The Next Wave in Hospitality: Redefining Hotels for the Experience Economy - Bill Graf, ONDA

Josiah: One of my favorite things about Hospitality Daily is how it connects us with people who are pushing the industry forward. And today's guest is a perfect example of that. A few weeks ago, Bashar Wali joined the show to discuss the next wave of innovation in hospitality. I'll link to that episode in the show notes if you missed it. But after it aired, I received one of the most thoughtful and detailed responses I've ever seen from today's guest, Bill Graff, and I knew I had to bring him on the show. Bill is the founder and CEO of ONDA, a new hospitality brand that blends the social experience of hostels with the comfort of boutique hotels. In this episode, you'll hear how a trip through Asia inspired him to leave a career in finance and launch a new type of property that focuses on creating both community and comfort. Their first location in Costa Rica has earned incredible reviews. I'll link to it in the show notes as well, but today, I want you to hear Bill's insights on where hospitality might be headed next. Specifically, we dive into the opportunities around guest experience, a topic that's often discussed, but rarely with the level of detail that Bill brings to the table. If you want to jump to specific topics in my conversation with Bill here, you can use the timestamps in the show notes or the chapters feature in your podcast player, but I encourage you to listen to the full conversation to get a deeper understanding of what the future of hospitality could hold. So, without further ado, here's my conversation with Bill. 

[intro]

Josiah: I would love our listeners to get to know you and get a little bit of context. I wonder if you could share with our listeners a little bit about your business, what you're working on, and then kind of what led you in your life and your career up into this moment. And we're going to use kind of a bulk of our conversation talking about some pretty big picture stuff, but I want our listeners to understand this isn't just theory, you're running a business, you have an operation, you have very happy guests. And we're going to keep this, we're going to talk about big ideas, but we're going to try to make it as tactical and kind of real as possible. So with that being said, I wonder if you could share with our listeners a little bit about kind of your business and what led you to your work today.

