Kayak CEO Steve Hafner on the state of travel, AI's place, hospitality trends, and more! | E1822

0:00I've been teaching people how to give maitre d's tips for the last 20 years because my dad taught me. you take the$20 bill or 50 depending on where you're going uh you fold it twice now you got it in your hand you put it between your thumb and your palm so now you're holding a 20 or a 50 you go up to the maitre d station there's 20 people around the table you put your hand on the maitre d table behind the light you know where the book is say i am so sorry i may have made a reservation or i might have forgotten if there's anything you can do for me you're keeping eye contact and you just turn over your hand halfway person sees the 50 and you say oh what's your name oh susan nice to meet you susan i'm jason and you hand them the 50 or the 20 boom goes right in the pocket let me see what i can do for you i've done this 100 times you know how many times they gave me the money back and didn't get me a table once yeah you know a quicker way to do it is just go up to the the uh the maitre d in your example and just say reservation yes jackson party of two.

1:02Yeah. Or Franklin, if it's a nice place. Oh, oh, I didn't know that one. This Week in Startups is brought to you by Roots. Invest in the only real estate investment trust that creates wealth for you and its residents at investwithroots.com slash twist. Squarespace, Turn your idea into a new website. Go to squarespace.com slash twist for a free trial. When you're ready to launch, use offer code twist to save 10 % off your first purchase of a website or domain. And LinkSquares. Life for in-house legal just got a whole lot easier. From contract creation to execution and more, LinkSquares is the go-to for all your legal needs.

1:52learn more at linksquares.com slash twist hey everybody welcome back all-star summer continues into september i gave my team explicit instructions as we went into the summer i didn't want to phone it in like other podcasters i said no au contraire mal fryer this summer i want the greatest guests in the world on the pod in july and august why because you entrepreneurs listening you don't take a break you're not screwing around in italy for six weeks like other venture capitalists no your entrepreneur is in the arena kicking ass and so i said i want an ass kicking lineup you know what happened everybody said yes everybody loves this week in startups everybody wants to come on the program and what a murderer's row we've had ceo of zillow ceo of HubSpot, CEO of MongoDB, Rulof Botha, everybody coming on the show this summer.

2:49But something crazy happened. So many people said yes, that we had to spill into September. So here we are, all-star summer going into September, which, you know, listen, if you live in the Bay Area, September is the best month in the Bay Area. It's kind of like our August. And, you know, one of the things we talked about on this program over the last year is the massive impact that we believe AI is going to have on every industry. We haven't talked about travel all that much. And travel is a huge, huge industry. In fact, my greatest investment of all time, Uber, a transportation company. Now, there are so many tools for you to try to make itineraries like roam around one of the companies we just invested in.

3:33But this is not a new category. we have had great entrepreneurs doing travel for decades one of the great entrepreneurs in this space is steve hafner he is the co-founder of kayak he founded it 20 years ago brought it public sold it to booking.com and um he's joining us today and we're going to talk all about the state of all the original og travel companies and then what they're going to do in the face of a post-covid era uh recession possibly and of course ai steve welcome to the program jason great to be here uh you're part of this original group i guess dara kajro shahi was also he did uh was he expedia expedia you did kayak uh and just a lot of y 'all just cut your teeth rich barton yeah he was also involved in the early days you you all saw sometime you know in the 99 to 2005 web 1.0 web 2.0 that travel would be changed forever because of the internet and here we are covid and then ai uh let's talk about the state of travel today when you saw ai appear on the scene and you're running kayak and everybody's using you, you know, and Expedia and all these other services to book their travel, it's the best place to start.

5:05What happened in your brain when you saw a chat GPT 3.5 in November of last year and how well it was answering questions? And of course, it does feel like maybe the interface of comparison shopping, which has been the cornerstone of your service and many others, is going to be changed forever by maybe a conversational chat room. Do you believe that? And what was your experience seeing this crazy change in AI? You know, there's, by the way, thanks for having me on. There's been a lot of tech revolution over the last 20 years. I think chat GPT may represent another shift, but it's way too early to tell.

