Why Real-Time Operations Will Define Success in Hospitality - Josiah Mackenzie & Wil Slickers

Wil: All right, Josiah Mackenzie, how are we doing?

Josiah: Doing great today, Wil. It's always great to see you. Thanks for having me back on the show.

Wil: Of course, for the listeners who may have not heard your first episode, we actually recorded here in Denver, Colorado, when you were passing through at my old apartment complex and the fun little coworking space area, getting to chat all things, podcasts, hospitality, and many, many other topics around operations and stuff. But if You're a slick talker out there and you haven't heard Josiah's first episode, link in the show notes, grab it, do that, come back. But if you have listened to it, Josiah, catch us up on your life because you've made some pretty big career changes and obviously some changes with Hospitality Daily, your podcast. So we'd love to give us a quick recap.

Josiah: Yeah, well, I last few years have been a ton of fun. It was so fun to record together in Denver. You know, a few years ago, I have learned so much from you will kind of watching you build out the network, the incredible hosts that you have on the show. So it's been amazing, amazing to see that I need to get you back on my show at some point to tell that story. But super fun to see that I've been really focused over the last couple of years on building hospitality daily, kind of the goal of inspiring people each day with what's possible in the world of hospitality. And So doing that, doing a lot of market research as well in parallel to get a sense of what's going on in the world of hospitality, and learned a lot through that. It's been amazing to meet some incredible people and really get a sense of how diverse and powerful and beautiful hospitality is as a way of living and also as a business, right? And it's actually that business side that I've had my eyes open to more and more in the recent years. And especially the last couple of months, I did a big research project around the state of the hotel industry. What are people excited by? What are they challenged by? And number one challenge was delivering financial performance, right? And number one way they wanted to do that was by innovating in guest experience delivery. So it leads me to believe there's a ton of potential by getting super creative, making sure that we are delighting guests, delighting the team members that are delighting guests, doing that all in a way that makes money. So That leads me to a recent change I had, where I took a new job I'm really excited about at Actable, leading their marketing. Actable is a technology company that serves hotels, gives them the tools that allow them to profit from their operations. So it's a funny story, because actually when we got together a few years ago, Will, right after that, I met with the CEO of Actable, Stephen Moore, had a great conversation. We stayed in touch. And one thing led to another. And I just became more and more aware of the potential of becoming a really smart operator, sort of independent of this opportunity. And then I reconnected with Steven, we were talking about it. And I saw an opportunity to get closer to the operations of hotel businesses, which got me really excited. So I'm hoping today we can kind of talk a little bit about, you know, what opportunity there might be for people listening to us. I think we're in a very dynamic environment right now. And there's a lot of opportunities that are super exciting. So that's what I've been up to and super excited to chat with you again today.

Wil: Of course, I love it. I love the approach because I think the operations piece It's a statement I made on our other podcast that I think a lot of the venture capital that we saw over the last couple of years go into technology, into the software side of things, whether it's hardware or software, I think it's shifting. We're shifting more into the ops where it's efficiencies, delivering guest experience, thinking outside of our ADRs and our normal metrics as hotels and even lodging partners or lodging entrepreneurs. And so going into it, I want to hear kind of your thoughts on operations and profitability and scale as we're in a current landscape. And one of the questions I kind of queued up for you was based on one of my solo episodes where I kind of shared with the slick talkers like, hey, this is how I lived the last decade. This is how I want to live the next. And the question I wanna ask you on today's current like hotel and hospitality landscape, what does the next decade look like? How should hoteliers and hospitality entrepreneurs be thinking about the next decade as they're inundated with tons of technology, tons of brands taking over and becoming more OTA like and the credit card race and the loyalty race and this and that and AI, right? Like there's a million moving pieces inside of a property or a hospitality lodging brand. And so kind of break us down, like, what do you think? What do you see? And how does this affect or impact operations for the true operators out there?

