Top Hospitality Trends and Opportunities To Watch (US & Europe) - Josiah Mackenzie with Florian Montag (SMACK Podcast)

Josiah: This is going to be a little bit different episode, because we're going to talk a little bit about what we're seeing in hospitality broadly, both of us are speaking to hospitality providers around the world. But before I'm based in Europe, I'm based in the US, we wanted to talk a little bit about some things, specifically in these two areas that are interesting and exciting in the world of hospitality. But before we do that, we will give you a little bit of context on both SMACK Hospitality Media and Hospitality Daily. If you haven't listened to their shows, SMACK has an amazing podcast and whole media brand, helping people in hospitality tell their story. So Florian, welcome to the show. And maybe to kick us off, tell us a little bit about what you were seeing in hospitality that led you to co-found SMACK.

Florian: Hi Josiah and thanks so much for this initiative that we both have this joint session between Hospitality and SMACK. It's an exciting time of sharing ideas and Hospitality coming together because of course there's a lot of rapid trends on the market. And this is also a bit the story behind SMACK. It was a couple of years ago, five, six years ago, that Fritz, who's one of the, or let's say the founder of SMACK and the idea, we're sitting together in Berlin, both in a hospitality background. He started a media agency a couple of years before me. I started a company which was called Hotel Hero with my co-founders, which was a review and recommendation platform for hotel software. And we're just chatting about like, what are we good at? And there was definitely, we have a lot of experience of speaking to incredible people in the market. And we wanted to share these incredible conversations, which we had to a broader media, to a broader audience, especially young professionals coming into the hospitality industry. And that's where we kicked off with saying, let's just do a couple episodes and see how it takes off. And now we're in season five and had incredible guests there. We expanded our hosts. We're four hosts since a couple of years. So it's a lot of fun to talk to incredible people and also a lot of like-minded people who want to bring the industry forward.

Josiah: It's a lot of fun to listen to the shows and watch the videos. I'm curious in the way that you're doing a lot of things differently than, let's say, traditional industry media. I was curious from a media perspective, you take a very different approach. And what went into you producing these shows as you do that really stands out and feels different?

Florian: Yeah, so the incredible thing with SMACK is that we have real people behind it who are much more kind of media driven than, for example, Fritz and myself. From day one, there was a real concept behind it where it's saying we need to be different. We need to stand for something. We don't just want to be the next news outlet. We were young and dynamic. We're still young and dynamic, I hope. And we're like, OK, podcasts at that time where there was not so many hospitality podcasts nowadays, you can, it's difficult to name all of them, but we were just like, okay, what would we want to listen to? And we're like really thinking about if we are the audience and just a couple of years back when we're still studying, what would we have loved to listen to? And that's not always the same PR lingo, which clearly says, okay, I'm this big brand and I'm super successful. And, you know, let's all do this, but it's more like hear the real stories and of people and how they made it to success or why they are passionate about certain topics. And just really trying to give a bit of light behind the scenes because often, especially nowadays has changed a bit more, but in hospitality you often have this lot like hierarchies and it's difficult to relate to the very experienced or very successful players and that's why we wanted to really break down that gap in a sense and just make it a bit more accessible.

Josiah: Well, beyond it being interesting to listen to, I'm curious, is there a benefit also to your listeners in that they're moving beyond just the PR and the press releases and getting to know stories? What's the benefit from a career growth or a business growth perspective to have more real stories and a little less filtered and more of a conversation about what's really going on?

Florian: I think on the first side, it's more relatable. and you suddenly feel that this could be me if you know a lot of things could happen of course a lot of good things or the right things need to happen but yeah i think it is it is definitely also it's not only let's say the people with a certain path can actually make it. Because especially in hospitality, everybody has a different story. And you have from so many different cultures, from different backgrounds, so many success stories. And also we started off at the beginning really saying we don't just want to bring certain CEOs on the show, but also people who are maybe mid management or just doing exciting projects and exciting things. And nowadays we've actually built up different kinds of content levels to also with our blogs, we bring in also hotel staff and more junior people to give them a voice to share their stories because yeah, I think it's the fun thing about hospitality is bringing people together and not just in a suit and tie, but also more in a, you know, like a dirty laundry, like one of our concepts where it's really just telling stupid stories out of hospitality and just, you know, having a laugh because yeah, we have also all stressful days and don't want to look at the news cycle. So why not create some fun and at the same time in a professional atmosphere.

