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Each episode of GAIN Momentum focuses on timeless lessons to help grow and scale a business in hospitality, travel, and technology. Whether you’re a veteran industry leader looking for some inspiration to guide the next phase of growth or an aspiring executive looking to fast-track the learning process, this podcast is here with key lessons centered around four questions we ask each guest.
GAIN Momentum episode #24- How Hotel Software Vendors Are Evaluated | with Mark Hope
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Jason Emanis: Welcome to another episode of the Gain Momentum podcast, focusing on timeless lessons from global industry leaders about how to grow and scale a business in hospitality, travel, food service, and technology. I'm Jason Emanis here with my co host Adam Mogelansky. Adam, how are you?
Adam Mogelonsky: Doing great.
Jason Emanis: Good. Today's guest is Mark Hope, Senior Vice President Development for Coast Hotels.
Hello, Mark.
Mark Hope: I'll
Jason Emanis: it away, Adam.
Adam Mogelonsky: So, Mark and listeners, our podcast is focused on timeless lessons that we can learn from senior industry leaders on how to grow and scale a business in hospitality and other related industries. And we structure our roughly half an hour podcast around four key questions that we ask all guests. So with that, Mark, our first [00:01:00] question is What single piece of advice would you give to vendor companies entering hospitality?
Mark Hope: break that down a little bit in that. If you're an American company and you want to come to a business in Canada, open a Canadian office. Don't try run Canada from the US. You have to have an office here. Now, that's the single biggest thing when I look at that.
I'll also look at new companies that are entering the overall space and say, if you could have one point of contact where right now some of the problems I have, I have to have a different point of contact in Canada and a different point of contact in the U. S.,
Adam Mogelonsky: right.
Jason Emanis: Why is that? I don't, I don't under, yeah, I don't understand why that is. Is that a
Mark Hope: it's territorial.
Jason Emanis: Okay.
Mark Hope: most companies that come and set up a business in Canada, they'll have, like here, even Coast Hotels. So, we're Coast Hotels Limited, that's our Canadian company. We own Coast Hotels USA, Inc., which is our U. S. company. For taxation reasons, for payroll reasons, you know, and I'm sure it's very similar on U. S. or European companies opening, [00:02:00] entering the Canadian space or the U. S. space.
Adam Mogelonsky: So, have you ever had a vendor where, let's say they're American, and they come to you and approach you and they say, okay, well, we want to service all your Canadian hotels. And then they, then you tell them, well, you got to set up a Canadian beachhead or a Canadian office. And they look at the costs and.
It isn't quite there and they come back to you and say, well, sorry, we can't do it.
Mark Hope: some of these guys don't understand, but I more so tell them they need an office here, because we have different regulations. As someone There was a conversation last week where we'll call you on Monday, well you can't call us on Monday. Why? Well it's Thanksgiving. They couldn't get their head wrapped around it.
And we said it's not a new thing because holidays between the U. S. and Canada, it's simple, but it's not, right? Now, they need to understand the Canadian landscape very much like I need to understand the U. S. landscape. And it's different rules and regulations where I find Canada, we've got, you know, uh, 12 [00:03:00] provinces, three territories. And there's some, I'm going to say the majority are in line with each other, similarities, but there is little things that are different. In the U. S. you have 50 states and 50 different sets of rules. They're very different.
Adam Mogelonsky: you find, and this is me coming at it as a Canadian, that Americans are, the stereotype is that Americans are a little bit more internally focused, let's say, to phrase that politely. Yeah. have you ever had any European companies come over and try to sell to you as well?
What was our, our PMS vendor was European. We bought a European PMS, as they established Canada and stuff, and we're actually just phasing them out. But they got bought by a. Another European consultant, I mean, there are hotel concepts out of Belgium, they eventually got bought by Amadeus,
Mark Hope: so we, our PMS vendor for 15 years was, our direct contact was their call center in Europe, but it was a small enough vendor that we had a problem, I could pick [00:04:00] up the phone or an email to the owner and it would get dealt with, know,
so they knew the importance of one big client.
Jason Emanis: Yeah, you, you like that? You prefer that?
Mark Hope: Well, it gave us a little bit of, um, how do I put it?
We could get to the guy to make the difference.
Jason Emanis: Yeah,
Adam Mogelonsky: Bargaining power, yeah.
Mark Hope: Yeah. Well, it's not even bargaining. It's that I got a problem I need fixing. Um, like one of my biggest things with hospitality software is all the, all the vendors sell, send their salespeople to sell to us.
