Latest / Elevate Podcast: Powered by Braden / Elevate Ep 31: The Business of Hotels with Greg Schahet, President & CFO at Schahet Hotels, Inc.

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Elevate Ep 31: The Business of Hotels with Greg Schahet, President & CFO at Schahet Hotels, Inc. · Elevate Podcast: Powered by Braden

• 0:10
  Welcome to the Elevate podcast powered
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  by Braden. This is your front row seat
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  elevate your leadership, hit subscribe
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  and follow us on LinkedIn for updates
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  and behind the scenes content. Now,
• 0:40
  let's dive in. Hey everybody, Jason here
• 0:43
  with another episode of the Elevate
• 0:44
  powered by Braden podcast. And I'm
• 0:46
  sitting with a new friend of mine who
• 0:47
  has a cool backstory, cool family
• 0:49
  business, uh, interesting guy. Had a
• 0:52
  great lunch the other day. Where did we
• 0:53
  have lunch, Greg?
• 0:54
  >> Sad Jacks.
• 0:55
  >> Sad Jacks. That's right. Good spot close
• 0:57
  to your office. And so, Greg, welcome to
• 0:59
  the show.
• 1:00
  >> Thank you.
• 1:01
  >> Enjoy having me.
• 1:02
  >> You're currently the what at where?
• 1:04
  >> I am currently the president and CFO of
• 1:08
  our company, Shocket Hotels.
• 1:10
  >> Shock at Hotels. Yep.
• 1:11
  >> Which, by the way, that your last name
• 1:13
  is awesome. Shock. It's just it's it's a
• 1:15
  great great last name. It's just like
• 1:17
  you come into a room, it's like you just
• 1:19
  shock at that room.
• 1:20
  >> There you go.
• 1:20
  >> So, love that. And so we'll talk about
• 1:22
  the hotels and the business, but before
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  we get there, where are you from
• 1:26
  originally?
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  >> I am born and raised here in
• 1:29
  Indianapolis.
• 1:30
  >> Okay. So, what part of the city?
• 1:31
  >> I'm a lifer. The north side of Indie.
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  So, grew up on what I would consider the
• 1:37
  northwest side and then kind of migrated
• 1:39
  over to like just north side just south
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  of 96th Street. So, just south of
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  Caramel.
• 1:44
  >> Gotcha. All right. So, just south of
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  Caramel, 96th Street. What high school
• 1:47
  did you go to?
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  >> I went to North Central High School.
• 1:49
  >> Gotcha. All right. So, at North Central,
• 1:51
  before you think about uh what your
• 1:53
  career is going to look like and all
• 1:56
  those different types of things I'm
• 1:57
  imagining, are you going to go to school
• 1:59
  after high school? Are you working? What
• 2:01
  What are you doing?
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  >> Oh, man. Thinking that's a blur way back
• 2:06
  there. But, uh, North Central was a fun
• 2:08
  time. It was a great school and I was
• 2:11
  dead set on going to college. I had
• 2:14
  aspirations of going to a specific
• 2:17
  school.
• 2:18
  >> Okay. and uh never thought I would be
• 2:20
  accepted there but
• 2:22
  by act of miracle I guess I I was
• 2:25
  accepted so ended up going to school at
• 2:27
  Cornell University.
• 2:28
  >> Oh god.
• 2:29
  >> Where they was a hotel school so studied
• 2:31
  hotel administration in college.
• 2:34
  >> So growing up obviously the family
• 2:36
  business. When did the family business
• 2:38
  get started? Was your dad in it at that
• 2:40
  time? And kind of how were you exposed
• 2:42
  in in the early days?
• 2:44
  >> My dad wasn't at that time. So my
• 2:46
  grandfather started the business.
• 2:48
  >> Okay.
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  >> He was a jack of all trades back in the
• 2:52
  day. He the stories I've heard he was a
• 2:56
  originally at one point a Tin Man. I
• 2:59
  don't know if you ever saw the movie
• 3:00
  Tinmen.
• 3:00
  >> Really?
• 3:01
  >> It's a great day with Danny Devida.