5:46So I'm not as hyped about it for the travel sector as others might be. although we're paying really close attention because i could well be wrong you know i i co-founded kayak with a with a gentleman by the name of paul english magical cto who when he told me he wanted to turn kayak into uh an app for blackberry i thought what a ridiculous idea who's gonna look for travel on a blackberry and i turned out to be horribly wrong so i might be wrong on on on ai uh but right right now the jury is still very much out and and by the way i i use roam around it's it's great for itinerary building but that's that's not the use case that i think people are looking for so so walk us through the the argument for the search in a table format versus chat what has to happen because i believe you made a plug-in we did or chat gpt4 i used it i'll be candid uh the plugin architecture on chat gpt sucks that's not your fault uh but uh to the team over there sam altman everybody great that you got it out quick but it sucks i used the canva one i used the zillow one zillow unplugged it rich barton said no bueno and he turned his off so you're the ceo you're a product guy what didn't work or or what's lacking with the chat gpt4 uh interface and the plugin architecture what needs to change there to make it viable yeah and by the way our our open table brand launched as well with the with a plugin for chat gpt you know i i think for us it's more about having our developers play around with the latest toolkits and then seeing if we get any signal from consumer usage that we could use to inform what we do next and you know our plugin for kayak for example gets 3 000 queries a day you can trust you can trust that with our our website and our apps and and we're doing 60 million a day so it's it's a tiny tiny use case right but what let's talk about this querying it would seem to me that a lot of my processes i want to find i'll just take it through two processes because you work on open table as well right i don't know if you manage the entire group but my process and i love open table major member is i and love kayak as well i will search the web and say hey eater hey yelp hey um i like the guardian times of london for travel as well i there's some editorial sources time out to a certain extent uh used to be zagad was up there uh michelin obviously and i go to those sites hey best sushi best new restaurants best hotels 2023 best boutique hotels i find those then i go to your site i try to find those things find the best deal yep it's like still a little bit of a process for me what i want to do is i want to say chat gpt i'm looking for three to four star sushi restaurants while i'm in new york that uh you know have omakase and i'm looking for i have tuesday wednesday and friday open at seven o 'clock what's available now i can't do that on open table without a bunch of hunting and packing and then I can't figure out which ones are the best.

9:12So I, as the power user who spends big money on your services, I'm looking for that layer above it. Does that concern you? That maybe I'll start my search at bard at chat CPT4 as opposed to on your sites? I don't think so. I mean, I perceive the use case that you just talked about as being relatively rare in the scheme of what dining really is. because you know most dining is local it's you know not new york city with 2500 restaurants uh which is a new one opening all the time you know for for most of our clients they're in smaller locations where there's not that much turnover so they people know their restaurants are actually looking for a quick booking not so much a recommendation and then you know the brands you mentioned either etc the reason you go to them is because it's curated great editorial content that you trust.

10:06I'm not so sure you're going to get there with an interface like ChatGPT unless there's a brand behind it that you actually have seen the recommendations in the past. You found them to be authentic and true. And as a result, you go back to that brand for another recommendation. And the reason people use Eater versus OpenTable, for example, is because a lot of great restaurants aren't on OpenTable. So you wouldn't trust us to recommend a non-OpenTable restaurant, or if you saw a list that was all open table, you wouldn't trust us as well. So I think it's not an issue of capability of ChatGPT to do some of this stuff for you, or Bart, or someone else.

10:45It's actually consumer habit as a barrier, and also consumer trust. Hey, everybody. Today, I'm joined by Roots CEO, Dan Dorfman. Dan, welcome to the show. Thanks for having me, Jason. Tell everybody here in the audience, what is Roots, and what makes it different than the other real estate investing platforms. I'm a complete neophyte. Roots is a REIT with a little twist. Sorry, I had to do it. We are the first real estate portfolio that we know of that builds wealth for both our investors and our residents. And we've created a unique win-win model that creates partners and not tenants. We built this model because I've spent my entire career in real estate investment, 13 years.

11:25And And what you always hear from people is, hey, location, location, location. But location at the end of the day doesn't actually pay your bills. And location doesn't let you know when there's a small leak that will create mold in the future. The people do. And the people who rent your properties are really the people who generate your profits. And when those people are your partners, it really creates this amazing scenario. and it's this model that's helped us grow our fund over 36 % in the last two years. Fantastic. How can people learn more about this opportunity, both on the tenant side or on the investor side?

