Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Allaway. So, Tracy, obviously,
Speaker 1: one of our big themes so far for the podcast
Speaker 1: and I guess for the economy overall, has been this
Speaker 1: sort of like shortages and bottlenecks that people have experienced
Speaker 1: across across business, across supply chains in the wake of
Speaker 1: the crisis. Bottlenecks everywhere and in everything, it feels like
Speaker 1: sometimes um And of course one of those bottlenecks is
Speaker 1: in the labor market. Yeah, exactly right, Like this is
Speaker 1: I would say the one other sort of like big
Speaker 1: thing that we have we have yet to really talk about,
Speaker 1: which is that numerous businesses, largely in leisure and hospitality
Speaker 1: but not just that area, have voiced I don't know
Speaker 1: if frustration is the word, but have certainly found hiring
Speaker 1: to be much more difficult than they expected, especially coming
Speaker 1: out of a downturn, and even much more difficult than
Speaker 1: it was pre crisis. And the economists of all kinds
Speaker 1: of theories for why, but it's clearly a phenomenon of
Speaker 1: this environment that makes this moment distinct and is posing
Speaker 1: challenges to various managers and bosses and companies. Yeah, so
Speaker 1: I'm obviously not in the States, so I've sort of
Speaker 1: been watching this issue from a far um. It's not
Speaker 1: such a big thing in Hong Kong as far as
Speaker 1: I can tell, but I've seen some of the anecdotes
Speaker 1: about this, like, you know, signs on the front of
Speaker 1: fast food restaurants saying that they can't open today because
Speaker 1: they don't have enough employees or some of their employees
Speaker 1: didn't show up. I also know it's a very heated
Speaker 1: issue at the moment with you know, it's sort of
Speaker 1: like a classic labor versus capital kind of issue at
Speaker 1: this point, with a lot of the companies blaming workers
Speaker 1: and saying they don't want to come back to work
Speaker 1: because they're afraid of getting COVID or because maybe they're
Speaker 1: getting unemployment benefits through the government and so they don't
Speaker 1: feel compelled to go to work, and then the workers saying, well,
Speaker 1: if you really want us to come back, why don't
Speaker 1: you actually do something to encourage us and raise wages.
Speaker 1: I mean, that's the obvious thing for them to do.
Speaker 1: So yeah, it's it's an interesting one, and I'm very
Speaker 1: very intrigued about this particular issue and how it's playing
Speaker 1: out over in the States. Yeah, exactly right. And we
Speaker 1: have seen pretty dramatic wage growth in the leisure and
Speaker 1: hospitality sectors. Employers are jackie up wages to bring people back,
Speaker 1: but it seems like the effect has only been marginal
Speaker 1: so far. And you know, we hear from a lot
Speaker 1: of economists and they have their charts and they say, well,
Speaker 1: that's you know, here's the effective U I, and here's
Speaker 1: the effective childcare and so forth. But sometimes it's also
Speaker 1: really good to actually talk to someone in the ring
Speaker 1: process and get away from all of the theory that
Speaker 1: economists like to talk about. In fact, I think we
Speaker 1: preferred here it's more interesting to talk to people who
Speaker 1: are involved in shipping or trading lumber or anything that
Speaker 1: someone with a lot of like charts and theories. We've
Speaker 1: definitely gone very granular this year. The other thing I
Speaker 1: was thinking like it kind of gets into the overall
Speaker 1: topic of whether or not behavior has changed after the pandemic.
Speaker 1: Is this a fundamental shift in how people are approaching work,
Speaker 1: like going forward, Are they're just going to be fewer
Speaker 1: people who want to work in hospitality for whatever reason
Speaker 1: or is this actually a temporary bottleneck or supply shortage
Speaker 1: that is going to eventually work itself out. Yeah, And
Speaker 1: just to your point, um, there are like signs everywhere,
Speaker 1: like not only does every place up that has a sign,
Speaker 1: but like you go to a grocery store and it
Speaker 1: says in advance, like sorry for the slow service in
Speaker 1: the line, where have you? Every place has a warning
Speaker 1: about that. It's really wild. Anyway, let's get into it,
Speaker 1: because I'm very excited. We're gonna be speaking with someone
Speaker 1: who's like right in the heart of all this going on.
Speaker 1: We're gonna be speaking with Kurt Alexander. Here is the
Speaker 1: CFO at Omni Hotels, which is a big hotel chain
Speaker 1: that has about fifty locations in North America, all very
Speaker 1: high end, and we're going to get into the nitty
Speaker 1: gritty of hiring and operations at a hotel in this environment. So, Kurt,
Speaker 1: thank you very much for joining us. Hey, good morning, Joe,
Speaker 1: Thanks for having me. Yeah, thank you so much for
Speaker 1: coming on. Before we get into this sort of like
Speaker 1: environment right now, you know, let's say like go back
Speaker 1: to say August, you know, or February before COVID. Why
Speaker 1: don't you just sort of like describe a little bit
Speaker 1: about labor turnover and this sort of like you know,
Speaker 1: the labor needs and the general needs of hotel chain
Speaker 1: like omni. Yeah, absolutely, so pre COVID, it was it
Speaker 1: was really a tough operating environment. Then in COVID really
Speaker 1: magnified and accentuated a lot of the things that were
Speaker 1: going on, which I think has been common across all sectors,
Speaker 1: every pocket of life. That COVID has just kind of
Speaker 1: accentuated trends that were already in place. And so pre
Speaker 1: COVID we had about twenty two thousand employees work for us. Unfortunately,
Speaker 1: over that next kind of sixty days from February to April,
Speaker 1: we got down to about people. So it was it
Speaker 1: was a pretty quick shift. But but you know, pre COVID,
Speaker 1: just to touch on some of the trends and kind
Speaker 1: of things that we were seeing, we were seeing mid
Speaker 1: single digit wage growth in the hourly workforce, consistently turnover
Speaker 1: about thirty percent a year again kind of in the
Speaker 1: hourly workforce ranks, and a particular need for culinary talent
Speaker 1: and so uh cooks, sush chefs, et cetera, even even
Speaker 1: kind of waiters waitresses and like um, but but mainly
Speaker 1: back a house culinary and and it was really not
Speaker 1: even a function of wages, it was more functional skills.
Speaker 1: And so we had a lot of conversations pre COVID
Speaker 1: about how can we kind of build our own workforce,
Speaker 1: so to speak. And you know, we have a lot
Speaker 1: of destination resorts, and we thought about maybe even building
Speaker 1: a culinary school and working with the U. S. Government
Speaker 1: on different immigration programs to you know, get people to
Speaker 1: the States and train them and kind of in effect
Speaker 1: build our culinary talent. You know, food and beverage is
Speaker 1: something that we pride ourselves on omni and and and
Speaker 1: so we were really thinking through ways to solve that
Speaker 1: problem in unique ways. And then and then COVID hit right,
Speaker 1: and what we have seen is again culinary is at
Speaker 1: the top of our list. We we we just can't
Speaker 1: find anybody. So just before we get more into the
Speaker 1: actual difficulty of finding the right people, now, maybe if
Speaker 1: we step back for for one second. So I have
Speaker 1: to confess, the only thing I know about the hotel
Speaker 1: industry comes from um that book Hotel Babylon, which I
Speaker 1: guess is really old now. And then it was a
Speaker 1: TV show that was like on the BBC. I think
Speaker 1: for a while it was actually a really good TV show,
Speaker 1: but that definitely portrayed the hotel industry in a kind
Speaker 1: of like glamorous ish light. Depending on what job function
Speaker 1: you were actually doing at a luxury hotel. Maybe you
Speaker 1: could just give a bit more color on the types
Speaker 1: of jobs available at hotels the types of people who
Speaker 1: typically um might be interested in them. Like, what is
Speaker 1: the proposition of going into the hotel and leisure industry
Speaker 1: as an employee. I think it's a really good question, Tracy,
Speaker 1: and and one that probably varies based on the position.