Josiah: Well, it's fun to talk to you because you and I both have worked in leading business development for technology companies. And in those capacities, you talk to so many people at all levels across the industry. And so you're in a lot of conversations, you hear a lot of stuff. And I think it's from that career experience that you have, that gives you this unique perspective into this type of person can say this sort of thing, and you understand the dynamics of that. And it's funny because I think that's kind of a really what led me to found Hospitality Daily is that I was in a lot of these meetings where you go to maybe an office park or a corporate building and people, air quotes, working in hospitality were often just I don't know, in spreadsheets and just working at desks and in these sort of sad offices that it felt easy to be disconnected from the spirit of hospitality. So I wanted to give people a way to reconnect with that, remind themselves of why do you work in this business? What are the opportunities in this business? And I feel like no better way to do that than through conversations, right?

Florian: Yeah, definitely. I mean, especially when you're more on the on the vendor side, in a sense. you're interacting with hospitality a lot, but of course, you live a very, like my day-to-day is more of a startup day-to-day or scale-up day-to-day than a typical hotel day-to-day. But yeah, I would love to also learn more about your ideas behind Hospitality Daily. You also said bringing these stories to life, but I mean, for yourself, you don't have a background in kind of media necessarily. It's always been, I mean, the first time we met, we spoke before the show, I think five, six years ago at ITB in your previous life, so to say. What was the drive for you to build up such a brand? And what does Hospitality Daily do nowadays, especially for the audience from SMACK, which is maybe not so familiar with it yet?

Josiah: Yeah, so Hospitality Daily gives you inspiration each day on what's possible in hospitality. And I do that by speaking with a different person every day, seven days a week on what is possible. And so that could be somebody working in a brand, it could be a management company, it could be an investor. I try to show the industry from all perspectives, because I think regardless of where you work in hospitality, At a minimum, you should know all the different people involved in producing these amazing travel experiences that we all know and love, the hotels, the places that we stay, and we say, this is great, but what goes into creating that? And the answer to that question is, it's a lot. It's investment. It is the real estate. It is the brand development. It's the operations of providing this sort of hospitality. If you don't understand that whole ecosystem, it's impossible to be very effective as a hospitality provider. And so I want to educate people on what's out there, but do that in a fun way, right? Talk about what is exciting, because if you hear a concept, it's not about just taking that and immediately applying it directly into your business, but you might think, hey, there's a way that I could take this way of operating or this way of taking care of my people or this way of providing a unique experience that I can apply. And so I want to give people a sense of what's possible and do that on a daily basis because inspiration is perishable. And if you don't get inspired every day, it's possible to lose that. You lose the energy. Hospitality is very much of a business where you're giving out a lot, right? You're giving out, you're serving people, you're taking care of people. So you need to take care of yourself. And I want to help people take care of themselves by getting fired up every day by what's possible in hospitality.

Florian: Yeah, definitely. I love the kind of give first concept, but it's, what's your, I mean, both of us have this kind of love for hospitality and, but going maybe a couple years behind that, what was your first touch to hospitality? How come you fell in love with an industry which You've been in your career, sometimes also outside and back in, like, what's your love for hospitality?

Josiah: Well, travel's been a theme throughout my life, actually, because my my dad was born in Canada, my mom is from the San Francisco area, I was born in Canada, moved to San Francisco when I was very, very young, grew up here is when I was young, but it was actually an experience in university. And I would say my me falling in love with hospitality really took place in Europe. So I studied in Dublin, I was in Ireland, and because it was the home base of Ryanair, I had the chance to visit so many different cities within Europe for a couple of euros. And so I just fell in love with not just travel, but hospitality. And at first, hostels really connected with me because frankly, it's what I could afford as a student, but I loved the idea of landing in a city and immediately The hospitality providers had thought of an experience, they had created an environment where I could meet people and I could really enjoy that place, right? And so I had such fun doing that and then traveling around Ireland and other countries, got to meet so many hospitality providers where I thought, this is just the coolest business, right? It's a lot of work. But it's so cool to be able to provide that experience. And so one thing led to another and I ended up working for a company that was based in Barcelona, that was serving people in the hotel industry and traveled around Europe and around the US building that. But I think it was a feeling first and then starting to see the business of hospitality presenting a lot of opportunity. It's one of the biggest industries in the world, right? So if you build a career in this industry, you can do so many things.

