel writers and that industry. I, you know, these people, they, let's just put it like this. They aren't compensated for what fairly for the type of content that they put out there. And I have a lot of travel writer friends because sometimes I get paired up on, on fam trips. And sometimes I'll be with journalists versus creators. and it's been like this real tough point over easily the past 10 years where they really used to be taken care of significantly by these bigger brands.

25:44Sarah Dandashy: And now you've got companies that are like, oh, well, you can just say that you can contribute to it. And that's like how they're trying to pay these writers. And so you have these really talented travel writers that like are needing to find another outlet in which to monetize because the traditional form of monetization is evaporating, so to speak. So yeah, I think we still haven't seen the most of Substack yet. And that's just in the travel-related industry. Lots of fascinating stuff in other industries because we all obviously care about other things other than just travel. But it's fascinating.

26:22Sarah Dandashy: I'm a big fan of it. So - I have to go back and re-look at it. I was just thinking, I was like, how many more newsletters can I read? How many more articles can I read? There's so much content out there. How many more videos can I watch? It's like, yeah. Yeah. Well, I mean, that's the whole thing. It's the, um, oh gosh, the, I mean, more than the commoditization of, of content, but it's because, you know, we can all, we can all be our own media brands. Like we don't need, like people don't need necessarily to be like on a big TV station or on a, you know, like on a bigger platform to have reach.

27:00Sarah Dandashy: They, you can just it's a great equalized social media has become the great equalizer like you can put out something and and it can reach a lot of people now the trick is to make sure that that's accurate yeah and good exactly and that is good and it's not just a i slop you know now i feel like everything almost is but i'm just having a magazine and holding a magazine every once in a while oh my gosh she's a love like i would go to the airport and like buy two or three magazines i I had like so many subscriptions. Yeah. I do. I think it's gonna make a comeback. All these things that we had back in the nineties are going to start coming back.

27:37Anyhow, it's important time of day here. Okay.

27:40Sarah Dandashy: It's your favorite time of day. It's whose brand is it anyway? The game where we try to guess the sub brands parent company. And if you've been playing along for a while now, you know that we're terrible at this and we have not won many times. So I'm curious to see whose brand is it today? Garner. Oh my gosh. Garner Hotel. Jennifer Garner's Hotel. Let's see. I was thinking like Garnier and I was like, oh, is this a hair company or brand company? Garner is going to be a, I'm going with Hyatt, a Hyatt brand. So listen to the viewers, you've got five seconds to put in the comments. What brand is the parent brand of Garner?

28:28Sarah Dandashy: I don't even know. Can I give a guess there? We can't start. We can't show the results to you guess. I'll say Hilton. That's what I said. All right, let's go. Wait, you said Hilton. I thought you said Hyatt. Did I say Hyatt or Hilton? I thought you said Hyatt. All right, well, let's see. Whose brand is it? Roll back the tape.

28:53IHG. We were way up.

28:55Sarah Dandashy: There was an H in there somewhere. there is an h in there just in the wrong place and let's check out garner why don't you read what it says oh my gosh wait i don't even know what that says in there that's interesting garner by ihg a at garner hotels you will experience a quality stay at an affordable price whether traveling alone or with a group of kids and pets you'll feel comfortable as soon as you walk through the door garner hotels are designed to deliver the all-important things you value most a convenient location and a sound night's sleep. All right, Garner, sounds good. I can bring my pet.

29:30I have a puppy now. I got to figure out where I can start traveling with all these puppy friends. Oh,

29:35Sarah Dandashy: by the way, chimed in here. Well, it came through delayed, but hi, Klaus. Klaus chimed in with IHG. By the way, Klaus, I'm going to give you a quick shout out. I think I can say all this. Based in Barcelona, a good friend of mine, Le Clé d 'Or Concierge, former Le Clé d 'Or Concierge, and yeah, so Klaus, thank you for joining us from Barcelona, buddy. I'm going to text you after this. Klaus, you are the big winner. We have your gift on the way to you. Just make sure to put your address here in the comments for everyone to see. I'm going to personally deliver it to Barcelona because I owe him a trip, so I'm like six years behind on the trip.

30:16Done. Look at that, Klaus. All for playing. Jose got it right his way. All the big winners. Bring it on in here. We love seeing it. Well, Sarah. We cover a lot here in this show. All different things. Stats, AI, travel, content creators, getting into Substack.

30:34Sarah Dandashy: Yeah. And so if you like any of those things, I'm sure your friends will too. So make sure to share this with your friends. And if you haven't yet, make sure to subscribe as well. We love seeing all the new subscribers that join us every single week. And if you have a chance and you're watching us on replay, join us for a live show every Wednesday at 10 a.m. It's a lot of fun here to be able to come on live and get to chat with us and we get to chat with you. So, Sarah, until next week. Oh, stay hospitable.

31:24You