12:03Check us out at investwithroots.com backslash twist. All right, everybody go to investwithroots, no spaces, no dashes.com slash twist to sign up and start investing today. so let's talk about just interfaces in general going to open table and doing a search do you think you'll add a language model where i could talk and i know that you probably have some hooks into like siri let's say the siri hooks are terrible right now you know if i if i ask siri to play something on spotify it gets it right two out of three times if i ask it to call an uber i don't trust it. It just doesn't work as well as ChatGPT4.

12:43So I think it's your responsibility to build this into OpenTable and the top level of Kayak and let me talk to those interfaces in the way I want to, as opposed to clicking a bunch of dropdowns. So are you going to build it into these products, you think? And have you started that process yet? And what's the early testing looking like? Yeah, look, it's not a technical challenge, right? Voice can be done. And if anything, AI makes it easier to do voice for everybody. Yeah. Right. But I think the bigger question and how we allocate our resources are, is it ready for consumer adoption? How many people actually want to speak to a device to make an open table reservation or to make a flight booking?

13:25What we observe based on our usage is the answer is not many. A lot of people are in meetings making their lunch reservations or they're in the back of the car with plenty of free time and interacting with an app or texting away. And it's the same is true on the flight side, on the travel side of the business. You know, there's just so many entry fields to consummate a transaction and travel that voice is really not a good mechanism for it. And that's why even with our sister brands, Booking.com and Priceline and Agoda, and Agoda is an Asian brand, by the way, you would think if voice was going to be the vehicle by which people interacted with our services, you see it there first, we're not seeing it.

14:10Yeah, that's fascinating to me. So you have to, as someone running an at scale service, as opposed to a startup, startups are like, we can make this thing fluggy. It can hallucinate. Nobody's got any expectation of our brand. You're at this. You have this tremendous gift that your brand means something to somebody. Open table means you got your reservation. You don't have to worry. It's consistent. It's perfect. Kayak means you're getting the best price. It's perfect. You're not going to have a mistake. and you spent 20 years building up, over 20 years, building up that trust, you can't go crazy with these features.

14:49They got to be bulletproof, huh? I think so. And I also think that we have plenty of time to course correct if we get it wrong. Right? So, you know, we pay a lot of attention and startup land to what's the latest, greatest. Because a lot of these are companies that create features that we can easily copy and scale. So I think you quoted a couple examples earlier that as we see good ideas start to get traction, we pounce on it, we improve on it, and then we scale it. And that's historical across Silicon Valley days. That's how the big keep getting bigger is because they're able to do that. I think we've fortunately reached the same point in our life cycle where we can do that as well.

15:31uh what's what happened during covet to your business both on the shutdown side and how difficult that was and then on the let's call it i think the three yolo summers did we have three yolo summers 21 22 and 23 right we had three yolo summers take us through exactly the pit of despair and how brutal it was and then the absurdity of the yolo summers yeah look i think if you pick two industries the worst industries to be in would be travel and dining um you know in the copity years so it was a total show um but you know theoretically we were well capitalized we had a very strong balance sheet billions of dollars of cash on the balance sheet um and we could do the right things and the right things for us were in this order first help our customers so the people who were actually traveling and all on itineraries we reached out with the kayak service and said here's ways to get home right here's things you can still do um for on the restaurant side restaurants literally closed right so you know we we waived our fees um so open table charges restaurants fees to use our software we stopped doing that we thought it was going to be a three-month waiver it turned out to be almost two years which was you know hundreds of millions of dollars that we put back into restaurant pockets by not billing them and then the third thing we did is we we wanted to make sure we took care of our employees you know so you know unlike a lot of other companies we didn't uh have massive layoffs or anything like that we kept the team we didn't replace churn uh involunt or voluntary churn but we kept the team in place and uh and and we made it through and we emerged stronger than than we entered it i mean we did have some hiccups along the way where like kayak you know when you couldn't travel the you could use the kayak um website in our app to look for toilet paper remember when like looking for toilet paper was actually a thing we actually did we did meta search for toilet paper was you know we made no money doing it but it was fun for our developers to work on uh let's talk about the economics of the travel business.