Josiah: Yeah, well, I want to pick up on something that you mentioned, Will, around kind of maybe moving beyond just ADR being kind of a measure of success, whether it's that or Revpar. I used to work at a revenue management technology company and worked with thousands of amazing hotels around the globe and saw the opportunity. there, there is still a ton of opportunity to drive that top line revenue. What's been interesting to observe, though, over the last five or 10 years is many more people working in hospitality have even their bonuses more aligned with profitability, which makes sense, right? That's how a business is evaluated. That's the success of a business is not just how much money you brought in the door, but how much money you made as a result of that business operating, right? And so, if I kind of think about the potential there, what's been interesting is I think after that revenue management company, I moved to a company that focused on investment management and got my eyes open to the world of investors. And I saw some very savvy hospitality investors really focus on operations, which was interesting to me. whether it was operating their own hotels or just having a very sophisticated process around how they worked with managers for their properties. But what they saw, and I think what's important for all of our listeners to remember, is that if you want to do well in hospitality, you have to play that game right in the sense of, yes, you want to provide an extraordinary guest experience, but profits is really the oxygen that makes everything possible, allows you to attract and retain and pay good money to the people working on your team. So important. We talk about people and hospitality, but I'd love a world where we can pay people really, really well. And you have to have money to do that, right? And you have to have profits to do that. And so I think, you know, that's kind of something that we've been seeing unfolding over the last five or 10 years, I think, especially over the last recent years, where the costs of running a hospitality business have often outpaced the growth in revenue, right? So you kind of have costs going up, you have revenue, of course, there's a little bounce after COVID, but that's under pressure now. And if you look at, you know, different economic forecasts, that top line revenue, even this year, we're reporting this at the big, you know, early March 2025. But even now, if you look at economic forecasts for the year overall, for the US, you see that, you know, inflation is likely to outpace top line revenue growth. So even on that level, it becomes very tough. And so I guess, you know, to your question of kind of what is, the path forward? And what does it look like to operate effectively over the next 10 years or so? I think there's an opportunity to move towards more real-time operations. And if you think about a lot of performance benchmarking in hospitality, it's a lot of historical stuff, right? I think there's data providers out there that will aggregate your performance data with others in the market. You can see how you stacked up, and that is important But I think the real advantage is going to come from people being closer to all of that unfolding, right? And almost operating with a sort of real-time mentality where you understand all the different components of your business in close to real time. I think there's a lot of conversation about AI right now. AI depends on data to run effectively, right? And data requires digitization of your operations, right? And so if everything is on a paper and pencil, which you'd be surprised to see how much of that still exists, or even in spreadsheets and things like that, where the data isn't connected in real time to systems where you can analyze what's happening, you can't make decisions in a timely manner that allows you to perform really well and stay ahead of your competitors, right? So I think this is the advantage today. This is the opportunity today. And it will be for the next 10 years. I think it's important to look at not just the headlines, but the trend lines and the trend lines are moving towards things operating faster and including your competitors, right? So you need to set yourself up for success in that world.

Wil: All right, if you're listening to this episode, you're probably wondering, hey, hotels, maybe not my thing. I'm a vacation rental management company, or you are a hotel company and you just are struggling with trash. Well, guess what? The number one solution for you, my friends, is Fido. If you go to getfido.com, let them know that Will from Slick Talk or GMH or Hospitality FM, Will Slickers, just tell them that Will Slickers sent you. and they will become your number one trash solution for any type of property, especially with many other services that they offer. So if you're struggling with getting your property or rooms inspected, go to GetFido.com. If you're struggling with getting your trash out on trash day, go to GetFido.com. If you're struggling in general with these operational headaches and nightmares, then you need to go to GetFido.com. Thank you so much for our partners at Fido. And now we are back to the episode. Wow, so much to unpack. In real-time data, I think is a very, very interesting point where I didn't see you going. I didn't see that dot connecting until at the end. I was like, oh, he really brought it home. The weave, man. It's the weave. The weave. The weave is incredible. And so I'm curious because one of the things I'm hearing from a lot of at least short-term rental, vacation rental operators, not as much as the independent hotels or boutiques or even big brands is, I think you're 100% right. The real-time data piece is so important, because I feel like we're all a quarter behind, at least, right? We're all kind of going off of last quarter in the end of Q1, right? I'm getting Q4 reports from people from last year at the end of Q1 this year. So it's like, okay, we're significantly behind in real-time data. I'm curious, just because I'm not the most technical founder. I'm very much like a founder in the service-based side of things. I don't build tech. I don't fully understand the way technology works in terms of building it and kind of creating a really sophisticated product. But I would love to know just from where you're seeing the hotel tech side of things, I feel like there's a kind of a walled garden almost from that data when it comes to whether it's property management software or whatever, to get that data into real time into a data lake that you can actually make real time decisions. And so how do you think the technology side is going to have to shift and coordinate with the need of operators needing this real time data. Because I feel like getting that data is a lot harder than it needs to be right now with the amount of capital that are capital yet that's flown into the industry. So yeah, it's kind of curious where you see that.