• 3:03
  Yeah. Trifus where they sell aluminum
• 3:05
  siding.
• 3:05
  >> Yeah. And then, oh, random story. I'll
• 3:09
  I'll take tangent here, but then he got
• 3:11
  into restaurants and got into Frush's
• 3:16
  Big Boys. Okay, I just had dinner with a
• 3:18
  cousin of mine last week. He's a little
• 3:20
  bit older than me and he was telling the
• 3:22
  story of of a name that I remember for
• 3:24
  another random reason. But it turns out
• 3:26
  one of my grandfather's friends who he
• 3:29
  was invested in the restaurants with was
• 3:31
  a guy who developed slot machines and
• 3:34
  ultimately developed casino. No kidding.
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  But he had a reputation of running with
• 3:41
  an unsavory crowd. It all kind of goes
• 3:44
  with casinos. And my cousin was telling
• 3:45
  me that my grandfather was called to be
• 3:48
  a character witness when this guy was
• 3:50
  trying to get a casino license in Vegas
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  cuz we're like, "No way. We're not
• 3:54
  giving you a license. You associate with
• 3:56
  people we don't like." But yeah,
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  >> he went through the whole process and I
• 4:00
  actually went online and I could find
• 4:02
  like old actual like legal documents of
• 4:04
  this guy's case where it's like Nevada
• 4:06
  Gaming Commission versus so and so. So I
• 4:09
  couldn't find my grandfather's name.
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  That's what I was really looking for.
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  Yeah. Sure. Anyways, my grandfather
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  ended up somehow getting into the hotel
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  business.
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  >> So, so he starts as a tin manning
• 4:19
  because if I understand that's a a sales
• 4:22
  job, right? They're going out door
• 4:24
  todoor selling aluminum sighting, right?
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  Is that is that kind of the job? All
• 4:28
  right. And he was here in Indianapolis
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  doing that.
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  >> I don't know if he was in Indie. I think
• 4:33
  he originally was in Ohio and then
• 4:35
  >> Okay.
• 4:36
  >> was traveling through Indie and liked it
• 4:38
  and was like, I want this territory. And
• 4:40
  I believe that's how we ended up in
• 4:42
  Indie.
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  >> Okay. Gotcha. So at least growing up
• 4:46
  while you were going through, you know,
• 4:47
  middle school, high school, you knew
• 4:49
  what the family business was. And did
• 4:51
  you do did you work there at all during
• 4:53
  high school? Did you do any odd jobs?
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  >> I did. When I knew I wanted to go to
• 4:58
  Cornell, I started working at the
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  hotels. Well, so I had two summer jobs
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  cuz Cornell basically it didn't have a
• 5:06
  work it had a work requirement once you
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  were admitted.
• 5:09
  >> Okay. But to be accepted, it was very
• 5:12
  favorable if you as a candidate had
• 5:15
  experience working in the hospitality
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  industry. So I spent one summer working
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  in a restaurant,
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  >> the Malibu Grill.
• 5:22
  >> Mhm.
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  >> I I can't remember what it is now, but
• 5:25
  it's like on 82nd Street, the
• 5:26
  Indianapolis Monthly. You would have
• 5:28
  never known it, but I made what was at
• 5:30
  the time the best chicken Caesar in
• 5:31
  Indianapolis.
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  >> Oh, just kidding. All right.
• 5:33
  >> Being exciting excited when
• 5:35
  >> seeing that in the magazine. And then
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  the next summer I worked at one of the
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  hotels. We had a Hampton Inn at 71st and
• 5:43
  465.
• 5:44
  >> Okay.
• 5:44
  >> So that that was really my first real
• 5:47
  exposure to the hotels other than like
• 5:49
  staying in hotels or
• 5:51
  >> a lot of times we would stay at
• 5:52
  properties that were owned by friends
• 5:54
  and my dad. So
• 5:56
  >> Okay.
• 5:56
  >> Nice rooms are upgraded and
• 5:58
  >> Yeah.