They sign the deal. They walk away. And when there's a problem, it's not, you can call a salesperson, he'll nod his head, but he can't, he can't do any action. It's got to go in the queue with the other different people in other silos, where when we had a direct line at the CEO with this previous vendor, it was great because he would get it fixed for us.
Adam Mogelonsky: And that's even incorporating a time difference. And for reference, most coast hotels, you're West Coast, so that's not just me here in Toronto, five to
Mark Hope: It's, it's 11 hours off to [00:05:00] Europe.
Adam Mogelonsky: Yeah. So that's a, that's a big, that's a big time difference to deal with if you need something right away
and to get somebody on the phone.
Mark Hope: And, and they all have support centers that run 24 seven, but as you know, the support center, the guy that gets the midnight to seven shift. He's not the smartest guy. He's the
newest
Jason Emanis: yeah,
Mark Hope: got to wait for the next guy.
Jason Emanis: yeah.
Adam Mogelonsky: So, based on that experience, would you ever work with another European vendor, or would you be a little bit trepidatious?
Mark Hope: No, we would look at the right European vendor. Again, it's relationship.
it's it's actual product. I mean sometimes the product can be very sophisticated. Sometimes it can be very simple. So it depends what we're dealing with, you know.
Adam Mogelonsky: Wow. I'm going to move into the second question here, Mark, and that is, uh, it's related to what you're talking about. What are some of the challenges or setbacks you've experienced when rolling out a new business expansion or a partnership?
Mark Hope: Okay, so we've [00:06:00] just gone through an RFP for a new PMS and we have now selected a vendor. I sat in on most of the phone calls, but I'd always come in at the end or after the call was over and talk to the, the principals and I'd go, okay, you're a nice sales guy. You're a nice sales guy. Who's going to action this when, when it's over and done, because you've, you've washed your hands of it. I had one of the vendors will remain unnamed for the CEO hand me his business card with his personal cell phone number on it. Mark, you call me, I'll get it actioned. Because I find with a lot of them again, sales people sell you stuff, it's bright and shiny, it doesn't work, they can't help you. They've got to go to someone on the technical side and you get put into the silos or into the line. Into, you know, and
if you're not first in line, you're going to wait. They don't have people sitting there to write code, you know, they don't write code or change code until they have a problem, you know. All those people are working, so all of a sudden now we need to get in the middle of their queue. It's a problem.
Adam Mogelonsky: And yeah, I mean. Working with technology companies, a lot of times it's this grower die mentality where that [00:07:00] affects how much resources they put towards sales and continuing that, those new contracts and that sales cycle versus putting towards the actual product and having more developers to manage the customer success pipeline.
Mark Hope: But there's one company, I remember talking to them and I said, why don't you guys stop doing this? Let's clean up the mess you already have, all the little bugs and stuff. Can't do that. Gotta keep moving. And
I understand why. You know, we've got to keep moving the business. I see these guys release something new every day.
It's great. But there's problems with other stuff because it's two different parts of the business, right? And it's about growth. And especially when you get into public companies.
Adam Mogelonsky: So, talking about the RFP process, and this is something that Every vendor would love to hear about in terms of more of the soup to nuts, let's say, of how you go through window shopping and learning about a product and silently [00:08:00] evaluating it behind the scenes through to that actual reach out, RFI or an RFP, and then the selection process.
Can you talk about what your thought process is and how Coast Hotels decides?
Mark Hope: using the PMS process we just went through, because I've been in so many parts of the business over the years, I've seen what, other vendors that are selling to us in other scopes, let's say in beverage or in buying widgets, how they do it. They do it for purchaser, and the purchaser's just, you know.
Ticking boxes. Um, we had our purchaser write the RFP, and our purchasers sat in on all the RFP interviews and stuff that we did, but we also had our CFO and our Director of Technology, and we brought all our hotels into the game as well. We had 35 and 40 people on each of the presentations which were done via Teams, whatever the case is, right? It wasn't just the two or three people because we're going to sign the check, but they're going to have to use it. So, we actually had the end users being involved, and so we started with 8 you know, after they'd all done initial presentations, we met as a group, [00:09:00] and we scaled that down to 4 But, I didn't make the decision, our CFO didn't. We might have waited a little bit more, but the 35 people all got a vote. Everybody got up, put up their hand and say, I like this company because of this. I like that company because of this. And so then we went back to those 4 Okay, here, here's the next stage.