Josiah: 100% I think you're you're right on in the sense that this does come down to data and how it flows between systems. You know, it's very typical to have one system being a tool that you operate out of, right? Whether it's interacting with guests or you're running a marketing campaign, and then having another system where you'll analyze performance, maybe aggregating data across these different tools to understand as a business, how are we doing? That has been, and frankly, that's always been the opportunity in hospitality tech. It's not a new opportunity. I think the newer opportunities are around how's it working? And I think sometimes it gets overcomplicated. I think I have found, you know, both, you know, I'm working at a hotel tech company now, but before then, and when I was advising others around how do you shop for technology? I mean, it starts with a lot of conversations, you got to talk to others that are using that get their sense of how did it work. Also look at technology companies as partners and helping you kind of figure this out. But at the end of the day, you need to understand, you know, what are the steps that it's going to take to ingest this data from your systems and do whatever it is that you're trying to do. And I think starting with that objective of what are we trying to do here and why is going to be very helpful. I think sometimes what's missed by people is understanding what goes into change management. And when you're rolling out anything, and I know a lot of our listeners will understand this, but it's helpful to remind ourselves of when rolling out anything, there is, it's really important to have a strong why, and here's kind of the business imperative between, you know, behind us doing this. And, and that's going to be very important, because you have to sell this internally, right? You have to, you know, even if you are the CEO, and you have a lot of decision making power, you're probably gonna have to sell the board on an investment or a big initiative, right? So understand that why, clarify, you know, that helps you shop for solutions that help you address the challenge or the thing that you're hoping to achieve. And then getting a sense of, you know, what are going to be the steps required there. I think, you know, more specifically, If you're starting from a bit blank slate, you're trying to figure out, you know, where do I begin? It's really important to kind of think about what are the points of highest leverage, right? And so, you know, back to our conversation about operations, for many hotels, labor, the people, the, you know, salaries, the pay for people working in a hotel are the biggest expense. You know, that's what we see in a lot of cases. And so, that might be an area to look to begin, right? You know, how is that managed? Do you have the right people at the right time? Or are you sort of overscheduled at times and you're, you know, paying more than you need to be and underscheduled at other times and that brings your staff out and it frustrates guests. So maybe that's an area to look into, but I would look at kind of the big, most important pain points to solve, and then, you know, kind of build your strategy from there.

Wil: All right, whether you are a vacation rental management company or a hotel company, you can actually manage your properties with multiple listings, multiple unit counts under one technology software. Who would have thunk? Well, that technology software is our friends at Hostfully. So not only can you list a single family home, you can actually list a multi-unit apartment building or even hotel. So if you go to hostfully.com today and use the code HFM300, You'll get $300 off onboarding. If you're a growing property management company or hotelier, this software is a great operational software for you to understand your reservations, sync your calendars, connect to the channels, and of course, your other software partners like Dynamic Pricing, Operational Software, and many, many more. So again, thank you to our friends and partners at Hostfully. Go to hostfully.com and use the code HFM300. That stands for Hospitality FM 300. $300 to get $300 off today, or grab the link in the show notes to book a demo with our friend Frank at Hostfully, who was on the show earlier this year. Thank you so much for tuning in. And now we're back to the episode with Josiah McKenzie. Yeah, as a recovering or as I like to say recovering hotel manager, just a joke, a former hotel manager. One of the things I've been really interested in as I'm a member at this hotel called the Hotel Clayton in Cherry Creek here in Denver, and it's a membership hotel. Opens kind of like a co-working space. There's event space. There's a good cafe great restaurant ballet, etc and I've noticed it took me a while to kind of like pick up on it because I would just show up and and start working and not really like pay attention to my surroundings, but I noticed every Time I was there Monday through Friday. It was the same team never changed and Same thing on the weekends when I showed up on a Saturday, Sunday, new team, same schedules, no change. And I, going to your point, right, the overlap of people versus the understaffing of people and the constant schedule changing. And I remember as a manager kind of always juggling that, right? Like I spent more time on the next week's schedule than I did on actually managing and taking care of my team in terms of guest experience. And it was just kind of, it felt chaotic all the time. I know a lot of hotels still run this way. They go off of occupancy. Like you said, they ensure that they're not overpaying during low periods and they're not overstaffed or understaffed on high periods. But I like this model of the membership hotel because they're driving revenue in terms of a subscription membership every year based on whatever the tier is, but then also as an active member that goes, I'm spending money internally on food and beverage, on ballet, on client dinners, you know, whatever it might be. So there's additional spent of revenue. They're not having to focus on that ADR. Do you think there's other ways that brands can get more engaged with their revenue touch points throughout the property without having to create the chaotic schedule to create a more consistent? Because I asked some of the employees, I was like, Hey, Do you like Jeremy? I'll give a great example. Shout out to Jeremy who makes my coffee every time I show up. He knows exactly what I like, how I like it, never has to ask me anything, just brings it to my table. He's a great dude. And so I asked him, I was like, Jeremy, like, tell me about your schedule. How do you like working here? He's like, dude, I work Monday through Friday, seven to three. I never have to worry about my schedule changing. I have my weekends off. I have my nights open. It's so great. They take great care of us. I have the same co-workers. I never have to like wonder who I'm working with this week or, you know, whatever. And it just gives them some consistency. And I think it's great for the staff and also the members and potential guests. So kind of just, yeah, share with me on your thinking there because that's hard to do, especially when you're a convention hotel or there's all these different sub brands, right? Like all these bigger umbrellas have multiple soft brands underneath and they all kind of appeal to a different type of audience. So do you think that's something that can be fixed or do we have to continue with the chaos of going off of occupancy?