• 5:59
  >> That's awesome. All right. So you're
• 6:00
  going through high school. You decide
• 6:01
  you're going to go to Cornell. You don't
• 6:03
  think you're gonna get in,
• 6:05
  >> but ultimately they say yes. And so you
• 6:08
  head out to Cornell and how's that
• 6:09
  experience out there?
• 6:10
  >> It was wonderful.
• 6:11
  >> Yeah.
• 6:12
  >> Yeah. I loved every minute of it. It's a
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  a wonderful place. I mean, it's cold, so
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  the winters were long and harsh, but
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  it's a really beautiful place, a
• 6:20
  beautiful area, and a wonderful school.
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  >> Yeah. Awesome. And you're studying out
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  there. You said they have a great hotel
• 6:25
  school. Is that right?
• 6:26
  >> They do. They're uh hotel program is
• 6:30
  known as is one of the best worldwide.
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  It's since been folded into the
• 6:36
  business school,
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  >> but it it still kind of operates a
• 6:40
  little independently and and is has a
• 6:42
  really good reputation within the
• 6:44
  industry.
• 6:44
  >> I gotcha. All right. So, you're heading
• 6:46
  out there. You're at Cornell and the
• 6:48
  goal is to come back into the family
• 6:50
  business. And so, but do you start
• 6:52
  directly with the family business coming
• 6:54
  right out of college?
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  >> Yeah. So, the goal actually was never to
• 6:56
  come into the family business. I wasn't
• 6:59
  100% sure.
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  >> That That's interesting. So, you you
• 7:02
  were you liked the hotel business, but
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  you didn't necessarily think you were
• 7:06
  going to go into the family business.
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  >> No, I didn't. I mean, my dream job as a
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  kid was probably going to work with my
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  other grandfather. He had stores on Long
• 7:17
  Beach Island, which is just outside of
• 7:19
  Philadelphia.
• 7:20
  >> Okay.
• 7:21
  >> I guess you would call them I wouldn't
• 7:23
  say glorified five and it was basically
• 7:25
  the island department store. It was the
• 7:27
  the place on the island where
• 7:30
  anything you need, you can think of, you
• 7:32
  go there, you'll get it. From clothes to
• 7:35
  candy to toys to beach towels, boogie
• 7:38
  boards, everything. And I that was my
• 7:41
  favorite thing is working there as like
• 7:43
  a super little kid. But he sold that
• 7:45
  like in the 80s.
• 7:46
  >> Okay.
• 7:47
  >> So that dream
• 7:48
  >> Well, that but that would have been your
• 7:49
  dream is to go there, live on the
• 7:50
  island, be like a local, know everybody
• 7:53
  and help them as
• 7:54
  >> work in the work. It was called the ship
• 7:56
  out of store. That that was your dream
• 7:57
  as a kid.
• 7:58
  >> All right.
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  >> But somewhere along the line, someone
• 8:01
  planted the seed in my head about
• 8:04
  getting a CPA license.
• 8:06
  >> So, was that was that a family member or
• 8:08
  >> No, I don't remember. It just somehow I
• 8:11
  got in my mind and there wasn't really a
• 8:14
  track where I was to do it. So, I took
• 8:17
  some summer school classes to be able to
• 8:21
  take all the required coursework to be
• 8:23
  able to sit for the exam. And then the
• 8:27
  last summer before I graduated, I did an
• 8:30
  internship and accounting firm here in
• 8:32
  Indie. And then I I after I graduated, I
• 8:36
  went to work for that accounting firm
• 8:37
  for call it two and a half years.
• 8:40
  >> Okay. So, original goal was to go work
• 8:43
  out in the stores out on the island,
• 8:44
  right? That was that was that the dream
• 8:47
  job as a kid. Okay. All right. And then
• 8:49
  so now you finish up school, come back
• 8:51
  from Cornell and are you're working here
• 8:53
  in Indie Y and working at working in
• 8:56
  accounting.
• 8:57
  >> And so is that I mean obviously somebody
• 8:59
  said, "Hey, you might want to think
• 9:00
  about getting, you know, your CPA and
• 9:02
  that kind of stuff. How did you enjoy
• 9:04
  working there? What was that experience
• 9:05
  like?"
