The Money Behind the Magic: A Different Take on Hospitality - Josiah Mackenzie

Hey friends, it's Josiah here. It is a holiday in the US, but whether you have today off or you're working, I wanted to try something a little bit different. As you know, on the show, typically, the episodes are very much based on interviews, but this episode is going to be just me, just me and you talking about an idea that's been on my mind a lot recently. I'd love to get your take on. So, as always, you can message me on LinkedIn or email me, but basically the idea that has been on my mind a lot recently is the importance of the business of hospitality and if you've been listening to the show for a while, you know, I talk a lot about or rather my guests talk a lot about the importance of Hospitality as an idea as a way of living right even in the past couple of days Marc Schwarz talked about this Sarah Dandashy talked about this and I think Hospitality as an idea, as a way of living, as a way of treating other people is the most powerful idea in the world. And I love talking on the show about what this looks like both with guests, with colleagues, people we work with, with people in our life, in our personal life. And I'm going to continue doing that. I think it's vitally important. But the idea that I wanted to share with you, and I'd love your take on, is there could be an opportunity to think about, to learn about, to educate the people that we work with more about the importance of the business of hospitality. And the reason for that is the reality that we all face, and I know this is going to be no surprise to you, is that it takes money to run a hospitality business, to operate hospitality in an organizational context when you have other people that you are hiring. guests that you are serving. It takes money and probably a lot of money, you know, depending on the context that you are in, right? So, of course, that's not a surprise. We get that if you're running a hotel, you're running a restaurant, you get it. But I think we need to talk more about it because oftentimes, I feel this having worked in different aspects of hospitality, the conversation doesn't focus on that as much as it should. And I feel the reason it should, we should all focus on this more is The more hospitality businesses can make money, the more ability we have to provide amazing experiences to guests, to hire and retain amazing people, and to expand the type of hospitality we provide if we want to do that. And to break that down, I think if I think about every aspect of the guest experience, from the environments, the architecture, the real estate, the fit and finish of rooms, to thinking about designing an incredible guest experience, so attracting and hiring people that will be empathetic and serve guests well, all the way through the guest experience, it takes a lot of money. And we talk a lot about some of the softer aspects of a career in hospitality sometimes, but I would like to see a world where the operation of the business of a hotel or hospitality business is so profitable, there is money to invest in making all of that better. And just kind of staying with that theme of a career in hospitality for a moment, we've had guests on this show that have talked about hospitality being a career escalator, something that I experienced early in my career when I was working the front desk of a hotel. I learned so much about how to treat others, how to just manage the facilities of the place I was working, and that's all great, right? There is this amazing reality in hospitality where it is such a big employer. So many people work in the hospitality and travel industry. And it is a unique industry in that you can start without a lot of formal education. You can get started and create opportunities. We see this over and over again across all aspects of hospitality businesses, right? So that's amazing. But to make all of that happen, the business needs to make money, right? And I think taking a step back, you know, in kind of my career journey, you know, worked a little bit on the front desk of this property. Then I worked for technology companies that were involved in guest experience. So really did deep dives into how do we listen to guests better? How do we provide things? From there, I moved to a revenue management company, opened my eyes more to the business of hospitality. And then from there moved actually to a real estate investment technology company and I got to see the real estate side of the business. And you know, again, this is probably not a surprise to you, but hospitality and hotel businesses specifically are really real estate businesses. And it sounds kind of funny, but the more that we understand that reality, the better we can run the business of hospitality. You know, I saw that there a couple of weeks ago at Alice, an investment conference for hotels. And I was reminded of that because most people in hospitality know that the hotel business is so connected to the real estate industry. But I think the thing that even I want to remind myself of more often is just understanding how that engine works, right? So in real estate investing, the value of hotel real estate is tied to the profit of the business, the operating profit of the business, right? And so that's why hotel operations has always been so important to me, exciting for me. I bought hoteloperations.com a few years ago, built that out. And I've been obsessed with operations because operations is what connects all of the things we do in hospitality, right? Everything from recruiting and hiring to training. to designing and delivering guest experience. Research I ran a couple months ago showed that for the industry, innovating a guest experience is so exciting and a huge area of opportunity that hoteliers see. So all of that connects to operations, but an outcome of great operations is that you are running the hotel business in a way that is making money, right? So again, this probably sounds obvious, but for me, it underscores the importance of understanding and appreciating the business of hospitality. If we want to be people, if we want to be leaders that can take hospitality, enable more people to work in this environment, to serve more people and to serve them better, we need to be really, really good at the business of hospitality and making money in it, right? And I think even just saying that, saying making money, talking about profitability, it might seem sort of detached from the warm fuzzy feeling of hospitality, but I think they're connected. That's my, that's kind of the big, Idea that I want to share with you and get your feedback on I feel like these two aspects The kind of softer side of hospitality and the business of hospitality are so connected and we will do well for ourselves for our careers for the people that we work with for our organizations the more that we understand the connection between these two, you know and A couple of weeks ago, I joined Actable, which is a technology company that empowers people who are powering hospitality, a lot of behind the scenes technology to understand and improve hotel operations, right? And the reason I wanted to do that is I want to get closer to that, right? And I see a huge opportunity for this because over the past couple months, I talked to a number of investors in hospitality, including Zach Demuth, and I can link to the conversation with him in the show notes. But essentially, you know, kind of the takeaway from many of these conversations is there is so much capital, there's so much money outside of hospitality now that could move into the hospitality industry. if hotel businesses and hospitality businesses were more profitable, right? And so for me, this becomes really exciting because if I think about all this money that could move into this industry, it means an ability to innovate, to attract and retain more talented people in this industry. And then very practically, you know, for you listening to this, This is an amazing career accelerator. If you can think about how to operate your hotel business in a way that makes more money, and of course doing that by providing exceptional hospitality, you are going to do really well in your career. Your business is going to do really well. Those that you work with are all going to do well along with you. So that's the big idea I wanted to share with you. I would love to get your take on this. I am always fascinated about how do we create these environments where we can get more people working in this industry, we can empower them with better tools to do their best work so that we can not only make lives better for people working in hospitality, but we can provide those amazing guest experiences that many of us work in hospitality to do. That's what lights us up, right? And so, that's my big idea. I think we can all benefit from educating ourselves more about what it will take to drive more profitability in hotels. I don't think it's the opposite of that, you know, warm and fuzzy hospitality feeling. I think this is enabling. It's a huge enabling factor for that. And the more we understand about this, the more that we can create and do. And so, very interested in your take on this. Message me on LinkedIn. Email me. Thank you for listening and look forward to hearing from you.