Florian: I love that you mentioned hostels just there and this was kind of the one of the reasons you fell in love with because when I was studying also still hospitality around 10 years ago, it was really seen as the hostels are the disruptors of the hotel industry. And that's really crazy in such a short period of time, how much it has completely evolved that Of course, hostels are still growing and disrupting, but since then you have service departments, Airbnb, vacation rental, you have so many trends which have happened and which have really blown out of nowhere, so to say. And it's really incredible to see how much the industry has evolved and changed in 10 years.

Josiah: It continues to evolve. And so actually, just before this, I was speaking with the CEO of Generator and Freehand Hotels, Alistair Thomann, and he was talking about he joined as a CEO of Generator in 2017. And in these couple of years, so much change has happened. Obviously, there's been changes in how people travel. but the ability for technology to enable better monetization of spaces has allowed them to do more and open up more concepts. So I wonder, Florian, if we could, let's spend maybe a little bit of time talking about what we're seeing, because you and I both talked to so many people. I'd be curious in Europe and beyond, just in general, what you're seeing and hearing that is really interesting to you in terms of themes or trends in hospitality, that you think our listeners might be inspired by?

Florian: Yeah, for sure. I mean, I always have a little bit of this kind of innovation and tech lens in most of my conversations, of course. But I think we are in times where you have a lot of challenges, of course. And, you know, if it's staff shortages, if it's energy prices, inflation, etc. And I think big topics here is that everybody knows that you have to look at your business and your business model in a different way and need to question everything which you know to double check if it's still kind of the right way to approach it and also bringing it to the future. And we see that of course on a tech side a lot of new concepts or which came to market a couple years ago are now getting to a maturity that they can really scale throughout Europe, that we can see that a lot of kind of leading concepts or brands are heavily investing in technology as an enabler for multiple things. Before, it was always just like operational efficiencies or a little few gimmicks around the guest journey, maybe. Of course, you had the revenue topics, but now it's really holistic that most hospitality concepts are looking at technology and are also looking at how to set up or how the organization has to change to adapt to these trends.

Josiah: What I'm curious about is I'm thinking back years ago, but when CitizenM Hotels first entered the scene and it was very revolutionary at the time, it still is. I love the brand, love the people there, but to this notion of technology enabling new concepts is fascinating because technology is always communicated in the context of being this will make you more efficient. But if you can actually do something new, a new concept, a new guest experience with technology becomes really fascinating. Are there concepts or brands you've seen recently that come to mind in terms of using tech to provide a very different type of experience?

Florian: Yeah, I mean, quite a few. It's actually fun that, I mean, CitizenM has always been kind of inspirational. We're also very proud, but that's more of my, the other company, my day job, let's say, that we actually brought live our first CitizenM property and which we're currently rolling out at the global scale. We see, you know, concepts from something which I find really cool, for example, is Raus in Germany, which is cabin business, nothing to do with technology per se, you would say, but Julian, the founder, always talks about it. It's like a tech backend to enable a nature frontend because it's remote cabins. How can you manage remote cabins without kind of a super nice guest journey to be able to communicate on a digital experience so that people can actually be left alone because they want to be by themselves in these experiences, right? Or in the same kind of style. There's also a new concept in Germany, which is called TinIn. It's from containers from the sea, and they're able to build containers in eight weeks with old containers and build kind of 20 room hotels. into locations which normally don't have any hotels at any certain kind of standard, I would say, outside of the tier A, B, C, D cities, but really somewhere, let's say like 30 minutes outside of it. And really just suddenly re-questioning a lot of topics where a hotel was always, you need X amount of rooms, you need to do a refurb, you need to have this, you need to have that. And technology enabling suddenly to just say, okay, the status quo doesn't necessarily exist anymore. Now the sky is the limit and you can bring it into that sense or into the other sense. And I think that is what fascinates me about the market at the moment is that you meet in a day-to-day people who have ideas. And it's not you, the technology vendor or the technology, which is the innovation, but you're just kind of the enabler for their ideas because suddenly they can just do whatever they want and can solve certain issues. As we know, it's very hard to bring new hotels to city centers. And do you really need an additional hotel in a tier A downtown city, but we all talk about in a lot of cities, you can't afford hotels anymore because nobody can operate them anymore. So these are kind of the exciting views and discussions I see at the moment.

