The Modern Hotelier #102: Hospitality Insights from the Independent Lodging Congress Sausalito, CA === David Millili: to a special edition of The Modern Hotelier. We're coming to you from the Green Room at ILC Sausalito, California. I know who he is, Steve, but tell everybody who we got with us today. Steve Carran: David, today we have the man, the myth, the legend, the founder of ILC, Andrew Benioff. Andrew, thanks for stopping by today. How are you doing? Andrew Benioff: Great, and thank you for having me, Steve and David. I really appreciate it, and it's exciting to be here in Sausalito. It's such an amazing, just outside of where we're sitting now, The view is just crazy. The Golden Gate Bridge is there. There's an eagle flying by this morning. You see the the mountains of Marin. It's Unbelievable. Steve Carran: Incredible location. Incredible. Thank David Millili: Well, so first, thank you for partnering with us for this ILC. we've had a great time. So tell us a little more. We've, we've been able to learn some of the history of this property, but tell us about why you guys chose this location and how's it been so far? This is day two. Andrew Benioff: Yeah, um, so, we usually repeat our congress, which is this event, it's, uh, every year, two and a half days, and it's usually in a larger gateway city. Last year in the Bay Area, we do one more year in the Bay Area, and then we'll be moving it next year, for a couple years, probably to Miami, and so we did, um, Last year we were down at Fort Mason in San Francisco, we were at the Argonaut Hotel, that was great, the event was at Fort Mason, it was lovely, so we wanted to be here in the Bay Area again, weren't really sure about hotels, so we did a lot of research, and this one came up, we're connected to the folks who developed and own it, and so we thought, great, and then when we came out and visited it, we just thought, oh my gosh, what a great setting. You know, at ILC, we spend a lot of time just hanging out with each other, having a drink, a meal, a walk, talking, and this venue lends itself to that, so it's really great. Steve Carran: It's awesome because it's on a national park. I was talking to them yesterday and they're like, it's, it's open. People can come and visit, go on hiking, and it is a, it's a true sense of a community in this Andrew Benioff: it's it's wonderful. I mean, we were out throwing a frisbee this morning in the Central Green, which is open. People were, who weren't, you could tell they were more local, were walking their dogs or, Playing with their kids. It's just amazing. What a great venue. Former, uh, army base, Steve Carran: Yeah. Yeah And this used to be basketball courts and a bowling alley right behind us and it's very Andrew Benioff: As an adaptive reuse project, it's like such a great example of what you can do with existing Steve Carran: 100 percent So this is 12 years going ILC, correct? Andrew Benioff: 12 years We started in 2013. Uh, this is our 12th year. Next year will be 13, uh, years, something like over this 12 years. Maybe 20 Twenty five events, I don't know, we're up to four a year now, in the beginning we started we were only once a year, Steve Carran: How have you, besides, you know, adding events throughout the year, how have you seen the ILC grow and change over the last 12 years? Andrew Benioff: Yeah, that's a really interesting question. When I started it, my idea was, I want to do a mini investment conference, like, you know, you look at NYU or Alice or the Lodging Conference, I want to do a mini one of those but focused on independent hotels. And so that's how I started. That was the feel of it. It felt very, but that's all I knew, because it's going to, but over the years, it's slowly sort of morphed in, uh, my partners at Eagle Point. Uh, hotels, Eric, Warner and Stephen Chan have given their input over the years. They're very hands off, but at the same time they, they've given, you know, advice and talking with different speakers and we've sort of, it's a very different feel than it was the first years. And it's very different than NYU and Alice and all those conference, but it's taken a while for us to get to where we are and where we're comfortable and, I think making an impact in the industry. Steve Carran: Absolutely. David Millili: so we've been sitting down with a lot of the attendees. Tell us what do you think is one of the biggest challenges that the independent hotel or just the indie community kind of faces going into 2025? Andrew Benioff: I would say challenges, I mean, I think, I think, um, one thing that comes up often is, technology. Obviously you guys talk about this a lot and I know David, you've Uh, especially as in the space, you know, I'm, I'm really focused on, for my projects, investment, I, you know, I can model something, I can look at the returns, I even can figure out general ops, because that's what I was in, but when it comes to programming the technology. I mean, quite frankly, I call you and I say, who, who, who should I be talking to? Because I just don't know or have the time, but also there are so many different, platforms out there. And I was talking to somebody yesterday about their platform and they, they're a bolt onto, you know, one of the PMSs and I'm thinking, wow, you have to do that too. And there are just so many pieces. So, um, as hoteliers, I think we're fairly backwards in the hotel industry, but I think we're starting to catch up and there's a lot of new