Josiah: Thanks for making the time to record, Brett. It was a real treat to not only record the first time with you and Casey, but to have a chance to see you both and to see your beautiful property. About six weeks ago now, I was in the Northeast for a little bit. I had one night, I had one weekend and one night to go and experience something in the Northeast. I was like, where do I go? And I was like, I got to go see Brett and Casey. I got to see their property. And for me, I really enjoyed our first conversation. I very much enjoyed seeing you both in person, seeing what you created. And we might get into this, but for me, it connected a lot of things because there’s a lot of beautiful hotels in the Northeast, right? This is the one that I wanted to see because there’s a story. I think you both, what you’ve created is extraordinary. I’ll link in the show notes. They can hear that whole backstory. I wonder if we could talk a little bit about just what has stood out to you, just reflecting on the past year. Since we recorded last, our listeners love that conversation. Over the past year, you’ve been in operations mode, right? Because you did the redevelopment. What stands out to you over the past year as you reflect back?
Brett: Yeah, the big thing for us, when we talked last time, one of the things is we had been renovating this motel in the mountains of Vermont and we had all this stuff that was going for us on social media. We were very fortunate to have hundreds of thousands of people that joined us along for this social media journey. But the biggest thing that was going on in that time is we were living in our own little bubble. We were in renovation mode. We were here by ourselves. We were working every day. We had just gone live and we’re talking to people every day on our phones. But since that point, the biggest thing that’s happened for us since going live is these people are actually coming and staying. And it’s really put a face to the property. What we’ve had is just thousands of opportunities exactly like you had, Josiah, where it’s not just us telling our story and portraying it all online. It’s actually people getting to come and stay with us, which has been great for them because they’re able to come and see that we’re actually the ones running around here every day and running the show. It’s not just a social media front. But then for us, it’s been really cool too, because it’s one thing to renovate this place and have it be more like a real estate play and everything that comes with that. It’s another thing when you have thousands of people that are actually coming and staying and getting to meet people from all over the country, all over the world that are coming to actually appreciate and support what we’ve built. And then just getting to learn and experience everything from them. So that’s been the greatest thing that we cherish from the past year is the real estate play’s cool. The social media play’s cool, but to actually experience and be face to face, it’s one of the things that we appreciate the most about living at our property that you just wouldn’t get if we were remote operators running this place from afar.
Josiah: I just got to jump in there and say it’s, I probably spend way too much time online and there’s something about just being in person that’s refreshing. You have an incredible social media presence. Again, I’ll link to that in the show notes. People can check it out. So that’s extraordinary. But there’s something about just being in person. And I remember having coffee with you and Casey and just talking. We talked a little bit about the area. You gave me some great recommendations, checked out other restaurants in the area. But we just talked about what your journey has been. It was really fun. It was really, really fun. And I think there’s a lot of other guests there that were enjoying this. And so extraordinary from a guest experience perspective. I want to talk about that experience a little bit. I think we got into the real estate side, the renovating this property a little bit. I think one of the things that you and I have talked about is just the power of hospitality from a business perspective. There’s the real estate play. There’s also the operating business. And I think that’s what makes investing in hospitality so interesting. I wonder if you could speak a little bit just to that point, what you’ve noticed maybe on the business investing side. Is that sort of thing that we talked about before sort of played out for you? Were you seeing business value on both of those elements?