Speaker 1: I think that at certain kind of higher end management
Speaker 1: level positions it is very glamorous and interacting with presidents
Speaker 1: and movie stars and um, you know, kind of living
Speaker 1: this billionaire lifestyle without being a billionaire. I think that
Speaker 1: some of the back of the house type laborer you know,
Speaker 1: um more more entry level. It's just really hard work.
Speaker 1: And so a steward, for example, is a job we
Speaker 1: have at every hotel, and they they clean all the dishes,
Speaker 1: and they clean all the equipment and make sure that
Speaker 1: it's ready to go, and so very labor intensive, very manual.
Speaker 1: Obviously housekeeping, which I know we'll get into later, is
Speaker 1: a very again labor intensive, just hard job, right. I mean,
Speaker 1: a lot of our housekeepers are cleaning twelve to fifteen
Speaker 1: rooms a day, and if if it's kind of a
Speaker 1: stay over service, in other words, you're not checking out,
Speaker 1: but you're just you're kind of in the middle of
Speaker 1: your stay. Will come in and make the bed and
Speaker 1: give you clean towels, etcetera, etcetera, and and and so
Speaker 1: in those cases, sometimes they're doing twenty twenty or more
Speaker 1: rooms a day, right, So it's a really hard job.
Speaker 1: And amorous and kind of posh would not be adjectives
Speaker 1: to describe it, you know. I like the way you
Speaker 1: put that living the billionaire lifestyle temporary. I've never really
Speaker 1: thought about her articulated that way, but now that I
Speaker 1: think about it, I guess that is exactly what sort
Speaker 1: of fun about staying in a nice hotel is just
Speaker 1: like that brief. It's a very different life, and I
Speaker 1: think living in the brief foray in to the billionaire
Speaker 1: lifestyles the way to put it. I don't know if
Speaker 1: I've ever spent a night in an omni, but I've
Speaker 1: been to the Omni and Austin. It is a very
Speaker 1: nice experience. Last question before we move to the more
Speaker 1: temporary conditions, Uh, in normal times, as you know, and
Speaker 1: I guess as the CFO, you're in a good position
Speaker 1: to talk about this. Can you give us like the
Speaker 1: cost breakdown, like how much of the of a hotel's
Speaker 1: costs are labor versus other things like property and so forth?
Speaker 1: Like what is how much of the how much is labor? Yeah,
Speaker 1: a big piece, um, so in round numbers um. In
Speaker 1: nineteen we did about two billion dollars of revenue and
Speaker 1: our labor cost was about seven fifty million. So you know,
Speaker 1: it's it's kind of like you can do everything right,
Speaker 1: but if if you get the labor part of the
Speaker 1: equation wrong, you're you're going to be wrong. And of
Speaker 1: that seven fifty million of salaries and wages, it was
Speaker 1: it's pretty consistently twenty between kind of the management wages
Speaker 1: and then the hourly workforce. And so rough math is
Speaker 1: we have five six hundred million dollars of hourly pre
Speaker 1: COVID right in twenty nineteen, and you're right from my seat,
Speaker 1: I sit there and say, goodness, gracious, ten hourly wage
Speaker 1: increases on a six hundred million dollar number starts to
Speaker 1: get pretty The numbers get pretty big pretty quick, you know.
Speaker 1: But but but it's not even just the hourly. We're
Speaker 1: seeing the wage pressure everywhere. So let's talk about the
Speaker 1: labor shortage then. And one of the things I've been
Speaker 1: wondering is maybe you could break it down for us
Speaker 1: by factors driving it, because I was just thinking about
Speaker 1: your housekeeping um example, and I imagine that cleaning probably
Speaker 1: became even more labor intensive over the past year or
Speaker 1: so given concerns over COVID. So I'm curious how much
Speaker 1: of the labor shortage is driven by the need for
Speaker 1: more work versus how much is driven by an actual
Speaker 1: supply issue. I guess it's classic demand versus supply, right, Yeah,
Speaker 1: I know, it's certainly can be a supply issue, Tracy.
Speaker 1: And and interestingly, and we're not the only hotel company
Speaker 1: that has done this, but but in large measure, we
Speaker 1: have found people don't want someone else in the room
Speaker 1: during COVID um and so it's it's allowed us. And
Speaker 1: like I said, that many other hotel brands to to
Speaker 1: really go in the opposite direction of Hey, we will
Speaker 1: provide housekeeping services if you want it, but otherwise eyes
Speaker 1: we are going to assume that you don't want it.
Speaker 1: And and that has been um a blessing in some
Speaker 1: ways because we have been so short staffed. But in
Speaker 1: a lot of our hotels now over the summer months,
Speaker 1: you know, we're running rates that are up versus nine
Speaker 1: And then you get into kind of the operational value
Speaker 1: proposition of what am I really getting from my for
Speaker 1: my a night and for us we want to be
Speaker 1: able to differentiate ourselves and give you a great experience
Speaker 1: we can get, you know, and so so. But it's
Speaker 1: truly a kind of a supply problem. And what we're
Speaker 1: seeing is as the demand for labor increases, there's just
Speaker 1: this supplies is not there. Can you just talk a
Speaker 1: little bit about the experience of going from twenty workforce
Speaker 1: around twenty plus thousand, eight hundred. So we had the crisis,
Speaker 1: we had the cute shock when basically everything shut down,
Speaker 1: and we know that numerous services based companies had to
Speaker 1: dramatically reduce their workforce and they received some of them
Speaker 1: received PPP money and then the people who got laid
Speaker 1: off were given expanded unemployment insurance. Can you just talk
Speaker 1: a little bit about how that worked at OMNI, Like
Speaker 1: what were the sort of like basics of how government
Speaker 1: aid and the decision making work. And you know, one
Speaker 1: thing I'm curious about is, like, you know, if you
Speaker 1: could talk like did you keep track of in contact
Speaker 1: with the workers who left or with the layoffs so
Speaker 1: that you know, thinking about reopening, just like talk about
Speaker 1: like how that whole experience went down. Yeah, I still
Speaker 1: have nightmares about it, I think, but um, you know,
Speaker 1: it was really tough, and you know, when it started,
Speaker 1: we had a lot of conversation around how do we
Speaker 1: just kind of keep what we have right in Stars
Speaker 1: and some of these other airborne illness shocks, It's it's
Speaker 1: been a ninety day short term deal. That's that bounces
Speaker 1: back pretty quickly. And you know, at the time, you're
Speaker 1: sitting there, well, is this gonna be a ninety day thing?