Josiah: There's a number of things I love about what you shared and I think it goes back to what we were talking about earlier in the conversation where you need to understand the whole ecosystem, right? So if you think about hospitality, you might think about just working in a hotel or in a restaurant, right? But you alluded to innovation in construction and building materials, right? Hospitality is fundamentally rooted in the sense of place, right? It's the built environment that you can provide hospitality from. So if you want to be a hospitality entrepreneur, you want to create something interesting, you have to understand the construction side. And I think innovations like you've described with shipping containers or things like that, allow hospitality entrepreneurs or people to provide very different experiences. Because I think the past, all buildings have more or less kind of felt the same. And now you see this whole innovation. But I also love the nature-based concept, because you talked about technology in the back end and nature in the front end. And I feel like nature and the outdoors is such a a big trend it was pre-pandemic, but I think post-pandemic both in Europe and in the US. And I'm seeing and hearing a lot more of that. People that maybe had been talking about this for a while, but now there's consumer demand for it. I was talking recently with the founder of Bolt Farm Treehouse. So it actually was a treehouse that he had built for his wife and his family. It grew from there, and now they have a whole business around it. I was talking to somebody who's a landscape architect and actually worked with Four Seasons Hotels, which you'd think to be a very traditional legacy brand, but they have a 14-tent resort, just tents, 14 of them, very small, very different from what you would think about a Four Seasons resort. So I think both on the independent side, all the way up to the luxury traditional brands, you're seeing innovation on how can we use creative building, as you said, to provide these very different experiences. And I think we're just getting started there. There's so much opportunity.

Florian: I think 100% what you're saying, and I see it on multiple levels, right? The pandemic has just proven us, okay, you can't always just travel the same way. So of course, everything around cities became suddenly outside of cities and driving distance got much more value. I don't know exactly how it was in the US, but what you hear, at least from the outside, I mean, New York during the pandemic, there was nobody there anymore. San Francisco is definitely also one of these topics, everybody has moved away. And suddenly people were looking at alternative ways of traveling. And you hear here like the newest trend was renting camper vans to go to the coast of Albania, for example. And suddenly, out of nowhere this was kind of one of the peak destinations to go to and these are just new trends evolving and you see it also from a hospitality investor side that suddenly they're looking at short-term rental professionalizing certain industries where before it was really just kind of private people having a little business maybe and now there's a lot of money being being spent into it. How do you see that in the US kind of alternative accommodation, short term rental, is that booming or how's that evolving?

Josiah: It does seem to be and I think both on the independent side and even all the way up to these large brands or institutional investors. are now bringing more outdoors focus concepts to life. And you see it on all ends of the chain scale in terms of luxury, in terms of services offered. But I think an interesting piece for me there is you kind of think about investment or development. I think something else that I've seen that is standing out to me is it seems that there's more and more of an awareness of how do we get more people involved in the investment side and It's not saying that everybody should be investing their money in hospitality, but there's more drive for awareness of how does the money work in hospitality? Because for so long, that has only been controlled by a couple of people or a couple of large organizations. There's people like Tracy Prigmore in the U.S. that runs this program called She Has a Deal, where it's promoting women owning hotels and investing in hospitality. And I think through people like her running education like that, I'm very optimistic that the next wave of hospitality has both people working in these properties, but people participating as an owner and investor, they have a stake in the outcome of the success, which I think is good for everybody.