17:45My cursory knowledge of this from seeing startups in it is you make very little money per airline ticket, a couple of dollars. You make 10 % or 20 % booking a room. In other words, a$200 or$300 room, you could be making$20 or$30 a night. Restaurants, you make a buck per seat or two bucks per seat. You get a table of four, you make four to eight bucks. Is that about right in terms of what you make on open table hotels and restaurants? I'm sorry, airlines? Yeah, I think the way to think about it is airline tickets are low margin business, always have been. Hotels, rental cars and activities are in the 15 to 20 % take rate and restaurants are sub 2 % take rate.

18:33Now, restaurants run on a very thin margin. What is open table? A dollar per head? I remember that from like 10 years ago. What do you make? What is, where are you? I wish we still made a dollar per head. No, it's, it's, it depends on the market, but it's about half that these days. Oh, wow. So you've had to, to compress that. So if you, if you see the table of six, you might make three bucks. That's a, that's a razor thin margin, huh? Yeah. Which makes for a great competitive mode. If you get the scale. Got it. Um, and the restaurants are now experimenting with other modalities. uh i uh signed up for something called dorsia which i guess is named after the restaurant from it's that crazy movie with christian bell uh where he's a serial killer uh uh america psycho um dorsia is like his favorite restaurant in that and so with dorsia this is for like crazy rich people you you basically can get a reservation at hard to get out places for but you have to guarantee you're going to spend 500 a person 300 a person and then you you kind of knock money off of that it seems to be working for certain high-end restaurants what do you think of this model where you're it's beyond surge pricing it's rich people cutting the line let's call it what it is what do you think of dorsia and you must have had this idea before so why didn't you do it or are you considering doing it oh this is a perfect example going back to what we were talking about earlier of a new startup coming out with a business model that we pay careful attention to and then we figure out how to make it better and scale it so there actually aren't that many people in the world uh who are willing to pay that kind of money for a reservation nor are there that many restaurants who have that kind of oversupply of demand you know more demand than they actually actually see people um so the real insight there is how do i change consumer behavior and get consumers to think about making a deposit or prepaying some amount when they make a reservation so you know it it shouldn't be five hundred dollars but maybe it's a dollar maybe it's the first ten dollars you put down so you have a deposit it's no different than these installment payment plans right which is if you go to a website you don't want someone to abandon a cart you want any any way to get an attachment to a consumer airlines do this too with courtesy 24-hour holds for for fares so if i can get you even if it's a dollar um to collect your name to have a deposit towards a transaction to have that hook in you then that's much more important to me and across the 55 ,000 restaurants that are an open table than getting into the 10 hottest restaurants on a Friday night in Manhattan because that is a really, really small niche.

21:33But if I can affect all the people who are on all their dining occasions and get them into the mindset of when I make a reservation, first, I need to make it online and i need to put a deposit down for for a benefit which is the restaurant knows who i am or i get a discount on the actual tab or i get a pet or table or a better time or loyalty points since we have a loyalty program these are all reasons to do this it's not it's not the dorses of the world that's a that's a really small idea yeah so the having more skin in the game from the customer that's very appealing to restaurants who what's the average no-show for you know or cancellation with an open table reservation or just in the industry at large so the industry at large no-show rates can be 25 or higher wow at open table we're about a third of that rate because we know the person who's making the reservation and it's a three strikes in your route rule so if you know show three times jason at a restaurant without telling them in advance you get blocked from using OpenTable.

22:37Oh, wow. And so, yeah, that is... And there's no way to make up for it. You can't get back in good standing or something? A lot of people do the workaround of creating a new Gmail account. Yeah, sure. Yeah, so there are workarounds, but it's inconvenient. Yeah, I love using OpenTable for a couple of very specific restaurants that are hard to get into. And I don't mind making the reservation and losing a certain amount. So have you implemented that yet where I can put a hold on something and if I don't show up or I have to cancel with a short time, I pay$10? Does that exist on the app? That exists on the app.