Bill: Yeah, I mean, I think the context here is very important. You know, my sister's joke that I refer to myself as like an international hotelier being from, you know, Wisconsin, as far from kind of a true international destination as you can be, you know, we grew up going on vacations to like the field of dreams field in Iowa, going to, you know, Disney world was our big tree. We were not international travelers by any stretch of the imagination. I didn't think I even really left the United States until I went back right into Europe, uh, in college and ultimately you know, study abroad. Anyway, we didn't do a ton of travel. I guess what I'm getting at here is sort of a non-traditional background for somebody who is now building and growing a chain of hotels focused exclusively on places that are not the United States. And so I worked in finance. My background is in mergers and acquisitions advisory. I worked on a restaurant retail group where we advise large franchisors and franchisees, mostly fast food concepts. So these are a hundred plus location operators. I then got a job in San Francisco working for private equity fund. And between those jobs, I took two weeks to go to Southeast Asia. And I would argue that this was really the genesis of where I am today. I wouldn't be standing here had I not gone on that trip. And so started and flew over, I remember vividly flying to Tokyo. And I'd always wanted to stay at the Park Hyatt where they filmed Lost in Translation. I started at the Park Hyatt and I went up and I got my $100 whiskey at the New York bar and had a blast. And then when flew to Bangkok, and stayed at a lovely hotel in Bangkok called the Labua. And on the advice of a friend, he's like, he's like, look, I get in your Mr. Investment Banker and you're moving to San Francisco. He's like, yeah, I know you. He's like, you should try staying in a hostel. And I said, yeah, I I've stayed in hostels when I studied abroad. He's like, but you're doing it by yourself. I said no. And so on suggestion of a friend, I very much got off the beaten path and found myself on this little island called Koh Tao in Thailand. And I stayed at like the cheapest, I think I opened up hostel world. And I remember I booked it like nine months in advance. This was my two week vacation between finance jobs, you get no time off. And I walked out in my chewing, rolling suitcase and I'm walking up to this hostel in Koh Tao, Thailand. And like the two Irish guys running it, set their beers down and like applause. Like, you're the guy, you're the guy who booked nine months out. Oh my God, you're finally here. We've been talking about this. And, you know, needless to say, I had the best time of my life and don't get me wrong. The park, I was lovely. The blue were lovely in their own ways. It was a very different experience. We could talk about this dynamic, passive experience versus the active experience in more detail later on. But it was that week at the like, it literally, I think it was $4 a night, the shower was a bucket, you know, this place on the comfort scale was all the way down at the bottom, the praise skills all the way down on the bottom. But from an experience standpoint, it was unlike anything I had ever experienced before in my whole life. And that's when this light bulb went off. And I was like, Oh, my God, I had that that like, this epiphany or this moment of panic, where I'm thinking to myself, I've been doing it wrong. And all my friends have been doing it wrong. Like there's this whole different way to go about this. And it is not checking into the Park Hyatt Tokyo for a week. And again, not to rag on that it's it's interesting in its own way. And so the light bulb went off, I had a fantastic two weeks, which at the time I thought was like the most time that anybody would ever get for a vacation ever. And then I was super disappointed to find out that a lot of the other people there were on a gap year. And I had never heard of a gap year, right? I'm sure everybody knows what that is now. But if you don't, it's like when you take a year off between high school and college or college and a job to just go travel and find yourself and kind of do a prolonged eat, pray, love thing. And as soon as I heard that, I was like, oh, you can do that? You know, again, Madison, Wisconsin, Bill, this was not on my radar. Like nobody had ever told me that this was a life option. And I'm like, I got to do that, you know, and at the point at that point, I was like 26 or 27 working in finance, like between job like very much not in the target down below for a gap year, but I'm like, I'm doing it and I got to do it before I turn 30. So moved to San Francisco, worked for this private equity fund. They kind of sat me down. It was like the point in my career where I was supposed to go to business school. I was taking the GMAT. What am I going to do? And I was like, look, I'll stay at this fund. I like it here. I just need my gap here. I told you guys this. And they're rolling their eyes like, Billy, you're 30. You should be getting married and buying a house and settling down. I'm like, no, but I want to go to Southeast Asia and buy a motorbike. That's really what I want to do. And unsurprisingly, they could not accommodate my gap year request. And so we parted ways very amicably, and I left to go travel for what I thought was going to be three months, and it kind of turned into six months. And I think it ultimately turned into about nine months all over the world, but mostly in Southeast Asia. And I finally got that experience that I was looking for. And, but it was on that trip, you know, I found myself bouncing between hostels and hotels. Now I would do like a couple of days at a hostel, then at a hotel, a couple of days back at a hostel. And I was really frustrated, right? I found myself having to choose between being social or being comfortable, right? Am I going to be community, have community or be comfortable? And it's not a fun decision to make. I'm sitting there going, why is there not a place that checks all of these boxes? And again, I filed that away, and at the time I'm going, well, how many people are there out there pushing 30 who want to bounce, you know, that have a million Sheridan points or Starwood points saved up and are bouncing between, you know, Park Hyatt's and Backpacker hostels? And this is a very small target download, but most of the people in these hostels and stuff are very happy, and most of the people at Park Hyatt are very happy, and there are very few people bouncing back and forth. And then COVID changed all that, right? Coming out of COVID, I think there's a lot of people now who are more like I was 10 years ago, and they've got their job and they can work remotely and they got this flexibility. And they are finding themselves wanting to travel and go see these beautiful places and have these amazing experiences. But they've got this pain point. Am I going to be comfortable? Or am I going to have community? And that's what led to the founding of my company ONDA, right? We're trying to build a new hospitality concept that sits kind of in the middle of a hostel and a hotel, you know, almost like what fast casual did for dining, we're trying to do for hospitality. And so I went down to Costa Rica in 2012. 20, I guess, November of 2020, as soon as you could start traveling. As soon as they opened their borders during COVID, we bought an out of business, like nine room hotel just to see, you know, can we do this? Can I actually like close a real estate deal, renovate a property, open a property, market the property, fill the property up, have people actually pay me money to stay at this property and then actually like the experience we're delivering. I mean, it was proof of concept. I don't know if you want to call it an MVP or a prototype or whatever. And it worked and people loved it. And it was like this new in-between thing that had, you know, many of the comforts of a three or four star hotel, but with the community of, and the experience of a hostel. And so we've since doubled the size of that hotel. We acquired a second property in Costa Rica that we are in the process of renovating. And the goal is to grow to 10 locations in Costa Rica before moving on to other countries.

Josiah: Amazing. I will include a link in the show notes where people can learn more about this bill. But thank you for that context. And I want to talk now about some big picture stuff that's going on. I mentioned to you before we started recording, I feel like you and I should record a masterclass on how to reach out. You know, anyone listening that wants to appear on this show, you've done the best job of anybody I've met because You connected with an idea that Bashar Wali had shared about the next wave of innovation in hospitality, talked about Hospitality 3.0. And why I love this show is it connects us with each other. It moves the industry forward. It helps us think about big ideas. And that is what I know you and I are going to be able to get to in our conversation. But you put together a lot of stuff that I found really interesting. You shared on LinkedIn. I'll include some links in the show notes to some of your writing around this. But maybe as a jumping off point, I would love to kind of get your thoughts a little bit on what stood out to you hearing Bashar Wali talk about the next wave of innovation in hospitality. I think that is what initially connected us. And I'm kind of curious, you know, what stood out to you from what he had shared?