Brett: Yeah, for sure. And it’s this really cool cycle that comes around. Because when you come and you buy one of these things, naturally you’re purchasing at a price and you’re putting X amount of dollars into it. And you’re hoping that someday that net operating income at a cap rate will be worth a lot of money. But one of the things that we’ve learned from the operations side is that doesn’t happen unless you actually provide the good business and the good hospitality on the front side. So we’ve been really fortunate. For us, the way this was structured out of necessity is we live here on site at the motel. We were very involved in our renovation, and there were a lot of those things that we did to make sure. What we did here was insane. For a little bit of background, if anybody didn’t catch the first show, is we bought really what was the most rundown motel in our little town of Killington, Vermont. We’re in our 20s when we bought this. We didn’t have a lot of resource. So what that involved is scraping together everything that we needed just to be able to buy this place. But then a lot of blood, sweat, and tears that had to go into actually turning that around. And the fortunate part of that is there’s a lot of value add there from a financial standpoint. You’re able to really create this space that nobody wanted to stay at and then actually turn that into a nice place that people want to stay. So what that results in is it’s a higher ADR. So for us on the financial side, we’ve been able to up our average nightly rate substantially going from around that $100, $150 a night to $200, $250 a night, which is great for us because that allows us to really perform how we need to financially while still being half the price of a lot of the other hotels that are here in town and we were able to achieve that by doing a lot of the work ourselves. So it’s cool to see the financial picture of that play out. But a lot of that is just because of being here, what that’s allowed to do, and being very hands-on at the business. We’re able to interact with a lot of our guests. We’re able to tell a lot of our story, not just online with our social media posts, but for everybody else that just comes and stumbles upon us and drives by for a walk-in visit. And being able to have that experience, tell our story, it’s played out huge in reviews. It’s played out huge in word of mouth. And that’s been one of the things that’s really eye-opening for me coming into this is, it really was a little bit more like an operations real estate play. That was more of my background, but actually learning that it actually is those conversations in the parking lot. It’s people coming into the office. Those are the things that get you the good reviews, or at least in our case, that’s what’s really led to a lot of the word of mouth and it’s turned into this cycle where you come in with this very business play but recognize that it’s actually a little bit of those softer touches that really lead to the long-term driving activities that I know are going to take care of us long-term. So that’s been, it’s been really not only cool to see play out but good for me too as I think about what hospitality will look like for me long-term in this industry. It’s just been a really good lesson.
Josiah: It sounds like it’s been personally rewarding. I’m curious with your business financial hat on, is the business of hospitality more or less interesting, I guess, through this experience?
Brett: It’s wild, man. It’s got high highs and low lows, and I’d say it gets doubled down. So we’re in a market, Killington, Vermont, which is basically, it’s a ski town. Killington Resort is one of the biggest ski resorts on the East Coast. So for us, there’s fall foliage season, there’s summer that are busy, but really a lot of our bookings come from the winter. So I say this in the sense that hospitality is always tricky because you have these periods of immense reward when a lot of people are staying and everything’s working. But it’s a seasonal business and there’s times for us where it’s not great. I’m looking out my window right now and last night it was downpouring and it’s Thursday and it’s cold outside and nobody’s here. But then we’ll have these other periods where it’s snowing and our phones are off the hook and we’re filled out and it’s great. And so that’s been something that’s taken a while to get used to for sure. It is one of those businesses where you got to be able to capitalize on those good days. For us, it’s the winter season, but also knowing financially and putting your smart hat on, knowing when to stuff dollars away for the rainy days. That’s taken some getting used to. I’d say this year’s also been a lot more challenging as well. We’re coming off this COVID time where I was in short-term rentals and a lot of people were getting, I think either getting into this hotel space for the first time or became maybe a little complacent because if you had a nice place that was slapped up on the internet, you were just rocking and rolling all year round. And for us and a lot of the other operators that we’ve been fortunate to get to know, this year has been one of the first times where it hasn’t been that way. We are seeing a lot of those three night stays turn into two or one night stays. We’re seeing a lot of the cancellations come into effect where you have a lot more people trying to cancel last minute. That’s painted the realities of what this business actually looks like. So there is this very bright, beautiful story of creating this beautiful space in a beautiful part of the country and having people flock in and they’re happy and you’re making money and everything’s great. But there has been this other side to it that we’ve really become aware to where it is a seasonal asset class in business and something else that we’re in a time now where I think people are watching their dollars a little closely. Naturally for us, we have some political pressures coming on with Canada and not seeing some of those folks come down that paints the realities of you can have these really good days, but we are a business and you need to be an operator. You need to know when to stuff some of those dollars away. Because not fun days can sometimes come.
Josiah: Certainly. And I mean, this is what you’re describing are pressures that are being experienced across the country, across different types of hotels. Obviously it varies in different parts of the world. But I think the whatever the economic climate is, I think that duality of the hotel business of being the real estate play and the operating business. You’re very smart and savvy on both elements of that. And I think the operation side, I saw as a guest there in very specific things, like the technology experience. And I wonder if you want to talk a little bit about that, because I think as a guest, I was able to book my room, I feel like in about 20 seconds, it felt so fast. And it was this highly digital experience, which everybody talks about, but as a guest going through that, it felt like it was just a couple clicks on my phone. I think I paid with Apple Pay. It was light years ahead of anything else I’ve experienced recently. I wonder if you want to talk a little bit about that. It feels like you’ve made investments in things like this. Again, there’s volatility, but you control what you can control. I feel like you’ve created this really interesting, efficient operating business.