companies trying to figure this out. Which makes me optimistic, but I think it's still a challenge because they're, it's not a smooth, you know, easy thing to say, oh, I want these guys, these guys, or these guys. It's, you have to choose your PMS, but then you have to choose all these other things that go along with it. and that's challenging, David Millili: Yeah, I think one of the biggest things is that the industry, and one of the first things you have to do is admit you have a problem, and the industry has admitted that, but they haven't solved it. They're trying and a lot of good people are trying to do that. Um, but yeah, you're right. It's, it is, it just, it gets more confusing every year because more and more pieces are added to the tech stack. And for the hotelier, they're inundated with all these questions and trying to figure out exactly what you said. Oh, and I didn't know I needed that. I got to plug this in. I got to get that. Andrew Benioff: yeah, so would say it's a, it's also, I would say it's a dual problem. I agree. Haven't admitted to it. I think one, you have an older generation, a very senior hotelier is either running the entire company or running a hotel. I mean, somebody who's been in the business for 40 years. And they're really good at ops and serving a guest, but they're not super tech forward. Um, so they're a little resistant to change, I would say. And then you also have the implementation issue, which is Even if they agree, they say, oh, this is awesome, we should use this at our property, the staff are so stretched in just doing the basics every day, they're like, we're, even if they, that company doesn't even charge them, they say, we'll send you our people to put it in, they're like, how do we even fit this in our schedule? So all of that is, because hospitality is obviously an operational business and it's super intense. So figuring all that out is a whole nother thing. So I don't, yeah, I don't know how we get through all of this stuff, but eventually we'll have to. Steve Carran: So again, looking ahead to 2025, what are some trends that you think the indie space is going to see next year? Andrew Benioff: Well, one trend we've seen and we've talked about it here at our Congress and we'll continue to talk about it is consolidation in the industry. the large, existing brand, groups, Marriott, Hilton, IHG, Hyatt, et cetera, et cetera, are buying, some of our star independent brands, Standard, Graduate, others that are out there or affiliating. Andrew Benioff: So that's one trend because now I think the brands have realized that a lot of the creativity, interesting ideas, and really great product come from these indie brands. People come up to me and say, wow it's, So sad, the indie brands are now being gobbled up by the, bigger brands. is the independent sector dead or, well, what are we going to do now? And I'm, listen, I'm a real estate investor, developer in both hospitality and other stuff. To be a developer, you have to be glass three quarters full all the time. I mean, I have to be an optimist. and I think you know, Yes, yeah, they are being gobbled up. But it just gives more space for new green shoots to come up and new things to evolve. And there are folks out there that are doing great things that are now gonna grow. I mean, look at proper, they're getting larger. Will they be bought one day? Maybe. But there are other little ones that only have one hotel here or there and they're starting to grow and maybe that gives them more room. So, I don't know I'm always optimistic. I think new things will happen. Um. I think the consolidation is super interesting, and I will say that don't think any brand has yet figured out how to, keep indie brands relevant after they've been bought. You know, the first year or two they may be, but sometimes, at least up until now, the brands have not been able to help themselves. They always want to like, add that bureaucracy to those brands, and that's what kills them. I think that, Accor with Ennismore has done a pretty good job. I'm a big fan of, Sharan Pasricha at, Ennismore. Co CEO, I think he's amazing. It feels they're still Yes, they're a ginormous corporation, but it feels like they have their own lane. I don't know over the long term if that'll stay that way. But, people like, Kevin Osterhaus at Hilton and, Amar Lalvani, now at Hyatt, who did Standard. those are two of the most creative and interesting guys that I know in the space. And just because they went to those large corporations doesn't mean that they're not interesting anymore. It's whether Those corporations continue to give them oxygen or they smother them and that'll, we'll have to see. Steve Carran: I love your optimistic perspective. I love it. You Absolutely. David Millili: All right, so 2025 is almost upon us. We know there's an ILC coming up in Nashville. Tell us about that. Andrew Benioff: Nashville's gonna be really great. Looking forward to, um, uh, exploring that city. We haven't been there before. We're gonna be at the Hutton Hotel. I think it's February 12th and 13th. Don't quote me on that. Although now I'm on video, so I said that. Anyway, um, the, the, uh, it's gonna be really cool. And they have like, they have a regular ballroom space there, but then they have this really cool other space. And that's where we're gonna be in. So In ILC fashion, it's going to be a great feel, we're very much looking forward to it. I think we're also going to go over and