Bill: Yeah, I mean, look, I think he's right. I think he's he's spot on. And she summarized it, you know, he's been at this a way longer than I have. And it's unsurprising that he was able to explain what he's seeing, you know, and kind of what I'm seeing in a way that was significantly more succinct than than I ever could. Right. And he at a very high level talked about hospitality 1.0 being the very large kind of legacy operators, the Sheraton's, the Hyatt's, the Hilton's that everybody knows. Hospitality 2.0 being the wave of boutique concepts that kind of started and matured in that mid to late 80s. And then we're now on this wave of hospitality 3.0. And his argument was that Hospitality 3.0 really will be focused on serving underserved niches, right? And he said, so he's like, you know, the world doesn't need a 50th brand like a Hilton or Hyatt or something like that. You've got to go out. He used an example, I think, of the Graduate Hotel being a great example of, you know, parents going to college campuses and being forced to stay at sort of garbage hotels. And that was a niche. You know, I had a conversation a few weeks ago with the founder of LOGE Camps, and he was, you know, they've got a very special niche that they serve. And I think it's really interesting. I mean, I think that's what we're going to see at a very high level is concepts that are designed for niche and niches. If you look at the big hotels, right? I mean, the big hotel operating model was really designed, came into being post-World War II and designed for large properties. Think 200 plus keys, maybe 150 plus keys. If you've got buildings that are that large, you need to cast a very, very wide net. You know, those properties need to be broadly applicable or inoffensive, however you put it, right? There's a reason why usually in the marketing pictures for big hotels like that, they're on people. They want anybody looking at those pictures to be able to picture themselves at that hotel so that you have business people staying there and families and people on their honeymoon. And as a result, they end up being a perfect hotel for nobody, in my opinion. And I think that's what we're going to see with Hospitality 3.0 is that technology has gotten us to a point where you can be a bit more creative, be a bit more targeted, build out a hospitality concept that has an opinion, is designed for a certain group of people, and as a result is not designed for certain groups of people. And that's okay. You're going to deliver a better experience to a niche audience. And that's what I'm really excited about. I mean, obviously my concept is aimed at a particular niche. I'm not saying that I think it's the only concept or the winning concept. Hospitality is one of, if not the oldest industries in the world. This is not a winner take all market. And frankly, I'm just very excited to be here looking around at all the innovative concepts that are coming up around me and having the opportunity to hopefully to collaborate with other founders and other leaders so that we can share best practices, right? And we're not really competing with one another. I think we are very much trying to show people that there is a different way to trout, right? And that different way is going to be very unique to each person.

Josiah: Right. And I mean, I think to that point, the more specific you are about the problems you're solving or the opportunities that you see, the more opportunities that emerge from that. I actually wonder if we could add a little bit of color to this conversation by talking about what happened over the past, I don't know, 70 or so years as it relates to fast food and then fast casual. because I think it speaks to what's been going on in the culture. And obviously, some, you know, food is kind of in the broader hospitality world. But just to kind of paint the picture in a little more detail, I would love to kind of get your thoughts on that, because you shared some interesting things around that I think our listeners might appreciate as they think about this.