We want you to, you know, we need these questions answered because things have popped up during the initial process. Okay, we didn't even, we didn't start speaking money until the third round. Because price was not why we were buying. It was product we were buying and capability of that product. You know, but all the way through, I will say this, our CFO ran a very good process for us to select our, um, PMS. And everybody was involved, and it was very transparent, you know, I was the unofficial auditor when I was doing the vote counts on, you know, who we're going to go with and why. You know, and when it got to the final nuts,
once we'd made a decision on the vendor, then Manny, who's our CFO and our purchaser, they went back with the sharp pencil.
Hey guys, we need to do some work on that. I'll say this, which I hadn't seen happen before. [00:10:00] We've bought from a major, um, PMS vendor, and we're paying in Canadian dollars. That doesn't happen. You know, and it was, but we put that up front in the RFP. Here's what we want. And we had the little guys and the big guys.
We had a Canadian firm, we had American firms, we had European firms. This was not just that, but our, our list of people we could send RFP to was limited to essentially a dozen for the simple reason every, we have what's called iHotelier CRS and everything that interfaces that has to have a two way advanced interface, the two way advanced GMS interface, and where they can interface three or four hundred PMSs Not with the two way, not with the two way advanced on both sides. So it limited the number, but the dozen that were at the table, these were the big players in the industry. These were not little guys.
Jason Emanis: all those
Mark Hope: ran a very efficient RFP.
Jason Emanis: yeah, all those players had the capability you were looking for or did you get in the process, round one, round two, and find, [00:11:00] like, they knew better, they shouldn't even have been here?
Mark Hope: There was one or two of those.
You want to call them column fodder, whatever you want, but you know, at the end of it, they didn't even make the vote list. You know, um, and yes, I'm going to tell you there was one that we put in because of a prior relationship and we liked the guy, so on and so on, but when we got through his stuff, we had other ones where, you know, we have certain integrations and we want all these vendors to have these integrations. Well, we had two or three of them as we're going through the process. Oh, we're working on that. that. was never what was asked. It was asked if you have it. We're
not looking for beta. We're looking, we're not going to be the beta. It needs to be, be in place, you know, so again, people tick the boxes just so they get to the next stage.
Jason Emanis: right.
Adam Mogelonsky: Yeah. But I, I, I like it that you're, you're tough, but fair.
Mark Hope: Oh, I, I, I will say this and then afterwards the people that did not make it, we had a full debrief of each firm, told them the how and why.
For, for clarity, when you're talking about bringing 35 to 40, people around the table to vote on a product, and they're, they're voting for [00:12:00] various factors and what they like and dislike, what job roles are we actually talking about here? Are we talking like front desk associate? Are we talking
Mark Hope: No, we had general managers, we had front office managers, we had asset managers, we had corporate staff, but we had users as well as overseers, I mean, administration. They're all at the table, but it wasn't as, once we did the RFP, we put all in the spreadsheets for every vendor. Here's who ticked the box.
Here's who covered that. Like, they're all showing the same information over again in a recap, so they didn't have to go, oh, I missed that one, or I didn't know it was all there, and we talked. We didn't just, okay, vote. We talked through it. Here's my experience. Here's what I've seen. Here's what I've heard, because we've all heard anecdotal evidence from other Hotel companies,
what they like about XYZ or what they dislike, right?
So all that was put on the table and right now we've got 39 hotels that have five PMSs. When we're done we'll be down to 39 hotels with two PMSs. The one we selected and actually three PMSs and it is because [00:13:00] We've got have from 31 rooms up to 300 rooms. 31 rooms room only. You don't need the same system that a 300 room full service food and beverage meeting space hotel needs, right? You just don't have the same wants or needs. So there's one group of um, I've got one PMS. There's six of them in the chain. Four of them will stay off that PMS. Two of them will flip to the new one. And it's one because one of them is one that we own and we'll put all of it into all of our own properties. Um, and one, he just doesn't like it. But we have another PMS in the U. S., smaller PMS, where they've got three properties. And they're not going to change out and that's okay. There's a current integration that works. You know, we'll offer them the pricing. They can see it and see what it is. But I think, you know, we're going to move 32 of 39, right off the hop.
And literally this week, there's been calls all week where, you know, building the box. Because everything will be standard throughout the brand, but then as we get into more, then we'll start to customize to some of the other houses. [00:14:00] But we need the box built first, the core.
Adam Mogelonsky: How long is that process, phasing 32 hotels?
Mark Hope: We'd like to get it done prior to next summer. So let's say between now and June 1st. So we're going to get two done before Christmas. That's the beta, you know, and one is our flagship hotel and one is a seasonal hotel that's closed. So, when we get those up and running, then we'll start to move to the next week, five the week after that.