Speaker 1: And if so, we want to hold on as main
Speaker 1: art workers as we can, or is this going to
Speaker 1: be a a year long thing? And I don't think
Speaker 1: anybody thought really that in our world at least, that
Speaker 1: it was going to still be going on here eighteen
Speaker 1: months later. And so we're sitting there and we're operationally
Speaker 1: kind of pre capex pre debt service. We were losing
Speaker 1: and kind of burning about a million dollars a day
Speaker 1: just operationally um as occupancies dropping and and and so
Speaker 1: then then you kind of get into the question of, okay,
Speaker 1: well we have all these we have this operational cash burn,
Speaker 1: we have capital commitments that are kind of mid midflight,
Speaker 1: and we have dead service. And then it becomes a
Speaker 1: matter of what do we need to do to right
Speaker 1: size our cost structure. Maybe not to the extreme, you know,
Speaker 1: but let's make some kind of prudent decisions and again
Speaker 1: try to hold our core together. We tried to take
Speaker 1: as thoughtful as thoughtful of an approach as we could.
Speaker 1: Right obviously it's it's kind of a crisis mode and
Speaker 1: and and everybody's going a thousand miles an hour um.
Speaker 1: But but we really tried to maintain the leadership ranks
Speaker 1: at all of our hotels. And after we kind of
Speaker 1: hit equilibrium, I guess of saying, Okay, we feel like
Speaker 1: we have right size the organization. Then it's okay, where
Speaker 1: do we need to add back and what are right decisions?
Speaker 1: And kind of the magic word at the time, as
Speaker 1: y'all will remember, was furlow right we're not we're not
Speaker 1: terminating these people. This is just a temporary furlow. And
Speaker 1: and and so to answer your question, Joe, yeah, our
Speaker 1: hotel and our our hotels and our hotel teams were
Speaker 1: keeping in touch with all these employees and still are
Speaker 1: in many cases. You know. So this is a temporary
Speaker 1: furlow in nature, and we'd love to bring you back
Speaker 1: as soon as really the market conditions allow for it.
Speaker 1: And but even then, we we made investments to bring
Speaker 1: back kind of engineers and um housekeepers to kind of
Speaker 1: do what was right for the asset, which and for
Speaker 1: the business fundamentally, you know, repair all the broken shades
Speaker 1: and blinds and make sure all the light bulbs are
Speaker 1: changed and clean to kind of do deep cleanings on
Speaker 1: on all the rooms, and you know, in anticipation of
Speaker 1: demand coming roaring back, and um sadly in some markets,
Speaker 1: you know, we did those deep cleanings and and the
Speaker 1: sheets of accumulated dust on them, and we're gonna have
Speaker 1: to do the deep cleaning again because just because the
Speaker 1: market is so it's so anemic. But it was a
Speaker 1: very very difficult time and uh, you know, a lot
Speaker 1: of hard decisions, a lot of hard conversations. I do
Speaker 1: think that we treat our people better than most. It's
Speaker 1: always kind of what's the measuring stick, right in terms
Speaker 1: of what we kind of paid them on their way
Speaker 1: out the door with for for their furloughs, And I
Speaker 1: think that has helped us bring people back. I'm more quickly. Uh.
Speaker 1: And you know, as a small, relatively small hotel chain,
Speaker 1: we say, you know, we can't out Marryott Marriott. Um,
Speaker 1: so what what can we do differently? And we always
Speaker 1: say we can know our people. You know, Marryott, you're
Speaker 1: just a number in omni We can know you, we
Speaker 1: can help you chart a career path. And uh. And
Speaker 1: I think that that culture and kind of that family
Speaker 1: or family orientation has helped us, whether this whether the
Speaker 1: labor storm again better than most, although we are still
Speaker 1: being dramatically impacted by So can I just ask, can
Speaker 1: you give us a sort of rough idea of how
Speaker 1: much of your workforce was furloughed um during the worst
Speaker 1: of COVID And then I'm just curious if you know, well,
Speaker 1: I'm wondering what the conversations were like. Uh. You know,
Speaker 1: when you're telling someone we're not letting you go, We're
Speaker 1: furloughing you temporarily, and you know, we hope this passes
Speaker 1: as quickly as possible. What the response generally is. And
Speaker 1: then I'm also wondering if you know what people went
Speaker 1: away and did for that period of time. Did workers
Speaker 1: try to get alternate jobs or did they rely on
Speaker 1: you know, the stimulus payments and the extra unemployment insurance.
Speaker 1: I think the first question was kind of what were
Speaker 1: the conversations like? And you know, people always talk about
Speaker 1: the fog of war. I honestly I had several of
Speaker 1: those conversations, UM, and and people are just in shock.
Speaker 1: The person having the conversation since shocked, the person kind
Speaker 1: of receiving the conversations in shock at the trough, I guess,
Speaker 1: or at the peak, whatever you want to say. We
Speaker 1: had about a ninetent reduction in our workforce, UM, so
Speaker 1: roughly twenty eight hundred. We're about ten thousand right now.
Speaker 1: And and and so you know, it's coming back relatively quickly. UM.
Speaker 1: In terms of what people did, it really really varied.
Speaker 1: You know, again, we had conversations of is it better
Speaker 1: to keep these people on payroll and and you know,
Speaker 1: pay them kind of a minimum wage and or you know,
Speaker 1: whatever their wages and uh, and ultimately we decided that
Speaker 1: in every single state they were better off receiving the
Speaker 1: enhanced unemployment because at the time, I believe it was
Speaker 1: an extra h I think it was six hundred dollars
Speaker 1: a week kind of from a federal subsidy, and then
Speaker 1: you have the state on top of that. So you know,
Speaker 1: right now, I think that with the three dollars a
Speaker 1: week in the states that have not kind of opted out,
Speaker 1: I think it works out depending on the state and
Speaker 1: kind of what they fund, it works out it's about
Speaker 1: fourteen to fifteen dollars an hour, and so at the
Speaker 1: six hundred dollars a week, you know, it was a
Speaker 1: twenty plus dollar an hour job in effect. And and
Speaker 1: so I think a lot of people went on unemployment.
Speaker 1: And I know for myself and and maybe fore all,
Speaker 1: but COVID has been a very introspective time of what
Speaker 1: am I doing? Why am I doing it? And I
Speaker 1: think a lot of people when when they're receiving kind
Speaker 1: of maybe in some cases more than they were making
Speaker 1: working in some of these really hard jobs on enhance unemployment,
Speaker 1: that a lot of that introspection takes place of wow, well,
Speaker 1: maybe I don't have to do that job. You know,
Speaker 1: the anecdotes that I've heard and kind of just talking
Speaker 1: to people is that people enjoy work. There's there's a
Speaker 1: dignity and work, and I think we were created to work.
Speaker 1: And so people, for the most part have gone out
Speaker 1: and gotten jobs. And and the kind of the gig
Speaker 1: economy and the the instat cards of the world are
Speaker 1: allowing people to work when they want and make the
Speaker 1: same or better way just and they were making in
Speaker 1: our business. And you know, and we're competing with the
Speaker 1: Amazons and Walmarts and targets of the world for talent.
Speaker 1: And so whereas hospitality we lost a lot of jobs,
Speaker 1: a lot of the retail like Target for example, they
Speaker 1: added jobs. I don't know if you all have been
Speaker 1: in a Target recently, but there's somebody wiping down carts,
Speaker 1: say in sanitizing that that job didn't exist pre COVID,
Speaker 1: and now all of a sudden, that's a fifteen hour job.