Bill: Yeah, and I'll caveat this by saying, you know, my opinions are very heavily and I am an American building a concept in international geography, right? So when I talk, it may not be universally applicable, it's probably not as applicable to an American business operating in the United States, selling their rooms to Americans. So with that caveat out of the way, I will charge forward. You know, what I see in the geography where we operate in many international geographies is that you've got this bifurcation. You've got a lot of very expensive luxury concepts designed for international, you know, foreign tourists, for Americans coming to these international places. And then you've got a lot of budget accommodation options designed for national tourists. And there's not very much going on in the middle. And I, for the longest time I tried, I couldn't wrap my brain around it. I'm like, why are we not seeing anything in the middle? Why are we not seeing anything in the middle? And then it hit me. And I actually think that what you're going to see hospitality go through in the next, I don't know, five or 10 years is going to have very, it's got a lot of similarities to something that happened in the dining industry a long time ago, as you said, about 70 years ago. And if you go back, you know, I said, hospitality is one of the oldest industries in the world. I think restaurants are right up there as well. We've had restaurants for a very, very, very long time. If you go back prior to World War Two, give or take, there were restaurants, but the use case was very different. These tended to be full-service establishments, often kind of fine dining, and they were reserved for special occasions. The world pre-World War Two was not one in which people were eating three meals a day out of home. That was sort of absurd, right? And I think if you had suggested that to somebody back in the 20s, or the 30s, they were thought you were insane, like there wasn't enough time in the day to go have three full sit down meals. And they had a very specific idea of what it meant to go out to eat somewhere. Coming out of World War II, we had some social changes, like the prevalence of dual income households and the ubiquity of the automobile. And those social changes resulted in changing consumption habits. People needed different things than they did before. out of that was born fast food, right? But if you again, if you go back to the 20s or 30s, and explain that, oh, yeah, you know, someday, people are going to be driving around in their cars, and they're going to go to a restaurant, and like, they're not even going to get out of the car, and they're gonna hand you the sandwich, and then they're gonna be in the car eating the sandwich, like, people would have thought you were insane. Fast forward that, and now I believe in the mid 80s it flipped around so that now more meals are consumed out of home than in home, right? And this idea of like, we eat on the go all the time. For most people listening, my guess is that a home cooked meal is the exception rather than the rule. And you're sitting there going, OK, Bill, that's a really interesting history lesson in dining. What does this have to do with hotels? And my argument is this. I sat there. I've been working on this project in Costa Rica for four years going, why are there more things in the middle? Why are there more things in the middle? And I think it boils down to this. International travel for most Americans was a special occasion thing. It's the kind of thing that you do every few years, or it was reserved only for the wealthy. Think about it. If you're going to go with your significant other on a romantic vacation, and you go to an international destination once every two or three years, and you're only going for a week, you want that to be special, right? I mean, that is a splurge. You want to stay at the nicest place you possibly can, in the same way that if you're going out to an anniversary dinner, you don't go to McDonald's, you find one of the nicer restaurants in the city that you live or wherever you're visiting, and you go to that really nice restaurant. That's the use case. And What I think is happening, right, similarly to how dining, we have these social changes, like the automobile and the dual income households, coming out of COVID, we've got massive social change, right? You've got work remote policies where people have more geographic flexibility than they ever have. If you take that and you layer on top the availability of cheap airfare, and then you know, smartphone, excuse me, smartphones, plus cheap data everywhere in the world, You've got a recipe for changing consumption habits. The problem is the infrastructure hasn't changed, right? In the markets where I operate, all the attention, all the investment dollars are on, I think as you put it, our projects for rich people. The investment, everything is lagging behind. They're not looking forward, they're looking in the rear view mirror. And you've got this completely new use case where you've got, and I'm going to use the word very broadly, you get these digital nomads who are combining work and travel. They are traveling internationally more than ever, and when they travel internationally, it is not a splurge vacation for seven nights. They are trying to travel internationally for two or three months at a time, if not more. In the same way you wouldn't go to eat at a Michelin star restaurant three meals a day, seven days a week, you're not going to go stay at the Four Seasons for three months, even if you can afford to. It's just a different use case. I think we're going to see in hospitality something similar to fast food or fast casual more likely crop up. These are brands designed for the mass affluent. They're brands designed for people who have a different use case than a luxury hotel. And from where I'm standing, there isn't a tremendous amount of attention or investment dollars being paid to this segment of the market. And I think when we look back on this, people are going to say, wow, it seems so obvious in retrospect. How did we not see that ahead of time? So long story short, I think there's a massive opportunity here to be one of the first movers in this segment of the market.

Josiah: Let's talk a little bit more about this. I think I want to kind of get into what you're doing, but I want to talk a little bit more on kind of like Hospitality 3.0, if you will. And actually, before we get into that, let's talk a little bit about Hospitality 2.0, how it's matured. There were people like Bill Kimpton, like Ian Schrager, and Chip Conley, who built these. you know, Kimpton and then Joie de Vivre and these kind of lifestyle hotels early in the 80s and 90s, accelerating into the 2000s. And they were trying to cater to people that wanted more of an experience, right? That was kind of the reason for creating these brands. And they tried to, I think, you know, Chip Connelly famously with Joie de Vivre, you know, tried to create hotels around magazines. In your view, kind of the culture, what's going on in society, you know, kind of What has kind of transitioned from that world into maybe a world where there's new opportunities? And if I'm hearing you right, maybe even an opportunity for more segmentation or more precise subsegments of society. Yeah, exactly.