Florian: Yeah, definitely. Different models to incentivize. And of course, I mean, the blockchain trend is now a bit passed by the AI trend. But in Paris, one really cool hotel group, which, you know, there was a consultancy and they built up a new concept. very streamlined hotels, and they introduced a coin system, you know, very much like blockchain, on the blockchain, where they run the group as a decentralized organization in a sense, where employees can requests to do certain tasks and kind of therefore earn more money. So they say they have kind of a single host per property, very limited in tasks and very streamlined. And then if they want to do more, they can actually say, actually, I want to participate in the next, I'm doing, I do marketing on the side as, and I'm just here as a student job or whatever. I want to earn some additional money and supporting the marketing project, or actually I'm more kind of a professional more on the upside or housekeeping side, and I get more engaged there. Of course, that's a small scale, but it's also somewhat interesting to see this topic of incentivization of front of house or operational staff, because you always see that huge discrepancy in traditional hotels. When you look at a, I don't know, like a hotel canteen of a five-star hotel, typically it's down in the cellar behind the laundry room. So it's really thinking about stakeholder management and incentivizing people to say actually I want to give more and I want to be more involved and I think that is definitely interesting approach to make it more sexy to work in hospitality.

Josiah: I think it's a great example because even though blockchain and cryptocurrencies went through a big hype cycle, I think the blockchain technology is interesting and should be distinguished from crypto, right? Because blockchain technology allows these creative use cases. And even if it's a small example, I think people who want to think about innovation should think about those small examples and they should think, is there a way I can take a piece of that? But I love that. And I love what you alluded to earlier of technology empowering people because I feel like that's something I'm hearing a lot more about as well. And I was talking with Lose America, who built out Booking.com's business in the US, and he's since moved on to another role. But what he was telling me is that there is more opportunity than ever before for independent hospitality, because in the past, you had to rely on the brands to give you distribution and some of these systems. But as technology becomes more sophisticated, but easier to use, everything from distribution to operations allows independent providers of hospitality to operate on a global scale, which is really exciting, I think.

Florian: Definitely. I mean, there's always the good and the bad, right? People are saying, hey, now we're paying X amount of money into OTAs for commissions. However, suddenly you're able to sell at a global scale. Before that, you had to have a management contract or some kind of contract with one of the big brands, right? To be able to sell at a global scale. So I think there's always good and evil. And it was always about when we look at the direct booking topic as well, it's about where do you want to invest or not invest? Because some people also say it's not always that bad to also have a certain channel mix, right? When we go really into the hotel distribution world, which you definitely know from your past, But I think it's definitely technology has made it simple for a lot of smaller operators to come to market to try things out. And you don't need to have the deepest pockets to have the possibility of building up something cool. And you can nowadays kind of go step by step. And of course, at some point, you need people backing you for a certain extent. But technology has given a lot of democratization of just starting to build new concepts.

Josiah: Well, you know, Florian, I think one of the things that I'm seeing, and I'm curious if kind of if you're seeing a little bit of this as well, is I'm seeing in the San Francisco Bay Area and in the US, I'm seeing people who spent a lot of their careers in technology companies actually moving to become hospitality entrepreneurs, they're bringing some of this mindset of creativity and using some of the technologies that you've described. I don't think there's necessarily a right or wrong to this, you can build a really good career in technology, you could build a really good career in hospitality. But some of the people that I'm talking to, Some of these big tech companies, the biggest tech companies in the world, the Googles, the Apples, stuff like that, they're saying, hey, I wanted that connection with other people, right? And I wanted to take good practices for building companies that we learned at these big tech companies. But I want to think about, is there a way that I can bring some of that and combine it with a care for people and sort of this modern tech powered operations? And I feel like that might be something that we see more of.

Florian: Definitely. I think you have these both topics, right? Like human touch is so important and this personal interaction, and that's all about hospitality. And then you have the technology side, which is all about kind of bringing you kind of experiences, so much more possibilities. And I totally understand why these two areas are merging, because one needs more personal and needs that connection. And the other one, you cannot do anything at scale without technology. And I find this intersection between both for myself also, as where I got stuck, let's say, seven, eight years ago. And I'm driving in this space because I think this is so fascinating to see is how can everybody interpret personalization, human touch, hospitality in a new way. I don't find five-star luxury properties appealing and definitely an amazing experience but there's and there's also a lot to innovate around that but maybe that's the area where there's less of this change and transformation. And I see it a lot in Europe as well, where, you know, you have, especially in Germany, a lot of these hospitality concepts, which were founded a couple of years ago and are really also striving throughout Europe. And, you know, some of the players, which from a brand from the U.S. definitely showed the way, like Sonder or Selena or these kind of players, from their founding story and all of that were definitely an inspiration for a lot of European players to just say why not let's try out something in that style too or in a different style but with that role model.