Speaker 1: And so you can make fifteen an hour cleaning fifteen
Speaker 1: rooms today, where you can make fifteen an hour cleaning cards.
Speaker 1: And you know, I think that it starts to become
Speaker 1: pretty evident as to why it is so hard for
Speaker 1: the hospitality in the stry to bring people back to work.
Speaker 1: So let's talk about that further. What you know, we've
Speaker 1: been talking sort of big picture about tight labor markets
Speaker 1: or the difficulty of hiring or the constraints of tight labor.
Speaker 1: Could you put some numbers on that, Like what is
Speaker 1: say turnover or quits or turnover? Look like turn these days?
Speaker 1: Is there a way to compare say, like, all right,
Speaker 1: if you post a help wanted, uh notice on say
Speaker 1: the website or somewhere else, like how many applications you
Speaker 1: would have gotten a couple of years ago for that
Speaker 1: versus now, Like can you just sort of like quantify
Speaker 1: basically what we're talking about with the tight labor markets? Yeah,
Speaker 1: uh uh, this is a pretty interesting kind of snapshot.
Speaker 1: And it's on February one, we had two hundred open
Speaker 1: positions in the company. Right now we have twenty hundred
Speaker 1: open positions, and in the intervening five months we have
Speaker 1: hired over five thousand people. So you can kind of
Speaker 1: you know, you do the math and it's kind of
Speaker 1: hard to add up, right, but how many uh job
Speaker 1: openings would you have had, say, like you know, julyen like,
Speaker 1: I'm totally normal time the way I've been looking at it,
Speaker 1: Joe is in in twenty nineteen, we hired about four
Speaker 1: thousand people in the over the course of the year
Speaker 1: so to replace turnover due to seasonality at some of
Speaker 1: our resorts. It's hard to kind of look at a
Speaker 1: snapshot in time. Um, but but we hired about four
Speaker 1: thousand people in twenty nineteen, and in six months of
Speaker 1: twenty one, we've hired five thousand. But but quits and
Speaker 1: and turn is way up. And at some level, I
Speaker 1: don't even know how to quantify it because in many
Speaker 1: cases not in many cases. In some cases we are
Speaker 1: hiring people and they show up for a day and
Speaker 1: then they don't show up again. Obviously that's a quit,
Speaker 1: you know, But but they kind of get into it
Speaker 1: and they're like, oh, man, I do not like this job.
Speaker 1: And or and we've had a lot of conversations around this,
Speaker 1: I don't like an eight hour shift. I like the
Speaker 1: three or four hour shift. And so we're having a
Speaker 1: lot of conversations around how can we kind of break
Speaker 1: that typical eight hour shift down. And so if you
Speaker 1: want to work from eight to eleven, we can utilize
Speaker 1: you if you want to work from two to five,
Speaker 1: come on, you know. And so I think the breakdown
Speaker 1: of this conventional kind of work week is upon us
Speaker 1: um and tracy to your kind of intro question, has
Speaker 1: behavior changed? In my opinion, that is a secular shift
Speaker 1: that is here to stay. You know, you kind of
Speaker 1: put on top of that the gig economy and with
Speaker 1: Uber or instat card, I can get paid the day
Speaker 1: after I work an omni right now, we have twenty
Speaker 1: six pay periods in a year, and so you're getting
Speaker 1: paid every other week. And you know, so kind of
Speaker 1: this access to your earnings more quickly and work when
Speaker 1: you want. And I think that is a secular shift
Speaker 1: that's here to stay and the one that we as
Speaker 1: employers really need to be responsive to. Just one other quick,
Speaker 1: uh anecdote. You know, during COVID we started these things
Speaker 1: called virtual job fair. So what what used to happen
Speaker 1: is we'd have a in person job fair and the
Speaker 1: kind of the big meeting room at one of our
Speaker 1: hotels we would we'd kind of reserved for the day
Speaker 1: and flyers and Craigslist and local advertisements and obviously online
Speaker 1: and uh, you know, we're kind of marketing and building
Speaker 1: up this event and then people come and they interview
Speaker 1: with interviewing for a housekeeping job, with the interviewing for
Speaker 1: a front desk job or whatever it is, and they
Speaker 1: kind of meet the hiring manager and go through the
Speaker 1: interview process in person. And we started virtual job fairs
Speaker 1: during COVID and so that's a zoom call and and
Speaker 1: you you log in and we do the same marketing
Speaker 1: right flyering and Craigslist, etcetera to kind of gin up
Speaker 1: interest in this. And sadly, in Austin we had a
Speaker 1: job fair where we had five ish reservations of people
Speaker 1: saying they were going to come, and about seventy five
Speaker 1: people showed up. So you know, you sit there and
Speaker 1: in in. In typical kind of pre codd times, you'd
Speaker 1: have five people come and maybe higher right yield. But
Speaker 1: when you only have seventy five people show up, right,
Speaker 1: I mean, it starts to become again that supply problem
Speaker 1: is more accentuated. So I just want to press you
Speaker 1: a little bit more on this point because it's really
Speaker 1: interesting and I think very important. So you mentioned that
Speaker 1: you as a company are looking at breaking up shifts.
Speaker 1: You're holding virtual job fairs. Is there anything else you're
Speaker 1: doing to tice workers. I mean the obvious one would
Speaker 1: be on wages, right, are you paying more? And then secondly,
Speaker 1: what has been working for you so far? Where have
Speaker 1: you seen the most success in terms of getting people back? Yeah, um,
Speaker 1: what are we doing? We're doing We're trying everything, and
Speaker 1: I think it's kind of it's it's been fun and
Speaker 1: it's kind of a real life science lab, right for
Speaker 1: us to try to try things and what is working.
Speaker 1: And we have been doing things like offering free nights
Speaker 1: to people if they come work for us, and for
Speaker 1: our culinary which I've mentioned earlier is a real challenge.
Speaker 1: We've been buying a set of knives for some of
Speaker 1: the kind of the kitchen workers who join us. We
Speaker 1: are certainly paying more, we are offering trainings, and we've
Speaker 1: had conversations. We've not done anything in this direction yet,
Speaker 1: but around student loans, you know, is there something we
Speaker 1: can do to help people with their student loans if
Speaker 1: they come work for us, And so we're trying a
Speaker 1: lot of different things. Ultimately, at the end of the day,
Speaker 1: wages are probably the number one factor, although I would
Speaker 1: tell you in our HR team would certainly tell you
Speaker 1: that people want more than just a paycheck, and so
Speaker 1: what is the employee value proposition that we can offer?
Speaker 1: And again it gets back to career path and um,
Speaker 1: we can know you, help you develop, get you where
Speaker 1: you want to be, help you become, you know, kind
Speaker 1: of thrive as a person in in kind of in
Speaker 1: a holistic manner. Those are some of the things we're doing.
Speaker 1: I think that it's been very market dependent as to
Speaker 1: where it's been easier or harder to get labor. And so,
Speaker 1: for example, we have a hotel in Hilton Head and
Speaker 1: it has been always a notoriously difficult labor market, largely
Speaker 1: because there's just not a lot a lot of people
Speaker 1: that live in Hilton Head full time. And so historically
Speaker 1: that hotel has relied on J one's and H two
Speaker 1: b s to your work visa programs here in the US.