perhaps spend some time at the headquarters of AJ Capital Partners, the creators of Graduate, they have a whole campus over there. There's a Soho house over there, we're going to do a walking tour of that, I believe. It's going to be wicked cool. after that. We have Cultivate at the end of April in New York. Not set on the location yet, but that's going to be amazing. That's in partnership with Highgate Tech Ventures, in probably the end of June our plan is to hit Chicago, haven't been there yet, and then next October, a year from now, our plan is to be in Miami. David Millili: Busy year. Yeah. Well, thank you. It was a pleasure. Always good to thank you. Always good to see you. Yeah. Thank you you guys. You too. Thank you. Thanks. Steve Carran: Now we are joined by Peter Heinemann from Passports Resorts. How are we doing today, Peter? Peter Heinemann: Doing great, Steve Carran: Great, great. We're excited to have you on David Millili: So, Peter, tell us, and those who are watching or listening, give us some of the more interesting history of this property. We've got the bowling alley behind us, but tell us some things that people might not know about this property Peter Heinemann: Okay, so this property is now part of the Golden Gate National Recreation Area, which is the number one or number two most visited national park in the United States. it was originally a, army fort, and it transitioned from the army to the National Park Service, and then in the 1999, the National Park Service put out a request for qualifications, for hotel companies to, develop a, hotel on this site, And passport resorts. threw its hat in the ring and through a very long process, we were selected to be the developer of the, hotel here. David Millili: there any, like, is there, there's got to be some story that somebody's told you before it was a hotel, or anything interesting that you kind of could say, well, I, I can't believe that? Peter Heinemann: Well, I'll tell you the story about how we got involved. Yeah. Right. Which my business partner, Mike Free, was walking his dog out here on the parade ground. And a local resident came up to him and said, you're in the hotel business, aren't you? And he goes, yeah. Well, did you know that the national park service was putting out a request to see somebody to develop this into a giant hotel? And we went, well, that doesn't sound like a great idea, right? You know, maybe, uh, the smallest economically viable project would be a better use of the space. So that's how we got involved. And, uh, you know, it's just one of those serendipitous things that happen. Right? And, uh, we were very fortunate to be able to be selected and then partner with, a local developer at Equity Community Builders who had done, uh, Tom Sargent, who had done a few projects in the Presidio, and then the rest was history. David Millili: and so before we started recording Tell us the story about whose bowling alley this was right behind Peter Heinemann: us. Okay, so this was the General's bowling alley. Uh, and, uh, back then they were able to use privates to set the, uh, the bowling pins. Steve Carran: That's awesome. Do you have any, is there a part of this hotel that is kind of a little, a favorite of yours just due to history, or whether it's a great memory or something like that Peter Heinemann: Well You know, it's, you know, it's, this is such an amazing location, right, because, uh, not only are you in tremendous proximity to downtown San Francisco and everything that San Francisco has to offer, you know, but we back into the Golden Gate National Recreation Area. So you, you know, have, you know, just thousands of acres to explore in a rural experience. So you have, you know, both. An urban experience and a rural experience available to Steve Carran: So it's a national park here. Are there any challenges that come up being a hotel on a national park. Peter Heinemann: Well, we have a very long term lease. We had a 60 year lease and we have 42 years left on the lease. So, I mean, we still have a long Steve Carran: ways Peter Heinemann: to go Steve Carran: You'll be Peter Heinemann: here for a while. Yeah. We'll be here for a while. and no, the park service has been a tremendous partner, uh, you know, with us. I mean, part of, you know, that was part of. The, you know, impetus for doing this project was to, you know, have events like the ILC event here, you know, where this really is a place for non traditional groups to convene, I mean, as well as normal business groups, but also a lot of non profits, you know, again, our environment here of, you know, having The setting was San Francisco across the bay and the proximity to the park itself. People want to venture a little bit further, they can go up to the wine country. So it's a tremendous location. Steve Carran: Kind of talking about challenges, looking ahead to 2025, we're only a few months away, what do you think is going to be one of the main challenges in the independent space for next year? Peter Heinemann: Well, I think the challenge is really for everybody in the hospitality industry. Right. That, you know, we're all facing challenges with Uh, respect to leisure travelers and as leisure travel come back, leisure travel is really coming back. But, you know, group business is still lagging behind and, you know, our business mix here is about 50 percent group and 50 percent leisure and, we're beginning to see that coming back and we're certainly hopeful, right, that