23:16It's on a restaurant's discretion on what they decide to do. So the software has the capability. A restaurant can say, look, it's a prepaid dining experience. This is what it costs. Or you need to pay$25, for example, if you're in the Hamptons, which is everywhere there now, you have to pay$25 or more to reserve a table. they can all enable that and then they can choose whether to make it refundable to you or not or have that reservation fee apply against your check or not i like that now what about bidding for spaces on premium nights that is something that i've seen i get pitched on that idea all the time you again uh since you're at scale must get this is the concept of bidding for a table on Thanksgiving, Mother's Day, New Year's Eve, has that come up?

24:02Or pre-selling it? I guess pre-selling, you have that option. You've enabled them to do that. So what about that? Bidding, surge pricing? How do you think about bidding and surge pricing or discount pricing? It's premature in the restaurant industry because right now, what we're trying to get people to get to is first, it used to be a walk-in and phone behavior to make a reservation. Now we've cross divide more than half of reservations now booked online the next one is to get them into the habit of doing it in advance and putting their wallet into the equation bidding i think is just another hurdle down the road yeah when you know maybe 90 of all activity is now online and half of all restaurants are you know asking for a monetary deposit of some sort then perhaps you can have a bidding mechanism so we slowly have to change consumer behavior get people comfortable with the idea that hey you if you if you blow off the reservation there's going to be a reasonable price to pay for that and you actually as a consumer if you want the table saved for you it's kind of reasonable for you to pay 25 bucks or 50 bucks if you blow it off because the restaurant could have used that table and you burned it on them.

25:20Yeah, that's right. So look, I think the restaurant industry is going through the same evolution that you're seeing in live events. So I'm on the board of a company called SeatGeek, amazing company. Yes, great company. Great company. Was that Jeff Flo's company? Jeff Floor's company? Did he do SeatGeek where he did the other one? No, no, no. Jack Gretzinger and Russ D'Souza are the co-founders there. Yeah, they're taking it to Ticketmaster. And what they're basically doing is they're going to venues and sport teams and say, don't you want to know who's in the stadium? And don't you want to have a mobile first ticket, easy transfer process, you know, get a scrape on every transaction that happens?

26:00Because, you know, tickets go through multiple hands. So who you sell it to the first time and who actually shows up could be completely different people. Yeah. So, you know, restaurants are just getting to, hey, let's book everything online to actually know who's in your venue. And when Jason sits down at a table, what Jason likes to order, what his average check size is, what other venues he goes to and with what regularity. These are all gold for restaurateurs. And that's the platforms generally obscurify that, right? They want to own the customer. So there is something about sharing that. So does OpenTable share the names of the guests and their contact info?

26:41Or how do you... What's the philosophy there? Yeah, we absolutely do with the diner's consent. So, you know, our view is the person that's in the restaurant is actually the customer of the restaurant. We capture the data on our front end and we pass that if the consumer gives us consent to the restaurant, which almost all the time they do. The sensitive part is if restaurateurs are very competitive, right? so the steakhouse doesn't want to share its data on how often a consumer comes in with the with the seafood place next door no we obviously see both right so you know what what most platforms do who are adept at this is i give you a rating so or i tag you so um you know when you go into that steakhouse i can tag you as a regular or local or high spender or a restaurant can tag you the restaurant can but so can open table oh and we do because you know how much i spend how do you get that p oh you are the point of sale system right it depends on the restaurant i know for i know your frequency but also if you're we know we have point of sale uh connections with lots and lots of providers uh including toast which is seems to be the uh the pos du jour of the moment of the moment So, you know, when you check in, we actually have read-write capabilities so that we know exactly what gets ordered and is sent to that check.

28:07And we can also update in our software where you are in your meal so that we can release that table for the next diner. If your landing page is terrible, I'm out, right? Most consumers are. It's 2023. You can't have an ugly website. Stop selling for okay or good and have great. And great means you're using Squarespace. It's out of the box. beautiful. These websites have templates made by the world's greatest designers that are going to engage your audience, let you sell anything. And Squarespace, over the past decade, has just added feature after feature on top of the gorgeous templates that are designed for mobile.