Speaker 1: And one thing that I've not seen written about, but
Speaker 1: I think that it has really been happening is a
Speaker 1: lot of the work visas have been kind of held
Speaker 1: up in the government just due to the vast quantity
Speaker 1: of them, and so there's there's kind of a backlog
Speaker 1: of these visa approvals and so typically for the summer
Speaker 1: season in Hilton Head, they'll have, you know, a couple
Speaker 1: hundred J one h two B work visa employees show
Speaker 1: up and these people will come back every summer, and
Speaker 1: you know, and so it's not it's a very kind
Speaker 1: of normal thing. And in this summer, those people have
Speaker 1: not been cleared through immigration to be able to come
Speaker 1: here um and work. And so you know, I think
Speaker 1: that in markets like that, we could offer fifty an
Speaker 1: hour for some of our open positions, and there's just
Speaker 1: not even there's not even people that will that are
Speaker 1: able to take that job. Let me ask you a
Speaker 1: really simple question. You have fifty locations and spread out
Speaker 1: throughout the US. I assume that some are in states
Speaker 1: that have already ended there enhanced unemployment and some that
Speaker 1: are continuing. How big of a this has been a
Speaker 1: big source of debate, and I feel like you should
Speaker 1: have some insight into this. How much has it moved
Speaker 1: the needle in terms of ease of hiring workers in
Speaker 1: the states where the expanded UI has already gone away?
Speaker 1: As you guys know, this is the classic debate for
Speaker 1: US several months why aren't people working? And I will
Speaker 1: tell you this in Texas is one of those states.
Speaker 1: Florida is one of those states um that have kind
Speaker 1: of opted out. And when the news broke that Florida
Speaker 1: was opting out, our application kind of increased by about
Speaker 1: well the day that the news broke that. In other words,
Speaker 1: the subsidies is still going for several weeks. And so
Speaker 1: I think it is absolutely a factor that that people
Speaker 1: are not going out looking for jobs because the marginal
Speaker 1: value of going to work for fifteen dollars an hour
Speaker 1: versus being on enhanced unemployment at fifteen dollars an hour,
Speaker 1: it's a really hard value proposition. That being said, I
Speaker 1: think that there are a lot of other dynamics that
Speaker 1: are causing people not to work. I do think that COVID,
Speaker 1: you know, in hospitality, you are on the front lines,
Speaker 1: interfacing with people that are coming in from around the country,
Speaker 1: around the world in some cases, and it is a
Speaker 1: risk oriented job. When it comes to COVID, you know,
Speaker 1: you read about childcare and kind of difficulties with that,
Speaker 1: and I think that is becoming less of an issue,
Speaker 1: although during COVID it was a very real issue. We're
Speaker 1: we're seeing we we are seeing more traction Joe in
Speaker 1: the states that have ended the hands unemployment. The Kentucky
Speaker 1: I think, was one of the states that rolled out
Speaker 1: and we will actually pay you to go back to work.
Speaker 1: And I think that's a pretty creative way for the
Speaker 1: government to really incentivize a lot of this. And we've
Speaker 1: we've done well our hood hell in Kentucky, although it
Speaker 1: is still challenged even there, right And so I think
Speaker 1: fundamentally what I'm seeing is that hospitality jobs are just
Speaker 1: hard jobs. And so I've read of stat I think
Speaker 1: that there's like nine million people currently unemployed. Um and
Speaker 1: I'll I'm scared how many of those people want or
Speaker 1: would be willing to work in a hospitality job. I
Speaker 1: will actually tip my cap to you, Joe, and to
Speaker 1: some of your colleagues at Bloomberg, you know, reading you
Speaker 1: all and your perspective on this has has informed my
Speaker 1: decision making on what we're doing with wages. I think
Speaker 1: if left to my own devices, I might say, well,
Speaker 1: let's just pay the temp company they do an hour
Speaker 1: that they want, because maybe this is a temporary deal
Speaker 1: with enhanced unemployment, and come labor days and labor markets
Speaker 1: gonna be washed with a washed with people. But but
Speaker 1: we've made the conscious decision that instead of paying the
Speaker 1: temp agency twenty five an hour, uh, to kind of
Speaker 1: have the contract worker we want to control and in
Speaker 1: effect have the quality control of employing our own labor
Speaker 1: and in some cases paying eighteen twenty bucks an hour
Speaker 1: for some of these entry level jobs that may have
Speaker 1: been at twelve, fourteen, sixteen dollars an hour. Pretty good.
Speaker 1: So there is one thing I wanted to ask you,
Speaker 1: And this has also become part of the you know,
Speaker 1: motive conversation that's going on in the States. As far
Speaker 1: as I can tell, it's also part of like a
Speaker 1: joke that goes around, which is that you know, workers
Speaker 1: in manual jobs are told that they're going to get
Speaker 1: replaced by robots all the time, and then suddenly there's
Speaker 1: a labor shortage and the companies want them back. So
Speaker 1: I guess just curious on your take on the on
Speaker 1: the automation issue. Is the experience of COVID and the
Speaker 1: labor shortage going to be something that pushes more companies
Speaker 1: to find different ways of automating jobs um so as
Speaker 1: to avoid this in the future. Or has it sort
Speaker 1: of shown the importance of having human labor. Yeah? Wow,
Speaker 1: For us, we are a people business. And we are
Speaker 1: always going to be a people business for us, kind
Speaker 1: of the human touch, and when you check into a
Speaker 1: hotel and you're greeted by a real person smiling, saying
Speaker 1: welcome to the omni, we think that's fundamentally different experience
Speaker 1: than a chaosk However, I think that what covid is
Speaker 1: is doing and what is happening with lower end wages
Speaker 1: and the twenty plus percent wage growth that we're seeing,
Speaker 1: it's going to make the business case for automation much
Speaker 1: more compelling. And so if you're paying somebody twelve dollars
Speaker 1: an hour and you amortize the cost of a bought
Speaker 1: for example, at a dollar fifty or two dollars an hour,
Speaker 1: you know that's an okay return when you factor in
Speaker 1: all the programming, development and everything else in R and
Speaker 1: D in effect to make that work. But the value
Speaker 1: proposition gets a lot better when you're paying somebody twenty
Speaker 1: an hour, you know. So, so I think that yes,
Speaker 1: it's going to accelerate it, particularly in things like accounting
Speaker 1: in the back of the kind of back office, whether
Speaker 1: that's hospitality or auto dealerships or you guys were talking
Speaker 1: about some things on odd lots that I don't even
Speaker 1: understand that with Defy Defy and cryptocurrency and like, but
Speaker 1: you know, I think I think that what you're gonna
Speaker 1: see across every industry is kind of more automation and
Speaker 1: streamlining in the back of the back office, and companies
Speaker 1: are gonna be making different strategic decisions on kind of
Speaker 1: guest facing as to how they want to position themselves.