Josiah: Yeah, I think it comes down to the strategy and what you're trying to create, right? And so I think this is why I love hospitality is there's such a range of concepts, and even ones that are completely opposite are kind of beautiful in their own way, right? So it's, it's what you're trying to create. If I think about some guiding principles overall, I'd be thinking about, you know, kind of the people that you want to work at your hotel or hospitality business, right? And what's going on in their worlds, right? So I think for the individual that you mentioned, sounds like that consistency was a positive thing. I've also talked to a lot of people recently that either back when they were working at hotels, one was an actor and needed a ton of flexibility and actually did not want the seven to three. And that would be like the worst thing for them. But in your example, they did. So I think understanding, you know, what do people want? And so I think for leaders getting a sense of what are people looking for, I mean, staffing challenges have persisted, they continue to be really tough. And so there is a need often to think about how do we attract more good people to work at our hotels or hospitality businesses. Honestly, I think, you know, the long term trends are pointing to that being a continuing issue. So I think just hoping this problem goes away is likely not to. So, you know, come back to like, what will it take to have talented people working here? If this strategy is like you said, if you want to get away from fluctuation, you know, I think there's a lot of people that do want stability. There are implications into kind of your revenue management strategy and things like that, because demand typically fluctuates quite a bit. And so like a convention hotel is a good example of that. If you have a huge convention coming into town, You likely need to staff up to accommodate that because I think sometimes people don't understand the full implications of this and you get it as a, you know, former manager, but if you have a ton of guests staying more than usual, you have the same amount of staff. Those staff are going to be stretched really thin. It's going to be really hard for them. Also, it doesn't make life great for your guests, right? If it takes them a long time to get the help they need. And so I think there's just going to be this kind of constant balance, but, um, I do want to sort of pick up on what you mentioned though. I guess the other element of that, the Clayton's a great example. I've actually never been there, but it's on my bucket list. And, uh, I would love that because I think diversifying revenue streams is important. And I think it speaks to maybe an opportunity as well. You know, we're talking about kind of creative operations, but if you think about hotels actually could be much more than just a place to sleep. And I think if you think about how do we make more money, smart operations is one component of that. But it sounds like what Clayton and others are doing is also an interesting opportunity in the sense of you can create these new offerings where maybe you have a budget of X amount of dollars to spend on your room night, or you live in the area like you do. And so you actually kind of want it more for the other amenities they offer. So I think by offering these different things, you're going to drive more revenue, which I think is important because I mean, the day we're recording here, I'm just pulling it up. cheapest rooms, 600 some dollars a night. I think a couple of years ago, it was a fraction of that, right? And people will pay more, but to a point. And so, you know, maybe there's some folks that are priced out of that as a place to stay, but they'll, you know, purchase other services they offer. So I think that's an interesting thing to look at as well. That's it for this excerpt, but there's so much more to this conversation where Will and I dig into more of the biggest challenges and opportunities in hospitality today, like how hotels can add new revenue streams, attract the next generation of talent, and build a brand that engages people long after their stay. For all of that and more, check out my full conversation with Will on his excellent Slick Talk podcast. Just click the link in the show notes. Thanks for listening.