Brett: Yeah, absolutely. And I’m glad you bring this up, because this is something that I’d say I blindly obsessed about early on in the process, not really knowing what the benefit would truly be. But one of the things we learned coming into this, and for us, it was out of necessity. When we were coming in, it was just my wife and I here. We’re doing this a lot of first time. We didn’t have a lot of the resources and capital to go hire big teams of people. So we had to rely on technology. And it’s one of the things that we’re so fortunate about in today’s day in hospitality, is it is incredible, the resource that’s at your fingertips in terms of software that you can do so for us it’s booking systems that are available to us just like you experienced so that we can create a website but a lot of this plug-and-play technology that’s out there at these property management softwares that allows you to create these really streamlined booking process that other people are putting so much money and time into what is that user experience being so easy to just pick your dates see everything that you need to to make a decision that we’re lovely place that you want to come stay quickly be able to pick your dates get the best price that you can see and then just go and be able to book that in just a couple of clicks and then for us. That’s almost just where it starts there’s so many technology pieces that we’ve layered in the background so that. You Josiah, you go and you book that room, right away you’re going to get texted a code that’s the last four digits of your phone number and a nice automated text that has everything that we’ve learned that you need to be able to get into your room. You come, you plug those four keys in. Even the way that we’ve automated those text messages of check-ins along the way, do you need anything, you come back to us. It’s things that have gone along that have made our world incredibly, incredibly easy to be able to operate. Truly very efficiently with limited staff but also still not have that positive experience for the guest but one of the things that we’ve learned we valued as well as how do you combine this level of technology without losing the face in the hospitality behind your business and it’s one of the things that as time’s gone on. It feels like we’ve been able to do really well here is implement some of the technology, whether it’s pricing tools, guest access tools, other automation things to make sure that our cleaners know when they have to come and clean these rooms without us having to physically handle a lot of those conversations. Streamline all of that while still being on site and here at the property. But what that’s allowed us to do is we can spend more time interacting with our guests, wandering out in the parking lot to have some of those conversations, knowing that everything is going on behind the scenes. And for us, it’s worked out great because if you’re a guest that you just want to come and you’re driving up here late after work on a Friday night, it’s 10 o’clock at night, you’re in a snowstorm, coming to ski, you just want to come crash in bed. You don’t want to talk to anybody. You don’t want to wait in line. Everything is in place to be able to do that. But on the flip side, if you found Brett and Casey on social media and you want to come and you want to have a conversation, you’re like, who the heck’s running this operation? We’re here and we’re in the office and we’ll come have a conversation with you. And it’s really turned into a beautiful thing for our business.
Josiah: That’s so great. But I wonder if you’d be willing to share some of the names of the technologies that have made the biggest impact on you. Because I spent most of my career in and around hotel tech. And I’m always curious, from the operator perspective, what’s actually working for you?
Brett: Yeah. And the beautiful thing is it’s not that complicated. So we are using a software called Cloudbeds, which is the property management software that literally runs our hotel. Cloudbeds is the hub in the wheel of our business. So they’re the middle, all the bookings, they control the booking flow, the text message, being able to be on Airbnb, our own direct booking site, Expedia, booking.com, and have all that be managed in one place so that our 17 rooms don’t get overbooked. They really quarterback a lot of that play. And then what we’re able to do is then when they’re the hub, we can then connect in other software pieces to connect the dots where we need. So we put the Schlage Encode lock. So if you’ve been in the short-term rental world, they’re probably not new to you, but they’re very new to a lot of the hotel people out there. So Schlage has a lock called the Encode that connects to the Wi-Fi, and then that links right in directly to our Cloudbeds property management software. So that’s what allows us to have this ability to just text you your code that’s the last four digits in your phone number. Cloudbeds is running is the hub that says hey lock you need to set up this four digit code and then it goes and texts that to Josiah and it said hey here’s how you get in and all the other pieces that you need the other one that’s been really wild that we discovered recently is a tool called RoomPriceGenie and one of the biggest challenges that we’ve had in our business is things happen so fast you will have a rainy day where nobody staying here all the sudden that turns over to snow and all the sudden bookings are flying in and I’ve been trying to figure out how to manage and do a lot of that pricing and sometimes I end up way higher than I’m supposed to be and guests are paying more than they should other times I’m too low so there’s been cool tools like that. that can help dynamically set our pricing as well. That’s been a really, really win-win for us as the operator, but also the travelers too to make sure that we’re priced appropriately. So those are a couple of the key ones that we’ve used. But again, it’s been nice where I think even historically where you might have to have five, six, seven tools that you’re all having to tag together and link with these complicated API Zapier connections to make work. We’re able to have one quarterback that for us is Cloudbeds. There’s other incredible ones like Mews is another really good one out there that’s really taken the US by storm right now that can really be the center of your entire hotel operation. And then it’s just kind of like Lego, plug and play little blocks to make it all come together.