• 9:06
  >> You know, I really enjoyed it. It was
• 9:08
  fascinating. I mean, one of one of my
• 9:10
  favorite things was I I did a lot of
• 9:12
  audit work, but I I also did a lot of
• 9:15
  tax work. But the thing I liked about
• 9:16
  the audits,
• 9:18
  like doing the audit work, I didn't
• 9:19
  necessarily like, but going to the
• 9:21
  clients.
• 9:22
  >> Yeah.
• 9:22
  >> And seeing and learning about all these
• 9:24
  different businesses that you just never
• 9:26
  think about. You just like go to some
• 9:28
  random place and they have this thriving
• 9:30
  business doing all kinds of interesting
• 9:32
  things.
• 9:32
  >> That was super cool. But after a few
• 9:35
  years, I just I felt like it wasn't
• 9:40
  something I wanted to do for the long
• 9:42
  term. Like I was looking longterm and
• 9:44
  I'm thinking,
• 9:45
  >> you know, if I'm doing this the same
• 9:47
  thing and I'm going through a busy
• 9:49
  season every year for
• 9:50
  >> 20, 30 years. I just didn't feel like
• 9:52
  that was the best fit for me.
• 9:54
  >> Yeah. The cycle, right, it kind of
• 9:56
  really spools up in the busy season and
• 9:58
  then then it kind of changes a little
• 9:59
  bit, but it didn't seem like that was
• 10:01
  going to be the right thing for you.
• 10:02
  Yeah, it was very repetitive and I
• 10:04
  wanted something a little more unique.
• 10:07
  >> Yeah, it it's interesting though that
• 10:08
  from the accounting side, what you
• 10:10
  really liked was going in meeting the
• 10:12
  business owners, learning about their
• 10:14
  business and kind of the interesting
• 10:15
  things they're doing. So, after a couple
• 10:17
  of years, where where do you decide to
• 10:19
  go? What happens next?
• 10:20
  >> So, when I figured out that I didn't
• 10:23
  want to do accounting long term and I
• 10:25
  was musing about what I was going to do,
• 10:27
  I had some conversations with my dad. He
• 10:30
  said, "Well, why don't you come work
• 10:31
  with me? I can use some help."
• 10:33
  >> Okay.
• 10:34
  >> And I said, "Okay, but I kind of want to
• 10:35
  go to grad school." He said, "Fine, go
• 10:37
  to grad school." And so I went to grad
• 10:40
  school at American University,
• 10:42
  >> okay,
• 10:42
  >> in Washington DC. And I focused on real
• 10:46
  estate and entrepreneurship.
• 10:48
  And then when I finished up there, I
• 10:51
  came back to India and started working
• 10:53
  with my dad.
• 10:53
  >> Gotcha. Great idea though. I mean, how
• 10:55
  did you like being out there and
• 10:57
  studying that? Did you really enjoy
• 10:59
  those courses?
• 11:00
  >> I did. I enjoyed the courses and I I
• 11:02
  really enjoyed living in Washington DC
• 11:03
  for two years. That was fantastic.
• 11:06
  >> Yeah, I mean obviously a lot different
• 11:07
  than it is here, but enjoyed that
• 11:09
  opportunity. So now you're coming back
• 11:11
  and and for the first time and joining
• 11:14
  the family business. What's your what's
• 11:16
  your first role? What are you doing for
• 11:17
  the business? really when I when I first
• 11:19
  came in it was a lot of shadowing and
• 11:23
  just learning everything about the
• 11:26
  business and each of the properties. I
• 11:28
  think at that time we had
• 11:31
  maybe eight properties, six or eight
• 11:33
  properties. So, a lot of it was almost
• 11:36
  like kind of an assistant role, I guess
• 11:38
  you could say, for my dad and uh for
• 11:42
  Jeffrey, who's now our CEO,
• 11:45
  and just kind of shadowing them and
• 11:48
  learning everything that they were doing
• 11:49
  and and just immersing myself in
• 11:51
  everything from operations to finance to
• 11:55
  dealing with franchiseors and
• 11:57
  >> Gotcha.