Like, it's not going to be one per week. Can't be.
Adam Mogelonsky: Yeah, but that
Mark Hope: and it'll be done based on geographic, because the PMS vendor will have somebody live on site in every site. So it's easier if I've got Kamloops, Kelowna, Oliver, where they can, week by week, or they can drive between hotels. You know what I mean? Lower mainland, we've got six hotels.
It's easier. Um, whereas the ones I'm going to say in Grimshaw, Alberta, or um, Canmore, where they're kind of out there by
Adam Mogelonsky: still is a very fast process. And, um, you know, you're talking about remote [00:15:00] locations. Are these on prem systems that you're talking about,
or all
cloud?
All cloud. Okay.
Mark Hope: Yeah, And.
that's it right now. We're on the Teleserver Center.
We're getting off of that. That's going to change the whole dynamics of how and what we do.
Adam Mogelonsky: on your end, because obviously the PMS is supporting this change over the vendor is, but on your end, how big is your team that's facilitating this process to make sure it goes off smoothly?
Mark Hope: On the IT side, there's a half dozen, um, and that's not to say we will not have a project manager consultant involved.
Adam Mogelonsky: Yeah.
Okay. Mark, we're going to move into our third question here, changing gears a bit, but still looking ahead. What do you see as the biggest opportunities for growth in hospitality for 2024 and beyond?
Mark Hope: Okay, what's the biggest piece of news in the hotel industry this week?
Adam Mogelonsky: The choice Wyndham.
Mark Hope: That's the opportunity. It's scale.
It's size, right? Again, if it's [00:16:00] not going to happen or if it's going to happen, it won't be anytime soon, but you know, they're going to get 250 million in synergy savings here and 250 million there, you know, but publicly listed companies, which is another part to look at, right?
Again, that's part of what they do. I think, you know, size and scale, like for us, we're at 39 hotels. Um, I've got one more opening. November 7th, I got two, they'll open January 14th, um, but they're little baby hotels. Those three hotels together won't be a hundred rooms, but you know, I'm gonna fly into the U. S. later this week to look at another hotel that we might franchise, and we have our closet of two that we're looking to purchase, but I've been looking to purchase since January last year. It's October. It's to find a product at the right price and the right location and be able to get a deal is not easy because we're not going to overpay. We're not going to buy the wrong thing,
right? So, some like Choice, they buy, you know, 7, 000 rooms and or 7, 000 hotels a month because they're not buying hotels like I would. They're [00:17:00] buying a brand. They're buying franchises, you know, because when them and Choice between them don't own a lot of buildings, they're all franchises.
Adam Mogelonsky: yeah. Mm
Mark Hope: the next two years. I think the bigger comment or question is about 23, we start on a macro basis nationally, doesn't matter if it's US or Canada, we got back to 2019 levels. 24, I think we'll fully succeed, but that's macro. You go to micro certain markets, it's not back. And we have to work on that.
And I think there, the new normal, you know. Not everybody's ever going to go back to a work in an office downtown environment, you know. Corporate travel, will it ever come back to the, levels it was at? I'm going to say I don't think so. So if that's the case, we have to find something to replace it with, right?
Which in this case could probably just be more group, whatever the case may be, but we're all still getting used to a new normal. And let's
not forget, COVID's not gone. We've just learned to manage it,
Adam Mogelonsky: Yeah.
Mark Hope: There can be other outbreaks this [00:18:00] winter. I mean, right now, I realize we're in CAD in the U. S. and we think of all things, but I'll tell you, Ukraine, Russia's got a big bearing on what the hell we're doing in our world. Now Israel and Hamas, same thing.
It doesn't touch home because we're not dealing with day to day, but I'll tell you, one of my owners of two of my U. S. hotels owns a hotel in Jerusalem. You think I can find him to talk to him right now? No. And I'm not trying by the way, but you understand me. Those things, Ukraine and Russia. Grain and oil. You talk about inflation. It's, it's all predicated on all these other factors. Factors that are out of all of our control.
Adam Mogelonsky: Well, we live in a globalized world now, and to bring the macro to the micro, because the macro, you can go crazy just thinking about the knock on effects of everything. And I'm wondering, how do you In the micro, meet with your team on a regular basis to discuss the potential impact of these macro events that are happening, across the pond.