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29:24And when you're ready to launch, I want you to go to squarespace.com slash twist. And they're going to give you 10 % off your first purchase of a website or domain, go to squarespace.com slash twist because they know we sent you. So that would argue for you having a rating system for diners like Uber has. And Uber decided to start disclosing that to both parties both the driver etc i would very much like to have the restaurants know what a ridiculous absurd tipper i am and so that when i come in they're like hey this guy tips 50 often or 100 or 35 that's basically 35 40 is my floor so So is there a way for me to like be gold or elite in the system and then have that be public knowledge?

30:19Because I've never had that communicated back to me. Yeah. So diner rating is something that we've been aware of for a long, long time and is opportunity. We actually have that capability internally. We have not crossed the Rubicon of exposing that either to the restaurant or to you, our user. for a whole set of reasons that i don't i don't want to go into right now but it's well it's a little divisive it's a little divisive right it could i think just i would only share exceptional uh guests because then you leave out the bad guest part which people don't like right like they wouldn't want to be known as a cheap tipper or a minimum tipper yeah that's that's right i mean but we can we can solve a lot of that with badges so we we have an open table vip badge for example and when we use that to communicate to restaurants hey this is someone you should be more attentive to um if you know if if you care about uh vips returning to your restaurant do you have an explicit rating do you have like the equivalent of amazon prime or uber one for open table i've never seen it in the interface where i pay you a hundred dollars a year and i get some elite status or something uh we do not uh enable that you have to earn your way to our status levels either by the frequency of using the app making sure you have a great no-show um rate and then some of these other attributes on your on your spend profile fantastic you mentioned toast um you know i grew up in the restaurant business i love waiters but then i had three kids and man do i appreciate when they destroy some appetizer and i can just open my phone and reorder it and i'm seeing in california specifically where we have an inability to hire service people that they've gotten rid of the concept of waiters at what i'll call you know three and a half four star restaurants like there are some nice restaurants now with toast and i was shocked like huh this is a you know we have a nice beer hall in san mateo that we like to go to that's not cheap but it's not a michelin star place but it's it's higher end and they use toast and i was like huh this is interesting only runners and i was just talking to them and they that honestly jcal if we could find waiters we wouldn't be using toast this is not because we think customers love it because some do and some don't it's pretty polarizing in fact this is because we can't just hire staff because unemployment is at a 50 year low so maybe talk to me a little bit about your thoughts on that and uh you may be adding that as a feature set because that does seem to be like a feature set and the in the pos kind of functionality that maybe you should get into as a brand extension how do you think about ordering from qr codes well it's it's great i mean this is this is one of those um areas where the technology has existed for years actually it's the restaurateurs themselves who out of habit or out of desire don't want to implement it and and as you said there's a lot of consumers who agree with those restaurateurs they like paper menus they like the presentation of the menu they like the interaction with the waiter in terms of recommendations and what's popular they like to tool around and wait for a check to come and buy some extra time and stretch out that experience yeah versus you know other folks who like being transactional like to use their phone to see what's a popular dish what's been ordered how many times today they like to pay that way they like to get the recommendations from friends versus a server who you know some people just don't trust what the server is going to say um so the technologies existed um open table as you as you noted we're not a pos we don't intend to become a pos because that's a very fragmented market um there's lots of different players uh it's a harder b2b cell and nobody's making money at it including toast by the way yeah so it's it's another of these verticals where we prefer to be the the front of house software layer with the so what's guest facing but with the direct connections via api to to the back of the house my understanding for open table was that that device where you could put the floor plan and seat people was invaluable to restaurants and that hardware and that service they pay something like 500 bucks a month for i'm not sure what the pricing is but that sass business um really is what captured a lot of the a lot of the the front of house and they became sort of addicted to it they hire people who understand how to use it really well and then the marketplace became the second business maybe you could explain how that business developed and what drives it revenue wise and what drives it adoption wise is it the marketplace and the customers in the app or is it that sas solution uh yeah so you're right the components of our revenue stream are right now there's two pillars or two um two stools if you will and we by the way we need three and we'll talk about the third in a second uh the first is that subscription fee right which is just to use the software that's the sas product people will pay anywhere from 79 to 350 a month for that and then there's the the cover fee or then which is what you call the the network or the marketplace so that's pay for performance if we actually get people from open table into your restaurant you pay us you know you reference a dollar per per but it's about half that.

