By Geneva Rinehart, Managing Editor, Hospitality Upgrade
New York City – June 7-8, 2023
In a very intimate, theatre-style setting the boutique and independent hotel groups came together for two days in New York City. Ariela Kiradjian, Partner and COO of BLLA, and half of the mother-daughter duo behind BLLA facilitated a highly engaging two days of panels focusing on financing, debt, environmental investment and technology. The orange sky and poor air quality in the Northeast were as bad as reported, but inside Florence Gould Hall was nothing but pure energy. The next few paragraphs will provide a brief overview of the two days at the Boutique Hotel Investment Conference, held June 7-8 at the famed venue.
BLLA events have been on my list to attend for some time, and it didn’t disappoint. In the cozy setting, engaging with other attendees happened quite organically. The coffee break and cocktail hours provided ample opportunities to literally bump elbows and make meaningful conversations and connections. And the gelato … who could forget the gelato?
Frances Kiradjian, founder of BLLA, was gracious to extend an invitation to Hospitality Upgrade and Hotel Online this year. Ariela played the main emcee for the event and was a great facilitator moving the panels smoothly from one to the next. The theatre setting and casual sofa stage was a great way to bring the audience into each panel discussion. Many of the sessions had far more questions than time allowed, but once or twice the speakers weren’t afraid to call out to the audience by name to put someone on the spot. The theatre style really drew speakers and audience together in a unique way that most industry events don’t achieve.
One of my favorite quotes from the event was made by SH Hotels & Resorts CEO Raul Leal who said, “If you’re waiting for a trend to follow, you’re already too late.” He continued to encourage boutiques to find success beyond just mere design. Successful boutiques should provide a storytelling opportunity. Specifically, he said, “Does (your property) have soul?”
In the “Investing with An Environmental Conscience” session, VP Global Investment Management at citizenM Hotel Marissa Ballan shared the hotel company’s philosophy and subsequent storytelling opportunity. citizenM’s sustainable vision is “to influence positive change in a world where we are all just guests.” Another panelist shared that beyond that sustainability is good for the environment and good for the community, if done properly it can increase operational efficiency and the bottom line.
Samantha Ahuja, of Greenberg Traurig said that environmental investment is linked to your identity and ultimately to your brand. It can be crafted as part of the guest’s experiences and eventually part of the brand’s story.
Investment firm Thayer Ventures’ Managing Director Chris Hemmeter shared that Thayer looks for companies that identify market problems in a novel way. Thayer seeks out companies with unique solutions and well-assembled teams for investment. Having founded multiple companies himself, Hemmeter knows what it takes to develop and grow companies. He said that boutique and independent hotels have a distinct advantage over the large brands to innovate as boutiques tend to be more agile and flexible. This is an important differentiator, and one boutique hotels should exploit.
The next sessions covered investment and debt. In the first, Boutique Hotel Investment: Equity, Homi Vazifdar, Founder and Executive Director of Canyon Group, said something truly deflating. When speaking to the current interest rates, which have steadily been rising to double digits, he said that it will get better when the consensus of people just readjust and understand that interest rates will never get back to the low rates of recent years. “We’ll never see those rates ever again.”
The era of cheap money is over. Matt Livian, Managing Director of Prospect Ridge said that in times like these entrepreneurs need conviction, need to have guts, and need a real commitment to get things done. “Some of the best projects I’ve worked on was when interest rates were at their highest.”
In keeping with the financing and investment advice, Rob Kivell, VP Real Estate Financing Group of Goldman Sachs, said the lending markets are seeing some challenging times. While the Covid-19 pandemic is mostly in the past there is good investment activity in southern states, while at the same time, there is an investment pullback in certain cities experiencing the negative headline effect. For example, a property in San Francisco, a city that is experiencing negative headlines, could be penalized by the lender community because of location. There was some optimism from the other panelist Managing Director from the Citi Group, Brad Bloom. He said, “As long as there is staying power and true generators for demand you can usually source funding.” However, Bloom cautioned, “Lenders, by nature, aren’t creative people. If a market doesn’t exist, they won’t take that risk.”
Two of my favorite panels included Hospitality Upgrade contributor Caryl Helsel, founder and CEO of Dragonfly Strategists. Helsel sat down with Michael Achenbaum to talk about his work with Gansevoort Hotel Group and his project to revitalize the Meatpacking district. He advised the audience to focus on underutilized spaces. “When finding new revenue sources, be unique. You need a balance of the space to be used and the people to use the space.” Using available technology to gather and report data points on guests, boutiques can use that information to make a product that guests desire and will spend money on. “Create a level of value and an experience.”
When discussing the topic of lender’s attention, it is Achenbaum’s experience that while it seems like the safer bet would be for lenders to go with the brands, the brands have little flexibility. “(The brands) don’t change their business model when needed. You have to be nimble.” And this agility can be a huge advantage for boutique and independent hotels.
A Candid Talk on Technology
Neil Foster, Global President of HFTP moderated the Candid Talk on Technology panel, a panel consisting of four technology companies: Pace Revenue, Corporate Spending Innovation, DirectTV, and Roomza. Right off the bat, Foster started with the relationship between hotels and the vendor community.
Deborah O’Donnell, Director Strategic Sales, Lodging and Institutions for DirectTV said, “I’m a resource and I want to foster that ‘trusted advisor’ relationship.” COO Pace Revenue Jason Pinto said, “The industry tends to think of technology as a cost and wants to pay the minimum for it. We should start to think of technology as a growth driver and as an enabler.” Pinto said, “Ultimately we’re on this journey together, so look for a partner who will educate you on the opportunities of the platform.”
Neil asked the panel about some misplaced expectations. A few words that stuck out were simplify, communicate and costly. David Disque, President of Corporate Spending Innovations said, “If we’re doing a good job, no one knows we’re here.” However, if the technology isn’t working at 100% everyone complains.
O’Donnell said, “It’s important to have an open dialogue. With technology, it’s either working or it’s not,” she said. “There is no in-between.” When asked for references by a prospect she always sends what she refers to as a challenging installation reference because she looks to forge long-term relationships. Curtis Crimmins, CEO of Roomza, suggested that operators cut through the noise and the marketing to get to what happens when the technology breaks. “All technology is going to break at some point.”
Closing out the technology panel Foster reminded the audience to focus and have courage to know their core competency while leaning on their technology partners as a true resource to which they can rely.
The Boutique Hotel Investment Conference 2023 proved to be an informative and engaging event. Boutique and independent hotel groups came together in a small, intimate setting for two days filled with unique knowledge and expertise from compelling speakers with some provocative content. Hospitality Upgrade and Hotel Online look forward to next year’s event!