Speaker 1: I'm so glad Tracy asked this because my my head
Speaker 1: was going in the same direction, like and you described it,
Speaker 1: like hotels, Many of these businesses are like they're human businesses,
Speaker 1: and even you know, for a long time, like there's
Speaker 1: not much productivity growth in a hotel, like the same
Speaker 1: way you might get from say, like manufacturing, but our
Speaker 1: omni hotels in someone sense more productive, uh than they were. Like,
Speaker 1: how have you learned to make do with resource constraints
Speaker 1: that you haven't had that you didn't have pre crisis. Yeah,
Speaker 1: it is incredible how efficient we are right now. And
Speaker 1: and we we had a kind of a planning session
Speaker 1: about a month ago, and we really had to group
Speaker 1: these efficiencies into sustainable or unsustainable efficiencies. And in many cases,
Speaker 1: the efficiencies that we're seeing are unsustainable, but in some
Speaker 1: cases they're not. And so you know, productivity gains of
Speaker 1: like I mentioned earlier, not cleaning someone's room, that's enormous
Speaker 1: productivity gains uh And and the question then becomes, well,
Speaker 1: what does the market start to demand in terms of services,
Speaker 1: And so we've had conversations around Okay, well, you know,
Speaker 1: a big word that you'll hear in the hotel industry
Speaker 1: has cost per occupied room um and and it's really
Speaker 1: just all the direct costs that go into you staying
Speaker 1: in a room. So obviously you have the cleaning. You know,
Speaker 1: the cost to clean the room. You have the linen
Speaker 1: and the cost to launder. You have the shampoo and
Speaker 1: soaps and everything that people love to take out of
Speaker 1: the rooms, and and and they should write and kind
Speaker 1: of these guests supplies that that we replenish when a
Speaker 1: room turns over. And cost pro occupied room. During COVID,
Speaker 1: even with all the enhanced safety so we we were
Speaker 1: wrapping all of our remote controls and giving people sanitizing
Speaker 1: wipes and masks and everything like that, that only added
Speaker 1: about fifty cents to our cost pre occupied room, and
Speaker 1: and just order magnitude on average, our cost pre occupied
Speaker 1: room is maybe thirty five bucks, you know, kind of
Speaker 1: fully loaded with utilities and everything. My point is that's
Speaker 1: not a lot. And and we are starting to kind
Speaker 1: of roll back some of our COVID. We're not wrapping
Speaker 1: our remote controls and plastic anymore, so we're kind of
Speaker 1: getting away from that. And so our cost projected room
Speaker 1: is gonna drop. And then if you're not cleaning it,
Speaker 1: you're saving a ton of money there. Now again back
Speaker 1: to my point on what do you really want? And
Speaker 1: so we're having conversations around, Okay, if if it costs
Speaker 1: US thirty thirty five bucks on average to clean a room,
Speaker 1: you know, maybe we give our guests choice and so
Speaker 1: would you would you rather have a fifty percent off
Speaker 1: a golf round or or two drinks at the bar
Speaker 1: and free appetizer or a SPA credit whatever it is?
Speaker 1: And you know, and so I think that what may
Speaker 1: happen there is our costs or in effect they return
Speaker 1: to pre COVID levels, but hopefully our customer experience is
Speaker 1: dramatically improved, because some people quite frankly, don't care if
Speaker 1: their rooms ever clean. They don't even care if their
Speaker 1: beds made, and particularly the younger traveler and so you know,
Speaker 1: but they they may be more inclined to say, yeah,
Speaker 1: if you buy me two drinks at the bar and
Speaker 1: a free appetizer. I would love that some of the
Speaker 1: operational efficiencies will be repurposed in other ways and and
Speaker 1: hopefully other value added ways. UM. I think some of
Speaker 1: the efficiencies also, um, when you think about how we
Speaker 1: buy will be maintained, hopefully now offsetting some of the
Speaker 1: commodity price increases that we've seen, etcetera. You know, but
Speaker 1: previously we would buy steak, for example, from fifteen different vendors, uh,
Speaker 1: and each chef and the local market loves that kind
Speaker 1: of their local beef ender. And and we we we've
Speaker 1: really kind of centralized a lot of our procurement and said, okay, well,
Speaker 1: let's let's shrink of fifteen beef enders on it two
Speaker 1: or one, and and so kind of our bargaining power
Speaker 1: with vendors has improved, and I think our pricings imp
Speaker 1: proved now. Like I said, that's being more than offset
Speaker 1: in some cases by commodity pricing, which hopefully is the
Speaker 1: short and it's kind of short term in nature. But
Speaker 1: but that's kind of how I see the future of
Speaker 1: the hotel industry. And I do think that the Marriott's
Speaker 1: and Hilton's of the world are going to make housekeeping
Speaker 1: optional so if you want it, you can pay for it.
Speaker 1: And and kind of embracing the airlines bag fees of
Speaker 1: philosophy particularly and maybe not in the luxury or upper upscale,
Speaker 1: but kind of in the lower chain scales. I think
Speaker 1: that is going to happen, which maybe prepare yourselves and
Speaker 1: and uh your listeners for that. But but an omni,
Speaker 1: I think we're trying to think about how we can
Speaker 1: more address the needs of what the market wants rather
Speaker 1: than just me doing it with with the big brands.
Speaker 1: So that's really interesting. And can I just press you
Speaker 1: on that point because this is something that I want
Speaker 1: to ask you about. We've been talking a lot about
Speaker 1: labor supply, not so much necessarily on the demand inside,
Speaker 1: but how do you see consumer behavior shifting post COVID?
Speaker 1: So maybe people are more flexible when it comes to
Speaker 1: having their rooms cleaned, but is there anything else that
Speaker 1: you see changing in terms of the hotel industry. And
Speaker 1: then also we have seen this big boom in travel
Speaker 1: as the economy recovers and COVID goes away to some extent,
Speaker 1: Do you see that? Like how durable is that? Is
Speaker 1: that a relatively permanent shifting behavior. Everyone is so scarred
Speaker 1: from not being able to travel for a year that
Speaker 1: they're going to do that much much more going forward
Speaker 1: or is that a temporary phenomenon of people just making
Speaker 1: up for the last twelve months or so. One of
Speaker 1: Joe's friends is a guy named Connerson, and Connors has
Speaker 1: been talking about this theme that he predicts of kind
Speaker 1: of a convergence of business and leisure travel and so
Speaker 1: in other words, I've got a business trip to Chicago
Speaker 1: for work, I'm to stay the weekend and and fly
Speaker 1: my family in and so kind of the blurring of
Speaker 1: the lines between business and leisure. And that is absolutely
Speaker 1: a trend that we are seeing and we expect to
Speaker 1: see more so. And I think that when you talk
Speaker 1: about kind of changes in consumer preferences and how do
Speaker 1: people travel, I think that is something that we will
Speaker 1: continue to see. Fortunately for us, the midweek business traveler,
Speaker 1: kind of the road warrior who's on the road two
Speaker 1: or fifty nights a year, that's not a target market
Speaker 1: for us, uh, And so I don't know that that
Speaker 1: will ever be back to to those levels. Uh, you know,
Speaker 1: maybe with blending in some some leisure traveler kind of
Speaker 1: the leisure travel on the weekends, maybe it gets close
Speaker 1: to it. But I think the marginal trip maybe gets
Speaker 1: done on Zoom. A big piece of our businesses is
Speaker 1: group and corporate group and so you know, I Bloomberg
Speaker 1: is having a all hands meeting in California, maybe they'll
Speaker 1: host it an omni and people are flying in from
Speaker 1: all over the country to attend this event. I think
Speaker 1: that a big change that we have seen, which will
Speaker 1: I believe persist probably forever, is a hybrid meeting or
Speaker 1: a hybrid event, you know, Tracy, Whereas maybe you previously
Speaker 1: would have flown into New York for an event, you know,
Speaker 1: from Hong Kong. Maybe you'll do that once a year
Speaker 1: and and three times a year you'll dial in via
Speaker 1: Zoom or Microsoft team or something like that. You know,
Speaker 1: it presents unique a v challenges for us as to Okay,
Speaker 1: you have a speaker on the main stage, how is
Speaker 1: it a good experience for the online attendee? You know.