Bill: So the way that I think about this, right, and to take a 30,000 foot view, What we just talked about, this kind of fast, casual, and hospitality thing, you can make that like the vertical axis on a graph, right? Where you've got expensive concepts on the top of the axis and cheaper concepts down on the bottom. And on the left side of the x-axis, you've got passive experiences. And on the right side, you've got active experiences. And what we're seeing most of the activity, I think, is in that top left quadrant, right? These are these are expensive, passive concepts. And so regardless of price point, I think across price points, whether you're budget, mid-range or luxury, there is a push to move from a passive experience to an active experience. I think this is a natural progression. Anybody who's been on my LinkedIn in the last week has probably seen me reference a Harvard Business Review article called Welcome to the Experienced Economy. This is not a new article. I think it's at least 25 years old at this point. But if you haven't read it, I think it's worth a read. And it talks about the progression, the natural progression they see in the economy of commodities being surpassed by goods. then services, then experiences. And my argument here is that hospitality is really sort of stuck in that services mentality. And it's been stuck that way for a very long time. I think you're right. I think the boutique operators of the 80s and the 90s, you know, were the first ones to say, wait a minute, let's elevate this. I mean, they've definitely taken a step in the right direction. It's more of an experience. I think it's still relatively passive. And I think That's what you've seen, I don't know how far this goes back, you know, call it 15 years. People are looking for their tribe, right? I think you're sort of seeing this rise in parallel with the ubiquity of the smartphone, right? We are more connected than ever in theory, but in practice, I think people are left feeling more disconnected than ever. That sure, you've got all this connection in your phone, but that we don't ever really get any authentic outside of our phone connection. And you see this desire for authentic connection in a lot of different places. You know, like the rise of music festivals would be a really big one. These are not new things. Music festivals have been around for 60, 70 years at this point. And in the United States, at least, they kind of went away. And then in the mid-2000s, they had a resurgence. Burning Man is another example. Again, it's not a new thing, but it's definitely a bit more in the spotlight. It's a very participatory, active event. You're seeing this shift from service to experiences in dining. Taking the ultra high end of fine dining, you know, two restaurants in the San Francisco area, right? You've got the French Laundry, which at one point in time, I think was the best restaurant in the world for a handful of years, which is more of that traditional service mindset. And then you've got kind of newer upstarts, and I use the word loosely here, like Lazy Bear, right? I don't know if anybody's ever been to Lazy Bear. It's also I think when it was a two Michelin star restaurant, it may have gotten its third star. But when they're every is the experience of an elevated dinner party, right? They do two seatings a night, and you come in and they put everybody together and there's a cocktail hour and you get to stand and you get to watch the first seating down below and you mingle and then like, they will separate groups and they put you at two big long picnic tables. And you are supposed to mix and mingle and talk to the other people that you did not, you know, show up to dinner with. I think that's just a great example of this shift to the experience mindset. You know, we're not getting these community-focused interactive experiences as much in other parts of our lives. And so we're seeking them out more than ever.

Josiah: Bill, if we could, if we could, I actually want to push further into this concept because some people are going to hear experience. They're going to say, everybody's talked about experiences for a while. We have, but I don't think we're being as specific as we could be. So I appreciate what you've shared, but I want to push further into this because you actually have written about the four realms of experience. And I think, I think it's good for us. I think without specificity, it can just sound like a buzzword. And I think what you've described is true, there is this big shift happening, but you have precision around this that I am not hearing from others. And so I wonder if you could share with our listeners these four realms of experience that you're observing.