Mark Hope: Well, we're just completing our [00:19:00] 2023 24 budget. Our, our budget year is December 1 onwards. So, with our owned and managed hotels, as we went through each hotel, we wrote the macro, the national, um, GDP, unemployment, we brought all together what we think is going to happen. Then we work with each of those hotels to figure out, the localized, the provincial and the municipal parts of it. And we talk about it, and we talk about the impact, and any of the franchises that want free unsolicited advice, We'll give it to them. I just got off a plane this morning. My, my two guys, I've got one up in the north of BC right now, one in Southern California, both traveling as well. And as we travel and meet with hoteliers, we don't talk just about operating performance. What's going to happen? I mean, it is relationship, but it's operating performance of the hotel. What's helping you? What's hindering you? Nevermind new competition, whatever the case is. Um, where do we corporately see next year? Like I was in Kelowna, BC this week. Where do I see Kelowna on what's going to happen? And we had myself and the general manager had a good chat about that. And then [00:20:00] it's up to him to disseminate that to his troops.
Adam Mogelonsky: Well, for reference, for all of our listeners here who may not know, Kelowna had some wildfires recently, which really affected things, and I'm wondering if you could shed some light just on how you Having ho having hotels in that area, in that valley, uh, the Okanagan, dealt with that situation and are now advising your franchised or, or managed hotels to deal with that.
Mm-Hmm.
Mark Hope: It's a very difficult thing. So we have three hotels, or we have four hotels in the Okanagan Valley. Oliver, Soyuz, Kelowna, and then Kamloops. And they're all impacted by, in different ways, by the wildfires. And at one point when the wildfires came up, the provincial government said, Okay, you tourists need to check out and go home to leave bedrooms for evacuees and firefighters. So where we're running 90 percent of 400, hotels empty. The hotels in Oliver and the Soyuz never got any evacuees or firefighters, so they sat empty. Kelowna got evacuees, but they got [00:21:00] them at 200 rather than the
400 they were before. So that's part of it, you have to do the right thing for the community, okay, which is important, but by the same token, so now, when you write budget for next year, what number do you use?
Because as you know, you're always looking for year over year growth. And in a case, I'm going to say Prince George's is a hotel we own. We got two or three hundred thousand dollars in extra revenue because of forest fires this year. Do I put that in the budget next year? No, I can't because you don't want to wish man bad by a forest fire next year, right? Now you can tell the salespeople you got to find something to replace that with, but it's kind of hard in a northern environment without a lot of corporate travel in the summer. So, but forest fires and floods. And infrastructure projects, we watch all that kind of stuff because it impacts what's going to happen.
I mean, um, we've got a string of hotels up, the Trans Canada Highway and, and so on in respect to the Trans Mountain Pipeline 20. Last two years, it's put incredible pressure on the hotels, but because they came along, they had some [00:22:00] camps, but they took all the Airbnb, which displaced everybody else in the hotels. So we've ran monster occupancies, and I've been saying, and I think I'm starting to get right, there's a reckoning coming up for that area. Because all those people have now gone home, the project's done. And I'll be honest, there's no other major infrastructure project coming along. And those infrastructure projects do lots.
Big numbers.
Adam Mogelonsky: Yeah, it's, uh, I mean, it's very interesting. You know, you talk about. The wildfires and the floods and, um, dare I use the term climate change to talk about the frequency with which these things are happening. Do you see any impact in that regard in terms of how you plan ahead for these weird weather and what's becoming increasingly erratic events?
Mark Hope: It's interesting because friends of mine own a hotel in Maui.
Adam Mogelonsky: Mmm.
Mark Hope: as you know, when they went
through some Maui wildfires, and I was, I didn't bother him the first day, because obviously, but then I sent emails, hope everybody's okay, that type of thing.[00:23:00]
One of our hotel managers, his daughter was stuck on Maui, she's now living in his hotel on Kauai, but it took him a week to get her out, you know, and it's the mental toll that it takes on people. You know, fiscal toll is a whole different story, but it's a mental toll. And it's the same thing with all of our hotels in regards to forest fires, floods, and everything else. Can you get your staff to work? Do your staff have a place to live? You know,
those are the things that, never mind our occupancies down this month or our rate, you've got to look at the bigger picture of who and what we are, because we're a community employer.
In most cases, we're the center of the town. Our hotel is where you're going to see the mayor in the morning, having breakfast, whatever the case is, right? But, you can't offer the service if you don't have the staff, because the staff can't get to work because the road's washed out, or they've been displaced from their home, or even if they haven't, they're just worried about everything, you know? And I'll tell you, a lot of them man up and come to work and you'd never know that they're under pressure at home, but they are.
Adam Mogelonsky: Wow.