Speaker 1: But but I think that is a change in kind
Speaker 1: of consumer behavior going forward in terms of Boom and
Speaker 1: travel I think that the lack of international options is
Speaker 1: creating a little bit of a bubble, particularly in the
Speaker 1: resorts right now, and and then many of our resorts,
Speaker 1: which is about a third of our portfolio, we are
Speaker 1: seeing average ray of five six dollars a night, which
Speaker 1: were previously three hundred fifty a night, big average rate,
Speaker 1: big average rates. Uh. And I think in the true
Speaker 1: luxury kind of rich Carlton said, it's not uncommon to
Speaker 1: see over a thousand dollars a night. So I think
Speaker 1: that's a little bit of a bubble that will that
Speaker 1: will pass when the world quote unquote opens up and
Speaker 1: people can go back to London without quarantine for five days.
Speaker 1: And but I do think that kind of this embrace
Speaker 1: of you know, you've seen it with second homes and uh.
Speaker 1: And like I said, with a lot of about resorts
Speaker 1: of maybe a rural or not urban destinations, I think
Speaker 1: is certainly here from a mid for a midterm who
Speaker 1: knows longer term, but where people just say I want
Speaker 1: to get out of a city, I want to go
Speaker 1: to the Hampton's or I want to go to the
Speaker 1: beach in South Carolina, or you know, I think that
Speaker 1: that kind of the I mentioned earlier, the introspection that
Speaker 1: people have had during COVID, I think it has resulted
Speaker 1: in a lot of people saying, I want to enjoy
Speaker 1: my life and I want to have fun and travel
Speaker 1: and kind of being relaxing settings and not not just
Speaker 1: kind of grind it out in an urban setting all
Speaker 1: the time. And so I think that maybe the rates
Speaker 1: right now are a little bit of a bubble, which
Speaker 1: is because there's so much demand. And literally, we're laughing
Speaker 1: one of our hotels. We were trying to limit occupancy
Speaker 1: at a number of our hotels just so we can
Speaker 1: try to provide a good experience for people. And and
Speaker 1: so what we did originally is we raised the rate
Speaker 1: to like, uh a night just hey, if somebody wants
Speaker 1: to pay it, great, you know, but otherwise we're kind
Speaker 1: of good with the number of rooms we have sold
Speaker 1: right now. And it was the week before the weekend
Speaker 1: and that we did this, and literally that day we
Speaker 1: sold like fifteen rooms at thousand dollars a night, and
Speaker 1: and and so we're kind of shaking our heads looking
Speaker 1: at each other. So there's there's really almost no price
Speaker 1: to eye at some of these resort destinations, and it's
Speaker 1: almost comical pricing right, because there's no way I hate
Speaker 1: to say that we can really deliver a great experience
Speaker 1: if you're paying thousand dollars a night, running ninety percent occupancy,
Speaker 1: or at least an expectation, an experience that meets your
Speaker 1: expectation if you're paying a thousand dollars a night. And
Speaker 1: so I think that I do think that some of
Speaker 1: that pricing is a bubble that we'll see received next year.
Speaker 1: But I don't think it's going to go back to pricing.
Speaker 1: So maybe being a maybe you're up ten to fifteen
Speaker 1: percent instead of being up versus nineteen. You know, I
Speaker 1: think this is almost uh, you know, I think we've
Speaker 1: touched on almost all the ground. We've been talking for
Speaker 1: a while. The last thing, you know, I just want
Speaker 1: to like revisit this question, like the new nature of travel.
Speaker 1: I heard the word bleisure once, which is like the
Speaker 1: ugliest word I've ever heard. But you know, you mentioned
Speaker 1: like business and leisure travel combining. I hope bleasure never
Speaker 1: becomes like a word people, but I've heard it. It's terrible.
Speaker 1: But you know, just thinking about like, so what is it? Like?
Speaker 1: What can you do? You know, you're like cognizant of
Speaker 1: this phenomenal like where maybe like someone like you know,
Speaker 1: they don't try level is much for work, and what
Speaker 1: when they do they want to like bring their family
Speaker 1: or make it more of an event. How does that
Speaker 1: how do you how do you take advantage of that?
Speaker 1: Or how does sort of like the services that the
Speaker 1: hotel offers or the promotions change in light of this
Speaker 1: changing behavior. Yeah, so so it all gets down to
Speaker 1: we call we call it kind of local programming. If
Speaker 1: it's getting a local band to play on the weekend,
Speaker 1: or if it's if it's kind of a family oriented
Speaker 1: resort having some sort of family game night or you know,
Speaker 1: obstacle course or uh, you know, we've had conversations with
Speaker 1: I don't know if you if you all have heard
Speaker 1: of Dude Perfect, you know, but it's it's kind of
Speaker 1: a YouTube phenomenon. You should check it out. But it's
Speaker 1: all guys who literally try to do fun stunts. Uh.
Speaker 1: And it's it's throwing basketball's the length of the court
Speaker 1: and seems they can make it, etcetera. Uh. And so
Speaker 1: it's interactive, engaging programming on on site at our hotels. Uh.
Speaker 1: And what can you do an omni that maybe you
Speaker 1: couldn't do elsewhere, and can we do a golf clinic?
Speaker 1: Can we do you know, have some speaker come in
Speaker 1: and on mental health or wellness. And at a macro level,
Speaker 1: if if every hotel try to do something like that,
Speaker 1: you know, that kind of it kind of becomes like
Speaker 1: a if you're an actor right now and Netflix is
Speaker 1: calling your name, Song's calling you, and Apple TV is
Speaker 1: calling you, it's kind of you know, you can name
Speaker 1: your price. I think will be interesting to see. It
Speaker 1: kind of opens up a new sector of the gig
Speaker 1: economy for for folks to do local programming or local
Speaker 1: experiences and if you want a tour of the bourbon distillery,
Speaker 1: or we want to be able to offer those options
Speaker 1: to people. You know, if they choose to embrace the leisure,
Speaker 1: we can't. We we gotta stop using that word. We're
Speaker 1: gonna like manifested it. It was I regret ever I
Speaker 1: have even mentioned that, Hey, what one interesting thing that
Speaker 1: you all may enjoy and facially enjoyed. You're trying to
Speaker 1: ship a Teddy Bear from Hong Kong episode um, But
Speaker 1: it's just kind of supply chain disruption. And when we
Speaker 1: renovated hotel we get a lot of our dressers and
Speaker 1: kind of bedside tables from from Asia, hair dryers, mattresses,
Speaker 1: you name it. When when the ports are backed up
Speaker 1: in l A, you know, it becomes an operational challenge
Speaker 1: for us. And so it's it's more just kind of
Speaker 1: again interesting anecdotes for you all. We we could not
Speaker 1: get hair dryers in our company through our existing vendor
Speaker 1: about a month ago, and so you know, we're trying
Speaker 1: to find different vendors and make sure the speck is
Speaker 1: commercial grade and um and and so it's it's just
Speaker 1: interesting kind of the ramifications of of kind of all
Speaker 1: these shipping things that I've enjoyed listening to on a lot.