Bill: Absolutely. And again, this is lifted directly from Welcome to the Experience account. I want to make it very clear, I'm not taking credit for this. And this has been super helpful for me, right? I say this to people all the time, that everything is going to being more experience focused and the sort of cynics on the other side of the table are like, well, everything's an experience. Going to McDonald's is an experience. Kelton is an experience. And that's true, right? And this article in HBR called Welcome to the Experience Economy has a good way to think about this. So their framework is along the x-axis is participation. On the left side, it's passive participation. On the right side, it's active participation. And then on the y-axis, the top is absorption, where you're sitting back and you're kind of taking something in. And then at the bottom is immersion, where you're actually surrounded by it and enveloped by it. And the argument that I make is that you've got these four quadrants, right? And so like the top left, the absorption, passive, we call that entertainment. That's like going to see a movie. The top right is absorption, but active. That's educational, right? That would be like taking a surf lesson. The bottom left is aesthetic, which is passive immersive, where you're surrounded by something very beautiful. I would almost say that that's like going to like a rainforest cafe or something is a really cliche example. And then the bottom right is escapist. OK, so that is fully immersed, active participation. In my world, that would be, you know, making a friend, renting a Land Rover, and like getting lost in the jungle. You know what I mean? Like, you are in it, you are in the thick of it. And from where I'm sitting, I think that's what we should be shooting for. That's what people, that bottom right escapist corner is what people are looking for. And that they're not getting, you know, traditional hospitality concepts, I think, do a very good job of delivering the entertainment experiences, right? That could be sitting in the hotel bar listening to a musician play. They're good at doing the aesthetic. You know, you go and you stay at the Banyan Tree Koh Samui and it's beautiful. There's an infinity pool and you sit there and you have your cocktail and stuff. What you're not getting from the hospitality 2.0 operators and definitely not from the hospitality 1.0 operators are the educational aspects of an experience and the escapist aspects of an experience. Those are the two aspects that hospitality 3.0 very much is going to focus on. Again, using an example that I referenced earlier is lodge camps. I would argue that that's very firmly in the escapist realm of experience. You are actively participating in something that you're fully immersed in, right? If you're out there and you're camping and you're in the wilderness, you are doing, you know, you are an active participant in this. You can be kind of modifying the outcome. You're not just sitting there passively taking in a ride, for example. I think that's why you see, you know, Burning Man is probably the best example of an escapist experience, right? It is built on active participation, right? Like a normal music festival would be more of that entertainment or maybe even like aesthetic. Getting down to that bottom right corner is really, really hard. And that's where everybody's pushing. And I'm really excited to see kind of where we go and all the different ways that we get people there.

Josiah: I'm really curious about kind of what is it in our culture, society, you know, in the water that is making this so important? You know, you and I wanted to jam and brainstorm around opportunities ahead in hospitality. You know, there's been interesting entrepreneurs in the past. It seems like there's new opportunities ahead of us. But specifically in this area of experience, kind of what do you think is happening in culture that makes this present such a big opportunity?

Bill: Yeah, I mean, I think service has become commoditized. I think we've, you know, we've kind of become desensitized to it. Everybody knows what good service looks like in a hospitality setting. And most people kind of in that mass affluent bucket that we're going after, at least, they've seen it a million times. And you know, I'll pick down some hospitality 1.0 operators, and I'll proactively apologize for doing this. How many times, you know, we talked about, you know, it was one thing, actually, that Bashar said, you know, he talked about going to a new hotel, and the front desk guy could have done a different job of receiving him. You know, for example, he had a pre-canned wine, Bashar just said, you know, you could tell it's the exact same wine that he gives to everybody else. And it would have been a lot better if he had delivered some, you know, kind of bespoke wine. My argument here is that I think kind of the hospitality 3.0 traveler doesn't care. Like we've grown up, we know it's inauthentic. Like we've grown up with like, you know, technology everywhere where you've got this mass personalization, mass customization, where brands are really good at feigning an authentic connection, right? Everything is customized, your display ads, you know, things follow you around the internet. They've got those magic bands at Disney World right now. And it's got your name and your age, whatever, and your kid can go up and finding Nemo knows your kid, like, we know the trick we've seen behind the curtain. And it's cool and it's a novelty, but it doesn't hit that same spot in your brain that like making a friend, but like you're there and this is authentic. This is another person that is interacting with me because this is what they want to be doing. They're choosing to do it. They're not being paid to interact with me. You know, it's not like shutting up the bartender who kind of has to be nice to you. If you sit down, for example, at the bar at ONDA and one of our neighbors, like Javi comes over, he's a local surfer and he sits down and he has a beer with you, it's because he wants to be talking to you. And that exchange is going to be really interesting because you are going to learn, you're going to get a completely unfiltered view of the place that you're traveling to and the people who live there and how they live. And maybe the next day you end up going out surfing with Javi and he takes you to a really cool secret break or he, you know, he takes you in the estuary on a kayak or something like that.

Josiah: If I could just jump in, because I think you're onto something, but I think, Pearson, your take on this, I feel like personalization, that recognition, the personalization, the ability to customize is still important, but maybe it becomes a baseline. And I feel like I talked to- It's table stakes.

Bill: It's table stakes, right? It's table stakes. I don't want to suggest you just can't do it. Sorry. You still have to do it, but you don't get any credit for it.

Josiah: But this is an interesting point though, because I feel like there's still a lot of hospitality folks that don't even have those table stakes in order. So it's like, you got to do that. This is table stakes just to move forward, to pass go.