Josiah: I love that. I wonder if we could just spend a couple moments talking just to wrap this up, talking about operations, because I think what was cool in talking with you and Casey is that this inn is not your only one. Part of your journey was managing another property. I would love just high-level thoughts around what you learned around what it takes to operate effectively. We talked about technology. We talked about some components of this, but anything else come to mind in terms of what you have learned it takes to be a great operator?
Brett: Yeah, for sure. So one of the things that this technology has allowed us to do is it’s freed up some of our time so we can focus on social media, we can focus on our guest experience. It also gave us the opportunity to take over management of another property, the Grey Bonnet Inn, right down the road, which is a big undertaking. It was a 42-room hotel with a restaurant and everything like that. It was really cool because what this technology allowed us to do is that we could run that other hotel and all the same systems that we’re doing here and right off my phone, all the guest messaging, everything from those properties, the door locks, everything like that could flow into one place. But it was also eye-opening too. There are other skills that you have to develop as an operator in this space. So naturally, as we got into some of those bigger properties, you need more staff. You need more people. And that’s one of those things that technology, whilst there is a lot that you can do in managing cleaning schedules and everything like that and payroll and everything like that rolled into one to free up your time, it really pushed us outside of our comfort zone, having for the first time ever learned how to hire. So for a little bit of context, Après Inn, which is our primary property, it’s a small 17-room, exterior corridor hotel that we’re able to put those locks on every door and run very efficiently. We’re able to contract out a lot of the cleaning because of the room size. It works at the scale to be able to do that. But when we got into this bigger property, it wasn’t necessarily the case. You get to the point where you have to bring on your staff online. So again, you can automate aspects of that. But it pushed us to have to become more leaders in our business as well, both in terms of the hiring side, leading people through a lot of these busy weekends. And it became a lot. It was a beautiful thing that the technology, it physically allowed us to do this. And going bigger also allowed us to achieve a lot of economies of scale. We were able to hire out some of our own cleaning team. Now when we’re ordering soaps and linens and things like that, we can do it at a bulk scale that made both properties operate much more efficiently. But it also made our 17 unit property look seem very beautiful too. We recognize that while it can seem very shiny and beautiful to go bigger in terms of scale, there’s a lot that comes with running a restaurant and the staff that goes into that and pools and things like that that while people love, they cost a lot of money. And it’s really made us love our little 17-room hotel as well. So it’s been something that’s shaped how we think about it. What I’ll say it’s done is it’s opened our opportunity that hey, today’s day and age, there is an opportunity to have multiple properties and not have that necessarily mean two times the work for you. But it’s also made us realize that there really is a beautiful opportunity in a lot of these 15 to 25 room boutique roadside motels that transparently, I think, are a lot of the properties that still need some love right now, at least going around New England. They’re the ones that you see have fallen in between the cracks where they’re a little bit too big for some of the short-term rental operators, the day-to-day person, but they’re smaller than what the big hospitality groups want to take on. And what we found is I think that’s really where the opportunity is for a lot of people like us that maybe you’ve run a couple of short-term rentals, you understand how this technology works, or you’re willing to learn more about it and how it’s implemented, and really be able to run some of these properties in tandem with each other that can operate very lean, very self-sufficient without a lot of staff on site, but also are the properties that need a lot of love right now because they’re the ones we’re seeing falling into ruin, but create this really, really cool canvas for you to make your own.
Josiah: That’s amazing. And that’s the opportunity, right? I think pulling all these elements together, being smart on the financial, the investment side, but also on the operations side, right? And that’s where you create a really interesting business.