Speaker 1: Can I just ask this is something that I always
Speaker 1: wondered about the hotel industry. But I mean, I'm assuming
Speaker 1: everything is standardized in the room, so you must buy
Speaker 1: in massive bulk from a single supplier. So I guess
Speaker 1: in many ways your supply chain is even more concentrated
Speaker 1: and more susceptible to issues than somewhere else. I don't
Speaker 1: know if I'm phrasing that right, but I'm just imagining,
Speaker 1: you know, if you have a hair dryer in every room,
Speaker 1: it's going to be the same hair dryer, and if
Speaker 1: there's an issue with that supplier, then that's a big
Speaker 1: problem for you. Or do you have like a stockpile
Speaker 1: of hair dryers in the basement somewhere that you keep
Speaker 1: just in case it's an issue. Now now, fortunately kind
Speaker 1: of steady state, right we have we have about twenty
Speaker 1: hotel rooms in our company, so twenty hair dryers, and
Speaker 1: those are not breaking. We're not buying a month or
Speaker 1: a year or anything like that. You know, it's it's
Speaker 1: more kind of a replacement cycle. However, we just in
Speaker 1: the middle of COVID we had two hotels under construction,
Speaker 1: kind of brand new hotels, one in Oklahoma City and
Speaker 1: one in Boston, and the one in Oklahoma Cities six
Speaker 1: h rooms. One of Boston's about rooms. You know, it's
Speaker 1: not as maybe acute of of a problem as if
Speaker 1: we're trying to order twenty hair dryers. But but even
Speaker 1: you know, the steady state. If if five percent of
Speaker 1: our hair dryers are breaking, you know, we're buying a
Speaker 1: thousand over the course of a year, um and and
Speaker 1: so you have kind of the replacement plus the new
Speaker 1: build purchasing, and and yeah, you know it's challenging and
Speaker 1: a lot of our suppliers are saying, you know, certain
Speaker 1: it's challenge to get goods from Asia, but it's it's
Speaker 1: almost a bigger challenge to get it distributed via via trucks,
Speaker 1: you know, with the driver shortage that's in that's in
Speaker 1: the States, So that's almost a bigger issue is getting
Speaker 1: it too. And some of our resorts are in remote destinations,
Speaker 1: right and Hot Springs, Virginia or Mount Washington up in
Speaker 1: New Hampshire and um, you know, and so those those
Speaker 1: remote destinations become become a challenge. Well, Kurt, that was fantastic.
Speaker 1: I always love getting to speak to people that are
Speaker 1: right there, uh in the operational side, but and I
Speaker 1: learned a lot talking to you, So thank you for
Speaker 1: coming on an odd lot. Yeah, well it's been been
Speaker 1: a blast. And thanks again for having me absolutely take
Speaker 1: care of Kurt. Thanks, Kurt, that was really good. Yeah.
Speaker 1: I think actually these are like my favorite episodes. Actually,
Speaker 1: I like all our episodes equally. They're like our children.
Speaker 1: But I do think those where you just get like
Speaker 1: really in the weeds, like you know, it's like the
Speaker 1: hair the detail about the hair dryers or the locations
Speaker 1: of some hotels being harder to get. All those things
Speaker 1: I just find like super interesting and like understanding of
Speaker 1: these economy right now. It's kind of like a puzzle,
Speaker 1: and each new episode like this sort of fills in
Speaker 1: a few more details. Yeah, well, I find them a
Speaker 1: sort of like crash courses in individual industries or niches
Speaker 1: of the economy, and you're sort of learning more about
Speaker 1: the natural or the usual state of the business by
Speaker 1: contrasting it with everything that's going wrong at the moment.
Speaker 1: So I certainly learned a lot from that. I thought
Speaker 1: some of Kurt's thoughts on things that are permanent shifts
Speaker 1: in either labor supply or consumer behavior that was really interesting,
Speaker 1: like the idea that going forward we might all be
Speaker 1: paying for daily housekeeping service, or the idea that hotels
Speaker 1: are seriously looking at ways to break up the eight
Speaker 1: hour work shift. That's really fascinating and a big change.
Speaker 1: There's super interesting, like this idea that it's like, well,
Speaker 1: maybe someone just does like a three hour shift or
Speaker 1: something like that, And the way he talked about it,
Speaker 1: it does sound like it's gonna some of it's like
Speaker 1: really is going to be permanent, or thinking like you know,
Speaker 1: it's like his point, it's like, will you can like
Speaker 1: maybe hire workers from a temp agency and you pay
Speaker 1: them twenty five dollars an hour or something like that,
Speaker 1: But that is only like a bridge solution, like okay,
Speaker 1: or it's not a bridge solution. It's a solution predicated
Speaker 1: on the assumption that we return to something resembling pre
Speaker 1: crisis normal. But if you don't think that the pre
Speaker 1: crisis normal is going to come back, then like attempt
Speaker 1: solution is not the answer. And so like thinking about
Speaker 1: things like what can you do on student debt or
Speaker 1: what can you think about getting people onto a better
Speaker 1: career track fast or all of that becomes like, oh,
Speaker 1: this could be like a you know, fundamental change and
Speaker 1: how the labor relations work. Yeah, And I mean when
Speaker 1: you do hear stuff like that, like helping out on
Speaker 1: student debt, um smaller shifts, wage increases, it does make
Speaker 1: you think that maybe the power is shifting slightly in
Speaker 1: favor of labor. So, I mean, that would be an
Speaker 1: absolutely massive change for America, probably one that it's still
Speaker 1: reasonable to be very skeptical of, but like there are
Speaker 1: definitely glimmers of it in that conversation. Yeah, totally. And
Speaker 1: then of course you combine that with consumption changes there,
Speaker 1: you know, business and leisure. Um, you know, I think,
Speaker 1: like I forget it was like one of our episodes.
Speaker 1: I don't know, maybe it was like the one about
Speaker 1: like the Black Death or something. It's like things are
Speaker 1: going to change, and I don't think we like really
Speaker 1: we can only guess, like right now, I think we're
Speaker 1: still just in the guessing phase. But you know, I
Speaker 1: think like there's a reasonable chance that like this sort
Speaker 1: of like ripple effects of this will be feeling it
Speaker 1: years from now in ways that maybe we don't realize
Speaker 1: at first, and then we're like, oh, this really turned
Speaker 1: into a fundamental change in how society works. Yeah, I
Speaker 1: mean you're getting glimpses of it, like I said, and
Speaker 1: there's probably a ton of money to be made if
Speaker 1: you can guess, right, like I guess correctly what is
Speaker 1: and what isn't a permanent change, Like people are going
Speaker 1: to make fortunes off of getting that right. All right, Um,
Speaker 1: should we leave it there? Yeah, let's leave it there. Okay.
Speaker 1: This has been another episode of the All Thoughts podcast.
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at
Speaker 1: Tracy Alloway, and I'm Jill Why Isn't Though? You can
Speaker 1: follow me on Twitter at the Stalwart. Follow our producer
Speaker 1: on Twitter, Laura Carlson. She's at Laura M. Carlson. Follow
Speaker 1: the Bloomberg head of podcast on Twitter, Francesca Levi at
Speaker 1: Francisco Today, and check out all of our podcast at
Speaker 1: Bloomberg onto the handle at podcasts. Thanks for listening.