Bill: It's funny because when I talk to people unfamiliar with my concepts, like when I go to talk to an investor about our concept, we're a tech-enabled operator. And I'd always said that with pride. And it wasn't until recently I had a conversation with a venture capitalist and he's like, he's like, dude, when I see that, my eyes roll so far back to my head. He goes, everybody's tech. He's like, what does that mean? You license the same property management software. He's like, you're using Muse and Lightspeed and Sightminer and now you're tech enabled. Everybody, every 15 key hotel, all you. And he looked at me, he goes, that is table stakes. You know, if you're doing something beyond that, you need to tell me that because when you say tech enabled, that's what I'm picturing. And I think that applies to the experience as well. And this isn't meant to be a knock on any of the other hospitality operators. We've gotten really good at delivering really good services at scale. And I think that's what leads to some of this kind of the art project for rich people stuff that you were talking about, where if you can't differentiate on your service, and if you haven't started leaning into the experience yet, then you start differentiating on things like architecture design, which are very meaningful, and decor. And my argument is like, okay, but good decor at Hotel A versus good decor at Hotel B, like they kind of all have it. And again, it's table stakes. I'm not saying it's easy or cheap. I recognize that it can be difficult and expensive. My argument, you know, as somebody who is investing in hospitality concepts is that I actually think you'll get more bang for your buck investing in experience. Going all the way back to something I said at the beginning of our recording here, the best experience, you know, set aside the comfort, set aside the architecture and all the rest of that stuff. The best experience I ever had was at that $4 a night hostel in Koh Tao. You know, hostels really do have to lean into the experience because everybody knows when you're staying at a hostel, you're not getting, you're probably not even getting good service. It's probably very much self-service. It's probably not very comfortable. That's the one thing they have going for them, right? And it's not expensive to roll out. It's really hard to scale, but it's not expensive. And I think that's what gets me the most excited is who's going to figure out how to deliver novel experiences, right, that result in a truly differentiated state. Not just, you know, oh, my pillows are blue or my pillows are red or my pillows, you know, came from, you know, designer, whoever. how do we figure out how to almost commoditize experience? Because that will happen, right? If you go all the way back to the HBR article, as we progress up this ladder, eventually experience will be commoditized and the next step on the ladder is transformation, you know? And then my question is, are there concepts that are already dabbling in transformation?

Josiah: And I think there are, I mean, sorry, go ahead. I want to kind of just, so this is fascinating to me. I'm just kind of thinking about, okay, personalization, recognition, customization, you know, table stakes, you got to have good tech. And then you got to move forward into experience. What you're getting at is super interesting to me. And I want to kind of sum up like how we've been talking about the opportunity here, because I'm interested, where is that edge of innovation for the hospitality entrepreneurs, the builders out there, they're going to create the next wave of hospitality we all enjoy. I've got to think about where that is. You know, you talk about, you know, large hotel properties kind of have to appeal to everyone because they're so big. So it feels like maybe kind of more smaller focused concepts allow you to get into something that you've kind of shared throughout our conversation is, you know, addressing the needs of of a specific group of people that you know, their pain points, and you can create something really unique to them. You know, Bashar Wali talked about that, you kind of talked about all the different concepts that are emerging. Now, I'm excited by this, because I feel like, you know, I want to come back to what you're saying here, but to create experiences that are meaningful, and then to get into transformation, what you just shared you have to know, who is this group of people? What are they trying to achieve? What are the pain points they have? Because transformation can't happen the same way for everybody, right? By definition, it has to be solving a specific problem for a specific group of people. And I wonder if we could kind of tie this all up by, you know, giving practical examples of what you've seen, Because I look at the online guest reviews across websites, you know, for the property you have open, people love it. Right. So I guess, like, how would you say you're kind of taking people on this, you know, experience transformational journey at your property just to bring these concepts to life and make it practical?