by 2025 we'll get back to pre pandemic, you know, types of levels of group business. Uh, one of the advantages I think that we have here is our campus like setting and we're beginning to see with a lot of groups, uh, where businesses have people working remotely, right? That now they're beginning to see group events as something that will allow them to get everybody together, right? And that, and I think that's really the wave of the future people working remotely and then using, uh, Group events as the way for them to connect with the people in the organization. Steve Carran: you have absolutely enough space to hold large groups as well. David Millili: Yep, Peter Heinemann: we do. We Do David Millili: That's great. And so we're asking everyone we've interviewed, do you have any predictions for next year? What trends we might be seeing in hospitality? Peter Heinemann: well, you know, everybody, you know, I think is trying to get back, you know, to, to, to normal, right? I think that, you know, we've got challenges in the, you know, in the industry with the cost of financing going up. So, you know, that will create challenges for people with new projects or if they've got to refinance a, you know, project. So, you know, we'll, we'll see what happens. David Millili: Yeah, we wish you all the best of luck. This has been a, it's been an experience, it's been a great experience for Steve and I being on this property. Peter Heinemann: Great. Well, I appreciate you guys coming here and doing the interview. Steve Carran: We appreciate you sitting down with us, Peter. Thanks so much. David Millili: Thank Peter Heinemann: you. Terrific. Thank you. Steve Carran: We are now joined with Lindsey Uberoth from Preferred Hotels. Welcome, Lindsey. How you doing Lindsey Ueberroth: Thank you. I'm very impressed with how you pronounced my last Steve Carran: last name. I appreciate that. It was, you know, I'm not great with names as we know, but so Lindsey, everybody of our listeners is familiar with Preferred. We know what you're doing. What is some exciting things that are happening right now with Preferred? Lindsey Ueberroth: been an exciting year, so I'll give you some highlight reels. First, our Legend Collection, which is our ultra luxury collection within it. We finally passed 100 members in that collection. And we're very excited about that because it's a very carefully curated group of hotels. So that was a big milestone for us. You also just, you know, Like new entrants. We're in new markets that we hadn't been in before. Um, places like Scandinavia and new places in, new parts of Africa, you know, so for us, like growth in new markets is always something we get really, really excited about because the world's a big place. Um, so, so new growth and new markets and new builds, you know, the other, the other, big area of focus is always on our loyalty program that continues to grow. Um, but just sort of the evolution of that. And we were talking about loyalty a little bit earlier. In terms of, it's not just about points anymore. People want some, new benefits and value adds and so the evolution of that continues to be important, to us and how we're growing in that space. David Millili: So we talked earlier, this is your first ILC and we know for people who have been to this the first time, based off our industry, it can be a little bit of a shock. It's totally different. So what was your, what was your take on, on this show and it being your first one? Lindsey Ueberroth: So cool. Like really very, very cool. Um, you know, I, I love it. Cause I mean, I, one, I like it's a little more casual, a little more informal. I've been at the same token. I've had that part allowed me to meet with people in a very, very different manner. I just also think that the format allows for, we're in a fun industry, but sometimes you go to conferences and. I don't know, I feel like the fun is lost outside of the cocktail party, so for me this was like, everything about it, the venue was great, the people were great, I'm, I will, I will be back. Even though we've had people come every year, so this is uh, this is exciting for me to be here. That's great. Steve Carran: great, It sets the mood, doesn't it? I feel like you walk in here and it's like, you know the intent is to network and just get to know people. So like people that may be a little bit more standoffish because they're used to getting pitched all the time, now are just, those barriers are down and it's just, they're so much more open to conversation. Awesome. So, looking ahead to 2014. 25 or a few months away. What are some of the challenges that you're seeing in the hotel hospitality industry? Specifically for independents. Lindsey Ueberroth: Okay. So I still think we're in the golden era for independents So I, will say, I mean, I think just, overall, I think the independents are a good space. The, however, is. the market is softening a little bit. you know, our competition has changed. So it's not just, we're not competing with ourselves. We're competing with all the other chains that have now gotten into our space. And, you know, the distribution landscape has got a little bit trickier. You've got AI. They've got very different budgets than we do. So if you think about what the major chains can spend versus an independent, a true independent standalone, it's very, very different. So, you know, really helping, you know, I look at what, what our job is and how do you educate and sort