• 11:57
  >> development and construction. Just kind
• 11:59
  of
• 12:00
  >> a little bit of everything.
• 12:01
  >> Yep.
• 12:01
  >> Gotcha. All right. So, so your dad was
• 12:03
  in the business. Did he grow up in the
• 12:05
  business? Did he start there right right
• 12:07
  with his uh his father?
• 12:08
  >> He did. He went to work with my
• 12:12
  grandfather pretty much right out of
• 12:15
  college and and started they had a I
• 12:18
  think his first the first project he
• 12:20
  worked on they had a hotel in Riverside,
• 12:22
  California. My dad helped build that.
• 12:26
  >> Okay. And then uh yeah, I think that
• 12:29
  that would have been like
• 12:31
  late60s. Okay. So he he was in it pretty
• 12:34
  much from the beginning throughout.
• 12:36
  >> All right. So he would he'd been there
• 12:38
  for quite a long time, run in the
• 12:39
  business, understood it. Well, I'm
• 12:41
  always curious when you get into second,
• 12:43
  third, I've had fourth generation
• 12:45
  business leaders in here and they've
• 12:47
  gone different directions. There have
• 12:49
  been some business leaders that have
• 12:51
  come in saying, "Hey, I think I was 5
• 12:52
  years old knowing I was going to go work
• 12:54
  for the family business." and they went
• 12:56
  directly into the family business and
• 12:58
  others have taken a different path. In
• 13:00
  fact, Jeff Agramman, I think he was
• 13:02
  seven years at a different construction
• 13:04
  company before he came to Agerman. And
• 13:06
  so I'm just curious, you know, there'll
• 13:08
  be other family businesses out there,
• 13:10
  right, where maybe now the third or
• 13:11
  second generation is going to come in.
• 13:14
  From your experience, what was was it a
• 13:16
  good idea to go get an opportunity and
• 13:18
  work somewhere else before you came into
• 13:20
  the family business? I talked to
• 13:22
  somebody the other day. they thought
• 13:24
  that it was better that they just joined
• 13:25
  the family business right out of
• 13:26
  college. What what do you think and what
• 13:28
  would your advice be there?
• 13:30
  >> You know, looking back, I have no
• 13:31
  regrets and I my perspective is that it
• 13:35
  is good to do something a little bit
• 13:38
  different and to get a little bit of a
• 13:42
  different perspective
• 13:43
  >> when coming in and building maybe a
• 13:47
  little bit of a different skill set. I
• 13:48
  mean, my my skill set is mostly
• 13:50
  financial background, but I think going
• 13:53
  out seeing what else is out there Yeah.
• 13:55
  before coming back home, so to speak,
• 13:58
  >> was a healthy thing. At least for me, it
• 14:00
  was.
• 14:00
  >> Yeah. It's interesting. And I there's
• 14:02
  probably no right answer. It's probably
• 14:05
  different based on every situation, but
• 14:06
  always something to think about. But
• 14:08
  some of the folks have worked in
• 14:10
  different areas and then actually
• 14:12
  brought some of that experience into the
• 14:14
  business and developed a new line or
• 14:16
  done something differently.
• 14:17
  >> Okay. So in your role with what you're
• 14:20
  doing today, what what are you doing and
• 14:22
  how are you helping growing the
• 14:23
  business?
• 14:24
  >> So currently my role is focused mostly
• 14:28
  on development in finance and what what
• 14:31
  I would term asset management. So
• 14:33
  managing the portfolio,
• 14:35
  >> okay,
• 14:35
  >> to try to maximize it. It's things have
• 14:38
  changed quite a bit in the industry from
• 14:42
  when my dad and grandfather were doing
• 14:43
  it to to now. Uh my dad has an old
• 14:46
  friend
• 14:48
  who I'm in a peer group with. And he he
• 14:50
  tells me the story of how when they were
• 14:52
  developing in the 80s and 90s, they
• 14:54
  mostly developed these hotels as
• 14:56
  annuities.
• 14:57
  >> Oh, okay.