Josiah: I love it. And before we go, Florian, I would love if we maybe talk a little bit about kind of what we're excited by. I think for me, I resonate with a lot of the things that you shared. I think we talked a little bit about nature-based hospitality. But I think I also see the other side of that. Based in San Francisco, you mentioned New York, Paris, a lot of these cities, people did leave either moved away from or were spending a lot of time out of the city. I think one of the things I'm excited about is actually the other side of that as well. As much as I love nature-based hospitality, I'm seeing hospitality be a force for good in cities and a way to bring more life to cities. So I was in Los Angeles recently, I met with Kara Bartelt, who's the who is the general manager of the Hoxton Hotel there. She has a background in architecture. She cares a lot about cities in running that hotel. And she's sitting on the boards of community, the fashion district of Los Angeles's tourism. And they're using hospitality to bring more life to the cities. They're making it attractive for people to visit. They're showing them the other businesses there. And by doing that, they create more economic activity in the city. The city feels more fun, more vibrant. And so I think whether it's people like Kara that are doing that or you know, people, sometimes people are using hospitality businesses as a way to create more jobs or educational opportunities. And so hospitality, I think, is fun and exciting, but also could be a force for good, whether it's in the city or it's in the countryside. And I think that's one of the things that gets me so excited about the industry. But I'd be curious for you, you know, as you look at the landscape now, as you look into the years ahead, what are you most excited about in hospitality?

Florian: What I'm most excited about is I think this rapid transformation and to see also new concepts, new ideas, which focus on specific target audiences, who don't say, I'm not something for everybody. I know who I'm targeting. I know who I want to please. And I'm bringing that product, that service, that offering to that exact target audience. Because When we look back at traditional, you know, budget and mid-scale hospitality, it was really kind of, okay, we have a price point and we are for everybody who can afford this price point. And it needs to work for as many people as possible because it needs to work for pretty much everybody. And where there are a lot of this beauty of hospitality got lost in a sense, because it was just doing it at scale. And of course, you then had more independent hotels and all of that more doing very heartfelt. But I think it's nowadays having also a lot of concepts coming to market, where hospitality plays a role. And I think also the adjacent industries, if it's, you know, more long stay, if it's student living, of course, already for quite some time, but even senior living, or the office space is really becoming more hospitality, or how you call it. And I think this is really really great because they are trying to take the best out of it. And I think also hotels have been way too long, what you said, just kind of silos in cities, and they could offer so much more for the surroundings. And you also have here in Berlin, for example, a concept which is called Denizen. Maybe you know David Turnbull as well, which is like a co-working, but co-space for local small offices. which are maybe like a small law firm or small doctor who don't have great kind of common areas. And so they share a space in where they can go for meetings or for working a bit. There's a little cafe. And this is also suddenly like bringing hospitality to actually bring offices together and services together. And therefore just kind of rethinking that kind of space and not just looking at a co-working space, which would put in and say, everybody external comes in. but actually saying how do we bring hospitality to the city that my tenants who are already here actually benefit from it and not I use the space and I get people from outside in who then again maybe dislocate the people who are already there. So I think we're in a very exciting and dynamic time and very excited to see what will be developed in the next couple of years when we look at the pace of the last few years.

Josiah: It is an exciting time. It's an exciting time to build a career in hospitality. It's exciting time to build a business in hospitality. So you owe it to yourself if you're watching this, if you're listening to this, to stay up with what's going on, get inspired on a daily basis, get inspired on learning by learning from others and One of the best ways to do that is to subscribe to SMACK on YouTube, on your podcast player. So take a moment, do that now. Subscribe to SMACK, subscribe to Hospitality Daily, stay informed, stay inspired. Florian, this was a real pleasure to talk with you today. Thanks for taking the time.

Florian: Josiah, thank you so much. Have a great day.