Mark Hope: So we take that into account.[00:24:00]
Adam Mogelonsky: How many, for reference, uh, of the 40 some odd properties that are under, uh, the Coast's name, how many of them have staff accommodations?
Mark Hope: One, maybe two.
Adam Mogelonsky: Wow.
Mark Hope: anD Jasper, which is in the middle of a national park,
makes perfect sense on that.
I'm going to, and actually, for instance, Revelstoke, I know he, he owns a couple houses in town that he uses for staff accommodations, you
know, but I know a couple of hotels that built staff accommodations in their hotels are not Coasts, but another brand, because he knew we would need them. I mean, I'm not sure if you're following the news, but here in British Columbia, where I'm based this week, the provincial government rolled out their new, um, short term rental rules. Which didn't kill Airbnb, but sure kicked the living hell out of it. You know, cause the biggest problem is, we can't, there's nowhere for our people to live,
because, you know, they're, they're taken up by Airbnb. And the guys that used Airbnb for the original purpose to rent out an extra room or something, I'm, I'm fine. It's the guys that own 40 of the things, and it's a full time business. You know, they're competing against us directly, [00:25:00] and that impacts us greatly.
Adam Mogelonsky: Well, yeah, I didn't know about the British Columbia news, but I followed, uh, eagerly the New York, ban or the reduction there in terms of saying that, uh, you know, if the primary resident is on site, then you can rent out the Airbnb, but all the other ones, uh, are a no go, uh, or have
Mark Hope: Have a read on BC other than the 14 resort municipalities like Whistler, Sun Peaks. They've laid the hammer down. The problem I find with what they've written is you can have a great set of rules. It's all about enforcement.
Adam Mogelonsky: yeah.
Mark Hope: It's about, you know, catching the bad guys.
Adam Mogelonsky: Yeah, uh, Mark, we're going to move into our fourth and final question here. What problems would you advise entrepreneurs to focus on solving in order to quickly scale within the hotel industry?
Mark Hope: People. They've got to have people.
I'm a small startup and I got two, four, six people, but I think I'm going to grow it. You can't wait till you [00:26:00] grow it to hire the next people. You have to have them in place because you can't sign a contract with me and then not be able to honor it.
And sure, some of it's technical where they can do it all with computers, but most of it's still got people behind the scenes. the one thing that people always accuse the hospitality, we are not a minimum wage employer. I will say in certain towns, some hotels are, there's no doubt,
but you got to pay to play.
You got to have staff. You got to pay that staff. And it's not just paying the big bucks and make them work 80 hours a week. You got to have a culture. Get out of a workplace for these guys to follow. You have to, because sure I can go to work for someone and make 100,000 a year and they drive me batty.
Someone else comes and offers me the same or even less, but it's a nicer place to work. I'm gone. So, build a culture as you build your business. And hospitality as we all know goes up, down. Like, it's not flat. It's not like commercial realty. You know, we're full tonight, we're empty tomorrow.
And be able to, To follow that pattern, you don't want to hire a bunch of staff and then come winter, lay them all off because all of a sudden the hotel business you're doing drops in half, which it does, [00:27:00] right? You've got to make it, across the case of the year. You know, a lot of cases, hotels, as you probably know, in the winter, it's negative cash flow until they get to their high season. You know, but, you know, we have an asset worth a lot of money, you know, and we've got that system set up in place. So non entrepreneurs, they burn through their cash before they get to the next stage.
Adam Mogelonsky: Well, the, the seasonality issue has existed for a hundred years, let's say, or longer, and I'm wondering what strategies to tie it into what, what may come ahead for next year. What strategies would you advise hotels to look at for building out that shoulder season or developing off, off peak programs that can drive occupancy?
Mark Hope: Two quick stories. Last month I took my wife to Charlottetown PEI. We went out to Avalia to see Anne of Green Gables. Pulled into Avalia Village. Eight restaurants, one was open. Eight stores, two were open. And I went up and said, what? And they said, oh, we're, we're literally all students and they go back to school last week, so we'll [00:28:00] be closed by the end of next week. That's not a good business plan, you know, is that? But I also go back to the mid 80s when I kind of started, Banff Springs. They go recruit everybody from eastern Canada. You bring them out, have them work in deplorable conditions. Kids couldn't afford to go home because they paid their airfare or train, whatever the case is, right? You can't do that anymore because of the globalization of the world. But, you know, We do set incentives and targets for that.