35:53So that's, you know, the bulk of our revenue comes from that. But the third stool, which is now what we're very eager to see happen is as consumers move to actually opening their wallet when they make the reservation, that's where we have the ability now to take a dip into the take rate of the actual transaction. Yeah. And that's actually our fastest growing part of the business is as we evolve, as consumer habits evolve and as our restaurateurs start charging for services that were previously free, we can actually take a scrape. I would love to see the chef's table or the wine list be included so that I, as a baller consumer, and this is what I have my assistant do.

36:36This is a secret I'm giving to everybody in the audience. I'll have my assistant call. You know, I want to go to the best places. I'm going on a quick trip. Listen, I earned it. I'm 52 now. I got to spend this money. I was broke my whole life. I have my assistant call. hey, Jake, how's going to be in town? I understand you're sold out. He really would love to try your restaurant. He's read all about it. He was wondering if he could order two bottles of wine in advance. He likes this nice wine. And I looked on the wine list. And if we could order this wine and this dessert wine, and then if there's any cancellation, if there's any way you can do that, please call me back and show me a nice email, whatever.

37:14So now I've pre-ordered a$300 bottle of wine and a$200 bottle of dessert wine. you know what happens nine out of ten times a reservation opens up i want to do that in an interface you offer the wine pairing with it then all of a sudden you've now filtered out who are the great customers who can avoid the wine pairing and you know maybe who's going to drink water all night and they make all their money on the wine pairing anyway so anyway that's my tip strategy it's it's a good idea we we already do do that by the way oh by badging you a vip you get a better view into availability at the at those restaurants and by the way if i was your assistant she's the one that should be worried about chat gbt and bard in your scenario that's true she actually uses it and she's incredible at it it's just it's really a matter of you want me to tell you how i bribe to get into restaurants this is my big secret i've been teaching people how to give maitre d's tips for the last 20 years because my dad taught me you take the 20 dollar bill or 50 depending on where you're going uh you fold it twice now you got it in your hand you put it between your thumb and your palm so now you're holding a 20 or a 50 you go up to the maitre d station there's 20 people around the table you put your hand on the maitre d table behind the light you know where the book is say i am so sorry i may have me at a reservation or I might have forgotten if there's anything you can do for me you're keeping eye contact and you just turn over your hand halfway person sees the 50 and you say oh what's your name oh susan nice to meet you susan I'm jason and you hand them the 50 or the 20 boom goes right in the pocket let me see what I can do for you I've done this 100 times you know how many times they gave me the money back and didn't get me a table once once in new york at the china grill Well, they were just swamped and they couldn't do it.

39:06The woman literally gave me the 40 bucks back and said, thank you so much for the tip. I really can't do it tonight, but I will get you next time. And there are seats at the bar. You just go take a seat at the bar. So there you have it, folks. There's how to tip properly. But nobody likes to tip the maitre d' anymore. There's no cash anymore. Weird that we live in a cashless world. Yeah, you know, a quicker way to do it is just go up to the maitre d' in your example and just say, reservation? Yes, Jackson, part of you too. Yeah. or franklin if it's a nice place oh oh oh i didn't know that one jackson party of two did you have you use that yeah it works better with franklin and then you show them franklin i would say it probably works better with franklin all right everybody life for your in-house legal team man it can be so hard chasing down signatures pouring over contracts, man, you're toggling between tools, you got to go back and forth with the sales department.

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40:47Start streamlining your contract management process today and make life for your in-house legal people so much easier with just a few clicks. Learn more at linksquares.com slash twist. That's linksquares.com slash twist to start streamlining your contract management process today. Let's talk about hotels and trends over there. Sure. I stayed at something called Citizen M. I don't know if you know about this yet, but I like stylish hotels. I always had an affinity for the W Hotel when they first came out. They were very well-run, hip. And I just couldn't believe that the W Hotel, wherever I went, was$300 and had the hippest bar downstairs.