Bill: It's not going to be the sexiest answer in the world. We are leveraging best practices from other multi-site industries, you know, and, um, yeah, I think we've got a 4.8 on Google. I think the only higher ranked hotel where we are is the Four Seasons, which is about 30 times more expensive than we are. So I'm very proud of our 4.8 rating and I'm not trying to diminish the work of the team. The difficult part. is not delivering that great experience. It's delivering it at scale. There are amazing boutique operators that I have stayed at all over the world. There are ones that I'm aware of, you know, within Costa Rica. And to my earlier point, you know, a lot of them do. They've got a good property management system. They've got a good point of sale system. You can book online and all that stuff. and they deliver a fantastic experience. However, they're delivering it at one location, and more often than not, I find that it's dependent on a very passionate owner, or founder, or manager, right? I mean, the experience is sort of intrinsically tied to the person who built the space, and it's kind of a manifestation of that person. And I love those. I mean, don't get me wrong. Like I love to pop around and find places like that. The challenge for me is how do you take that and scale it? Uh, and that's not easy. And I think that's really the secret sauce for us is, you know, how do we make this business work when I'm not there, when my business partner is not there, I'm very much not there. I'm in Wisconsin right now. I've been in Wisconsin for almost a year now. I get down to Costa Rica pretty frequently. And what we have found is that. You need to really lean into process and to systems. You know, we say, you know, make it idiot proof. We try to, you know, we sort of eliminate the human element wherever possible, where it doesn't detract from the guest experience. So going back to the example I gave of, you know, walking in, doing the check-in at a hotel, or you get the canned line from the whatever, you know, whatever they have to say to the person checking in. We just said like, look, does our guests care about that? Do they actually want to pay more to interact with a person? And the answer is no, they'd much prefer to just check in on their phone and do the mobile key and go straight to the room or, you know, go to the iPad and check in. And so we did that. And the cool thing about that isn't actually the fact that it eliminates cost, which it does. Um, but for us, it makes it wildly more consistent, right? The guests like that app, every single person who goes to the online check-in or the kiosk check-in gets the exact same experience, you know, for better or for worse. It's exactly the same. There is no human element there. So we've got a bar and the bar has bartenders because we don't have a reception desk anymore. Um, and what's really cool about that is that we've used technology and process to strip away. Like those people don't check anybody in. They don't check anybody out. They don't run credit cards. They don't make reservations. If you want to have somebody standing right in front of a bartender and they say, Hey, what's your availability tonight? The bartender says, you need to go to, you know, book.standard.com. I literally can't do it. I don't have that permission in the computer. And by taking away all of those kind of perfunctory responsibilities, one, it allows us to hire for personality. We don't have to hire the people who can run the credit cards and are good with math. No, we get to hire the people people. And then we get to say to them, your job is just to take really great care of the people standing right in front of you, right? Like that's your job. You're not distracted by picking up the phone or making a reservation or anything like that. And I think For us, a lot of times people fall into this trap of, oh, you're tech-enabled, that's so impersonal, it's so sterile. Sure, you're going to scale, but what are you going to scale? There's no human element there. And I acknowledge the human element is the hardest thing to scale. Hospitality is defined by its human. There's always exceptions. Yes, there are hospitality concepts that don't have a human element. The best ones definitely do. And what we've decided is that, look, we just want to make it work with fewer people so that we can invest more resources in those people, right? So that we're not spread too thin. If we require 75% fewer guest facing employees, we can devote four times the amount of attention to each one of those employees so that they can devote, you know, attention to our guests. And for us, I think that's really the secret. You know, it's worked really well at our first property. Like you said, we've got fantastic reviews. You know, we used to refer to myself and my business partner as the training wheels. And I'm like, it doesn't count if we're here. The training wheels are out. Like I'm here. I'm going to, of course, I'm going to spot all the little things that I wish were going differently. And so we took the training was off, like I said, about a year ago and we've maintained. Uh, and actually I think the reviews, I think we're about to be 4.9 on Google. And so that to us is the. The first step in the process. Now, the second step in the process is can we do it at location number two? Right. And that's something that I'm very candid with the team and investors and everybody about is like, that's, that's the next target on my back. As somebody who's sitting here saying, you know, there's a lot of people out there that deliver fantastic experiences at one location. That is not the hard part. The hard part is doing it at multiple locations. And so I'm excited for the challenge. I think we're up to the challenge. I'm ready to demonstrate to everybody, and I hope to maybe see you down there, some of your listeners down in Costa Rica here, to call me out on it. You know, when we get the second one up and running, is the experience just as good, if not better than the first one?

Josiah: I love it, Bill. I'd love to have you back on the show to talk about that. But in the meantime, I'll include links in the show notes to your website, to your LinkedIn profile. For people who are just listening, do you have a preferred way that people connect with you, learn more about you and your work, and reach out?

Bill: Yeah, LinkedIn is the best. I'm William Graff on LinkedIn, but in real life, I go by Bill.

Josiah: Right on. Bill, thank you so much. I learned a lot with you. It's fun chatting. Thanks for taking the time to record. Thank you so much.