We do recruit and we don't recruit just through newspapers. I mean, we're out on the street. We will go to trade schools. We'll go across the country, whatever the case is. Um, we bring co op students in from some of the Eastern universities. We don't have one strategy. We've got dozens and the strategies that work in Vancouver don't necessarily work in Edmonton or vice versa. You know, so you've really got to be mindful, but you also have to have a good place to work. You want people. It's about the culture. It's about, as much as you want to work 8 to 5 Monday to Friday, you want to have fun. You know, you want to enjoy yourself. You want to show that, at the end of the day, I can stand in front of a mirror and say, Hey, I made a difference today. I did good.[00:29:00] And that doesn't mean, that's from a housekeeper up to the general manager.
Adam Mogelonsky: Do you have any, uh, just to unpack that seasonality some more, do you use any business intelligence software that would really show you what that seasonality looks like and how best to modulate labor accordingly so you're not running too far into the red?
Mark Hope: We did, I'm not going to say it's electronic. I mean, yes, we use Dayforce, we use some other different softwares, but it's intuition and it's historical trend.
We know when we write our budget, what our numbers are. That we're going to run 90 percent May, June, July, August, September. Yes, our rate's going to go down in October, but we're going to run 90 percent still. Okay I'll give you one that hurt us last week. Uh, National Reconciliation Day, September 30th. It hurt us because it was a Monday, and a week later, what do we have? Thanksgiving Monday. As you know, when you have a stat holiday, corporate travel stops for the week. No, and it's hard. So having one in a month, so kind of okay, but having two back to back really hurt. And we watch that because we have to pay, you [00:30:00] know, statutory pay. We have to, you know, time and a half, double time, depending if it's non union property. We watch our labor. And again, housekeeping, not so much, but I would say restaurants, if the volume's not there, you send them home after a four hour shift instead of six or eight hours. And you don't like to do that because they need money to survive to pay their bills. Right. We know what
our staffs, who they are, what their hours are, if they need full time, if they need part time. and yes, in a union environment, it's all based on tenure, who gets the first shot. But in a non union environment, you work with your staff. You know when, oh, she's going to need to be at home anyway because she's got daycare, or she's got nobody for daycare on that holiday Monday. That kind of helps us to our benefit as such. And you actually have people in a hotel that go, it's slow, can I go home today? No one argues. Thank you very much. You know, you just saved us X. So, but again, that's part of the culture. It's part of knowing who your, your staff are, and knowing who your, your, your supervisors and managers are, so that they can talk to each other.
Adam Mogelonsky: do you think, uh, the whole idea there about more flexible hours, do you think? COVID has [00:31:00] helped with that in terms of post COVID the structure is more tolerant of this flexibility. Mm
Mark Hope: More tolerant, but it's also frustrating. And our central reservations clerks, to give you an example, so up until two years ago, they worked in an office downtown. You know, it didn't matter if it was a 7 to 3 shift, or 3 to 11, whatever the case was. Bye. One that worked, let's say, from 7 to 11 or 7 till 3.
They'd probably get up at 30, shave, shower, put on some nice clothes, drive down to the office, work from 7 till 3, drive home. So they're really starting from 5 till, let's say, 5 o'clock. Now they get up at 5, 10 to 7, walk in the kitchen, flip on a coffeemaker, get a cup of coffee because they're not on screen like this, they're on the phone, start taking calls at 7, finished at 3. They just got two to four hours back, plus they didn't have to pay for parking, didn't have to pay for gas to get there, or transportation to get to the office, didn't have to dress, you know, they could just be in jeans and like Iron Man jeans and a t shirt. I just got off a [00:32:00] plane. But anyway, it's, changed for the better for the employee there, but when I'm downtown in the office, I go to look for people, oh, she's working from home today. We lose part of the culture because it was always good that you could have an ad hoc meeting. Can't do that anymore. You know, oh, they're agreeing on teams, so we can call him, oh, he's not available. Where I go downtown, I'd be sitting and, you know, the CFO's on his phone, I'd just stand outside of his office until he hangs up his phone, and then walk in and sit down. You can't do that anymore. And I think it's, for work life balance for a lot of people, it's been really good. For culture, it's been middle of the road as such. I mean, I did present check presentations the other week, for two charities for a golf tournament and told everybody who wanted me in the office, oh, we got 30 people, okay, out of 90. The next day was our Thanksgiving lunch. We got 50 people out of 90 because it was free lunch. How do you make it? I mean, you want everybody to be there for everything, but it doesn't make sense anymore. And people have now changed their lives in regards to their daycare and their family planning [00:33:00] around the new hybrid environment. So, I mean, I go downtown Vancouver, downtown Calgary, and I look around and go, wow. I mean, it's not just us in the hotel industry, it's all the industries have changed dramatically.