41:31And then when I stayed at a nice hotel or a nicer four - or five-star hotel,$500,$600. But the bar was old and stodgy. So I really got into my SPG points for a while, which is not Bonvoy, I think. and now i'm seeing citizen m and i'm seeing some other ones where you don't go to the lobby anymore you just simply pay 200 bucks 250 179 you come in with your phone you scan your id you go right to your room let me talk about how hospitality is changing in hotels and then on the other side i am a super fan of amman hotels that's my favorite hotel in tokyia this is like 1500 $200 ,000. So I go high, low.

42:16I either do Citizen M, I'm in and out of a city two nights, or I'm bringing the fam and I want to have something really nice with them on. What are the trends now in the hotel business here? There's a bunch. Look, there's a lot to unpack there. By the way, I think you're probably the oldest guy in the lobby to Citizen M. I think I, well, you know what I love about it is I go in there, I get recognized and people are founders hanging out in the lobby uh the citizen movement is incredible you i i see all the founders who are on a budget and that's who i want and also ace hotel in new york is also super affordable and the ace hotel has a lobby where everybody works and co-works i like to run into founders that's how you know i found some of my best investments so walk me through the the hospitality trends in hotels now yeah you know hospitality is an interesting industry because you've got a couple of counterparties involved that are very different and have very different incentives.

43:12So you've got the actual owner of the building, right? Then you've got the operator of the hotel, which is usually not a brand. It's some name you've never heard of. And then you've got the flag, the actual brand of the hotel. So you've got three different parties involved. Citizen M is an example of a new trend of the hotel brand actually operating the hotel too and having a brand new tech stack and reimagining the actual hospitality experience which is trying to take labor out and putting as much of the functionality into the app and into the palm of the guest so if if you notice with your citizen m booking uh you probably got a text message you interacted with them via text right amazing probably checked in in advance by scanning your id i did and submitting your credit card and they told you when you showed up and they and then know you show up because they can locate your phone right yeah that and they'll tell you hey your phone is your room key and this is your room right and you can you can converse with them via chat you can order extra pillows all that kind of stuff it's amazing contrast that with a marriott um which uh is a is a great company the brand right um but they don't actually operate hotels they contract with lots of other management companies operate those hotels and they don't control the the equipment that's on the property so if you went to the marriott in new york pick one you know pick pick the one in times square uh you can't get into those doors with your phone and there's a reason for that because the landlord doesn't want to the owner of the building the landlord doesn't want to spend the money putting in new door locks uh right yes and then the hotel management company uh doesn't want to strip out staff either they don't mind having front desk staff staff because typically a hotel management company bills you at cost plus oh so cost plus means that they their incentive is to increase your spend that's right not lower the spend and make you addicted it to their brand and take longer vacations that's right and then you know at the high end of the spectrum the amans look the the luxury properties this is a great time for them because so many people um are willing to spend money on experiences and there's a lot been a lot of wealth despite the covet 19 pandemic a lot of wealth has been accumulated over the last five years and people are looking to deploy that amans a beneficiary of that and that's another place where they don't want technology they want personal service right they want five people meet you at the door three people there's no reception desk they just take you to a little seating area they open a valise and then they pour you some soda put out some snacks they have a conversation with you you sign a couple of pieces of paper and then three people walk you to your room and your bags up there and it's been unpacked exactly already already so that's that's a staff heavy model yeah and you're and you're seeing that in the roommates you're willing to pay but those are also the most profitable hotels yeah by by far the the the thing i really love is we have an investment in a company called any place um and this is really interesting they are renting apartments then they design the anyplace hotels uh and i think it's anyplace.com yeah it's anyplace.com um they put in gigabit speed internet they put in a working desk with a giant monitor They put in a basically camera podcast kind of studio.

46:40And we incubated this company, we invested in it, and it's really making people super productive and they do very long stays. This is like 30 day stays, two weeks. So if you're a nomadic person, so is that longer stay thing and the maybe not Airbnb, they got their own thing going, but there seems to be something getting filled in between the kind of randomness of Airbnb and the predictability of your Marriott? Is that something you're covering as a trend? Yeah, look, I can go into lots of interesting trends in hospitality. That's definitely a segment that's growing because you do have these nomads and more companies are flexible about where you can work and for how long.