of distill down what is a very noisy space to help independents make the right decision in the areas of distribution, technology, AI, um, you know, and so that they can stay. Not only on course, but ahead of what's, what's happening. You know, there's also the loyalty race. I mean, there's, there's a lot of different things, not to mention lot of things happening politically around the globe. There's a lot of fears about what could happen with, you know, pending, I hate to use the word war, but there's a lot of concerns and the independence in general, I just have to work a little bit harder because there's not the playbook. Steve Carran: 100%. Lindsey Ueberroth: So, you know, I see those as the challenges. I see that as an opportunity to, for us as a partner, for others, just to really come together. And I think independents, regardless of who they're with, really need to come together because I think there's real opportunity and strength as an independent Steve Carran: Absolutely. David Millili: that and so coming out of those challenges, we've been asking people, what are, what's your prediction for 2025 as far as trends and what we're going to see? Certain things that are maybe will be a little different Lindsey Ueberroth: So, I, I kind of break it into segments. I mean, I think if you look at luxury travel, people are still going to spend. They're still going to travel. I think what they're doing is that they're looking at the spend now and so, they're saying if I'm still going to spend the same amount, but if that means I'm going to travel domestically or I might travel shorter periods of time, I think that's a trend that we're going to start to see. I do think that there's going to be a shift back to more domestic travel. I do. I do think that we're going to see a bit of that. and or they're going to go really far flung and go to Asia or really remote. I mean, I think Europe has had a great, great run and I think you'll still see that, but I do think people are going to say, okay, if I'm going to go, I'm going to go really, really far flung because those parts of the world have started to open up. Uh, we're seeing, I look at our VIP VIP desk works with, um, the travel advisors who are booking really high end things. this desire for like, Ultra immersive, ultra like curated is like, that's the thing. I mean, they want the perfect restaurant reservation. They want tickets to this. They want access to certain things, you know, that we're definitely seeing, wellness is huge, but it's not just like, I want a spot. This is like really like deep dive. Like I'm a CEO or I've just come off. I'm Taylor Swift. I'm coming off of tour. Like, where do I go to just, it's, it's a different type of reset. Steve Carran: It is all about experiences. And again, this is edited, so you don't have to answer this if you don't want to, but I'm always looking to add to my bucket list of hotels. Can you give me like, Maybe not your favorite, but one hotel under your portfolio that I Lindsey Ueberroth: Okay, what kind of traveler are you? Like, do you like adventure? You like, I want to sit by the Steve Carran: I'm not like a luxury guy. I like those hyper local experiences. When I go to a community, like, we were talking to a hotel in Montana, and they, it's a glamping resort, and it's like, you go there and you're eating bison. You know, you're sitting by the campfire. Like, I live in Colorado, a little bit more outdoorsy, like rugged, rugged hotels a little bit. Okay. So, if you have any that might be up my alley that you can recommend, I will. Lindsey Ueberroth: it. Well, if you want to go, like, there's a place on my bucket list I haven't been to yet that I'm dying to go to, oh my God, now, of course, it's part of our Beyond Green Brow that I've been talking about for so, David Millili: so so long, Lindsey Ueberroth: and now, like, it's a three camel lodge, and it's in Mongolia, and I'm dying to go to Mongolia? Yes. Yes. Yes. Yes. I have this fascination with it because it's like, I mean it's remote, but it's really cool. The experiences that you can get at this place look just the charts for me. What are some my gosh, they do these like festivals like with, I don't even know what kind of horses they are and they've got these eagle, like these, like, Eagle sort of experience. I'm not even, I'm doing a horrible job of articulating this for you. You're just gonna have to trust me that we want to go. Like, we want, we, we we want to go. Like, right? I'm like, we want to go. Yeah, you threw me off on this one. I'm sorry. That's okay. No, no, no, it's okay. But like, the bucket list is huge for me, but I usually say the last place I went is usually my favorite place, So you know, it's, uh, it's hard to have a favorite. Steve Carran: Well, hey, we'll all go to Mongolia. We're gonna go Lindsey Ueberroth: going to go to Mongolia together. We're going to Three Camel Lodge, we're going to have a great time. Either that or the Brando in French Polynesia, and I think those would be two Steve Carran: Either one, I'm not going to complain about, to be honest with you. I'll enjoy it. So, all right, coming soon. Lindsey, Lindsey Ueberroth: David, and Steve Carran: Steve going to Mongolia. Lindsey, thank you so much for stopping by. It was great to meet you here, and I'm glad you enjoyed your first ILC, and appreciate you sitting down with us. Yeah, it was my pleasure. Great to spend time with you Thanks so much. David Millili: it. Thank you.