Adam Mogelonsky: yeah, it's interesting that it's changed so fast and it still is changing. And it is
Mark Hope: The new normal, we're not there yet.
Adam Mogelonsky: the newer normal.
Mark Hope: Yeah, it's going to keep on going up each year.
Adam Mogelonsky: Well, just to close out with a hypothesis, a hypothesis question is, if this is changing in all these industries and we're constantly in this new or normal, do you see any opportunities for hotels or hotel vendors to better accommodate this more flexible structure of hybrid work? Hmm.
Mark Hope: Yes, because you already see it in hotels where we've all dabbled in video conferencing for 20 years. Now we get meetings where 20 people are in the, in the hotels, 20 people are on Microsoft Teams or Zoom on screens, right? Hotels have had to accommodate that. That's not cheap. AV is not [00:34:00] a cheap proposition to bring that in because you can't put little 16 inch screens.
You need fairly big screens, mobile microphones and cameras so that you're seeing everybody and what's happening. So that's a part of it. You're seeing hotels start to segment different. Oh, I'm going to be a wellness hotel. I'm going to I'm going to be an experiential hotel. You know, again, you know the roadside mom and pop 60, 90, 120 rooms.
That's what they always are. Other than good, clean, solid accommodation thing. But when you're talking downtown Vancouver, Toronto, New York, doesn't matter. How to differentiate yourself in the competition and it's by unfortunately, I hate to say this, Offering a different person to a different thing to a different person on a different day. And I hate saying you have to be all things for all people because you can't. So you have to find the niche.
Adam Mogelonsky: And, uh, just to close out one final question, um, to tell all the listeners here, what would you say is the elevator pitch for Coast's niche?
Mark Hope: we're a network of hotels that's not cookie cutter. You will get the same service standards, you'll get the same amenities, you'll get the same rewards [00:35:00] program. But you'll get a different experience. Depending on the city, it's a log frame building. It's a high rise building, it's a low rise. We cater to within the community.
You know, and I'm not being belittling any of my competition, but certain other brands, if it's XYZ brand in Prince Rupert, it's exactly the same in Pentic and exactly the same in Toronto. We're different. We're in the communities. And we celebrate people. One of our taglines is real people.
Because a hotel's a hotel, a bed's a bed, the difference is the people that work in it.
Adam Mogelonsky: Yeah, that's probably the, axiom of the industry right there.
Mark Hope: Yeah. A lot of people don't know that, though, or don't understand that. Yeah. How do you differentiate yourself? Like I said, and the only way you can truly, sure, you can have superior product. But the way to truly differentiate yourself is the people.
Adam Mogelonsky: Jason, any final thoughts before we, uh,
close out? Yes.
Jason Emanis: It's a little out of my element. I'm on the other side. I grew up on the vendor side. So it's very interesting. So I've [00:36:00] learned a lot. I've done a couple of these. So I've learned a lot. I appreciate it.
Mark Hope: you know, you use the word vendor and I want to make sure you understand if they're a vendor to me, they better be a partner. It's got to be a win win on both sides.
We can't be buying product and that's all, you know,
Jason Emanis: yeah. How iHotelier? I'm just curious.
Mark Hope: Uh, we installed during COVID,
Jason Emanis: Oh,
okay. So
relatively, relatively recent. Yeah.
Yeah. So I work for the folks that built that. The original. And they're very customer centric and they ended up selling, you know, and then creating another CRS. So as you were talking about your relationships with your vendors, I lived it for six years, and it's a difficult decision for a CEO of sales to keep salespeople on a gig after it's been sold. We did. We chose to do that. Our salespeople were kind of wired that way anyway. And it proved a good ROI because [00:37:00] those clients were always references for those salespeople for the next one.
Mark Hope: Yeah.
But you know what the important factor is? The salesperson signs the deal, gets his commission, whatever, great, three, six, nine months from now, pick up the phone and say, how? How'd everything work? Are you happy? But some and some salespeople do, don't get me wrong, but other ones, I've got my money, I can't sell you anything, I'll say they move on.
Jason Emanis: Yeah.
Mark Hope: I don't like those.
Jason Emanis: I understand.
Adam Mogelonsky: Mark, can't thank you enough for coming on. This has just been a fantastic conversation. We covered a lot of ground and you gave us some just incredible answers. Very thoughtful. Thank you so much.
Mark Hope: No, thank you for having me, do very much appreciate it.
Jason Emanis: Thank you, Mark.
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