Lessons From The Caribbean: How To Thrive Through Expansion - Sloan Dean, Remington Hospitality

Josiah: What does it take to not only spot an opportunity but also act on it so your hospitality business thrives? Today, we're learning how Sloan Dean did that as CEO of Remington Hospitality when they saw a big opportunity to expand into the Caribbean and Latin American markets. Stay tuned to hear what they did and how they've been so successful there in such a short time. 

Josiah: Sloan, you have taken Remington Hospitality from managing hotels here in the US into growing very quickly, not only here, but expanding internationally, and specifically expanding into the Caribbean. The Caribbean has seen some incredible performance numbers. And so I imagine a lot of our listeners are saying, this seems like an opportunity. It's one thing to spot an opportunity, it's another thing to be able to execute on that opportunity. My question for you is, what capabilities have you developed within Remington Hospitality that allowed you to enter this new market in the way that you have?

Sloan: Yeah, first and foremost, not only was it the potential rep part growth in the market that attracted us, it was the fact that a lot of owners have so few options. So, if you look at branded hotels in the Caribbean, that's because in the Caribbean. They're either brand-managed or if they're unbranded, the owner operates them. We saw a big swim lane opportunity of lack of competition or lack of providing an owner an alternative option. That was first. You have to go where customers want your business. Amazon was successful because it took friction out of the consumer process. We saw it as there are dozens and dozens of owners that don't want to manage it themselves. and maybe don't want to sign a 20 or 30-year management agreement with Marriott, IHG, etc. So that was actually the first catalyst. In terms of why we've had success so quickly, because we've only been in Cala for two years. It was first that, you know, we put real resources to it, not part-time resources. And we happen to have four or five key officers within the company who were from the region and were also predominantly fluent in Spanish. And so, you know, our head of CALA operations is Rich Garcia. He used to be our head of food and beverage. or at beverage and food, as we call it. And he's from Guatemala. He's a fluent Spanish speaker. He gets the traditions. And I think too often we think, well, I could run hotels in the U.S. I can go do this. But there are substantial differences in labor laws. There are substantial differences in taxation. You go to our hotels in Costa Rica, and almost none of the hourly employees speak any English, period. And even the supervisors don't. So your ability to be able to do business in the local language and the local customs is paramount. The second thing is that we seeded a Miami office because Miami is the gateway to CALA. And if you do not have a presence in Miami, you're not a real management company in CALA. You can't do it from Dallas, you can't do it from Atlanta, you can't do it from DC. And so we have an office in Miami, our officers are there, and that's where we're growing CALA from. Of course, we supplement and support Dallas, but Miami is the gateway to Latin America. And blended with those Spanish executives Having a presence in Miami, one of the other things that we've done is we've been very intentional about our partnerships. We've got really great legal counsel and taxation counsel. We have a programmatic equity partner in the Dominican Republic who's actually got ties to the government. And so partnerships are paramount. You can't do it yourself. We've also learned a lot and brought in expertise in the all-inclusive business; all-inclusive are very big in the Caribbean. If you want to be relevant, you have to understand that. And there's not really a lot of big players. You know, you have Club Med, Sandals, Playa, but there's not a lot of scale there either. And so we've intentionally recruited folks that have all-inclusive experience because that's really paramount for a lot of the resorts.

Josiah: So it sounds like you were hearing a need, you're seeing and hearing a need, but it was also, it wasn't just opportunistic in that sense. You were also looking to see kind of what are the capabilities and who are the people on our team. What are the capabilities we have? And so it sounds like as the person leading the company, it was that one, two combination where it's not less like we can make a lot of money here, but you're like, actually our officers, our teams are uniquely suited to this opportunity. I'm going to give it a green light. Is that, is that a fair recap?

Sloan: Absolutely the case we actually in late 22 sent an email to all company managers so if you're a supervisor and above and ask for folks that are Spanish-fluent either work from Central America or the Caribbean and were willing to do task force And we got a response from over a hundred people and we still use some of those folks. You know, I have a, my head of task force sales is actually Puerto Rican and was working in one of our hotels in Florida. And she spent a ton of time helping set up sales strategy in our hotels, even going on sales calls. I just made a sales call to someone in Costa Rica this week. That was a big group piece of business. But you can't. She understood our culture and she understood how to sell to the American consumer. But she also was from that region. And you just can't discount that so much of Caribbean and Central America is relationship-oriented. That's where the partnerships come in. It is still a much more old-school way of doing business, And that's why I think a lot of American companies still because American companies are now more transactional. The Caribbean and Central America are very relational, and you can't build a relationship if you don't speak the country. You can't build a relationship If you don't have local partnerships, you can't build a relationship if you don't have an office in the one U.S. city that half the flights go through. Those things matter.

Josiah: I'm not sure if this is a question or an observation. If it's a question, it's probably a bit of a leading question. But I'm curious if operating this way makes Remington a really interesting place to work in the sense that I feel like within traditional organizations that have more traditional paths, like, let's say, your US-based management company, that's all you do. Maybe that's where you're focused. It's kind of like, okay, I know the general career development. assessing and then when you decide to move into a new area of business, like your Caribbean operations now, somebody who is working maybe in the U.S. that maybe didn't imagine Remington hospitality as having career opportunities now in these new locations. Does that do something kind of for the morale and the excitement within the organization where it's like, okay, we're moving quickly, and we're expanding as a company? So I don't even know all the opportunities that might exist.

Sloan: Absolutely, it creates a halo effect. You know, I just was talking to the dean at FIU, and they're the biggest hospitality school in Florida. Their big campus is down in South Florida, and we're talking about how do we create a recurring intern and or co-op program now that we're building this big presence in CALA, and it creates a halo effect that, hey, they may have students that never would even consider us, but because we got an office in Miami and we're big in CALA, they may come work in our U.S. hotels. And so there's definitely a halo effect. I mean, my head of sales, I've just recruited, and she joined us from Ambridge, and she specifically directly said, you know, our, what we're doing in CALA is one of the things that attracted her. And so for sure, it's had a very positive benefit on recruiting, but we have a dedicated division. I think where my competitors have gone wrong is that they try to use our resources to run the Caribbean and Central America. And you just can't do that. And you do that because it's more cost-effective. You know, we went into CALA saying we're willing to lose money for a couple of years to do it right. And I think so few companies are willing to do that. Or what you tend to see is a US-based management company that wants to move into a new area. They go buy a competitor and they seed it with that platform. It's just not as organic or natural, you know You're just buying that skill set and we made a conscious effort not to do that We did it through partnerships and then consciously saying hey, we may lose money in here for a couple of years but eventually just like when Amazon moved into the hosting business AWS is one of the most profitable portions of Amazon, but it lost money for the first four or five years And so at some point, this actually could be our biggest line of business. And it's because of the way we seeded it. And we're seeing a lot of traction.