• 14:58
  >> It would be developed, you know, after
• 15:00
  20 years, you'd probably have the debt
• 15:02
  paid off and then, you know, it's just
• 15:03
  an annuity from that point. Now the
• 15:06
  landscape has changed so much and
• 15:08
  there's much more investment and
• 15:12
  changing in new brands that there's
• 15:16
  there's still people and we still do
• 15:18
  some of it. They're still long-term
• 15:20
  holders,
• 15:21
  >> but a lot of the call it owner operator
• 15:24
  developers don't hold like it was 20, 30
• 15:27
  years ago.
• 15:28
  >> Yeah.
• 15:29
  >> Develop,
• 15:31
  own, operate, sell, reinvest in
• 15:33
  development. that seems do we have a
• 15:35
  remodel and we're doing a little bit of
• 15:37
  that but it because we have like our
• 15:40
  portfolio
• 15:42
  right now
• 15:44
  we there's only one property that we
• 15:46
  have that we had when I got started 25
• 15:49
  years ago and that one's under contract
• 15:51
  knock.
• 15:52
  >> Yeah. So we we have done a lot of that
• 15:55
  and that's something that I struggle
• 15:57
  with now is
• 15:58
  >> when's the right time to
• 16:00
  >> of course
• 16:00
  >> sell or should we sell because the goal
• 16:02
  is always to get an A+ location.
• 16:04
  >> Mhm.
• 16:05
  >> But what's an A+ location in 2000
• 16:09
  >> may not be an A+ location in 2025.
• 16:12
  Though in 2000 it's like this is an A+
• 16:14
  location. It'll never change. Right. Of
• 16:16
  course 25 years later it's like this
• 16:19
  things changed.
• 16:20
  >> Yeah. Why why' we do this? Right.
• 16:23
  Okay. All right. So, but I mean for our
• 16:25
  listeners, you guys have multiple
• 16:27
  properties, mult multiple brands. So,
• 16:29
  tell a little bit more about just the
• 16:31
  business in general and some of the
• 16:32
  brands you guys work with.
• 16:34
  >> We currently have
• 16:37
  seven properties with the one under
• 16:39
  contract to sell with one under
• 16:41
  construction. It's going to open before
• 16:43
  the end of the year and another one
• 16:44
  we're getting right break ground on.
• 16:47
  We are franchises.
• 16:50
  So the way the franchise model works is
• 16:52
  we identify a potential site we want to
• 16:56
  build on. Then we go to either Hilton or
• 16:59
  Marriott. Those are the two we work with
• 17:01
  the most. We we also have one with IHG.
• 17:04
  >> Okay.
• 17:04
  >> Which is the parent company of Holiday
• 17:06
  in.
• 17:07
  >> We go to them and we say, "Hey, we think
• 17:09
  this is a good site for whatever brand.
• 17:12
  They have so many now."
• 17:14
  >> Yeah. And if they agree, we purchase a
• 17:16
  franchise agreement and we build, own,
• 17:20
  and operate the hotel under a license.
• 17:22
  >> Gotcha.
• 17:23
  >> From Marriott Hilton. And generally,
• 17:26
  when we build a new hotel, it will be a
• 17:28
  20-year license.
• 17:29
  >> Okay. And when we get to the end of the
• 17:33
  20-year license, we can apply for a
• 17:37
  license renewal, which
• 17:41
  majority of the time they'll the brands
• 17:43
  will agree to, but they'll require
• 17:46
  what's called a property improvement
• 17:48
  plan. They'll say, "Okay, if you want to
• 17:49
  relic this for another 10 or 15 years,
• 17:52
  we're going to require you to, you know,
• 17:55
  redo the bathroom,
• 17:56
  >> update this." Yeah. redo the exterior
• 17:58
  and redo. We we invest on a regular
• 18:01
  basis.
• 18:02
  >> Sure.
• 18:03
  >> But when it comes time to the end of the
• 18:05
  license, that's kind of the brand's
• 18:06
  opportunity to really say, "Okay, we
• 18:08
  want you to go over and above to keep
• 18:11
  this for another 10, 15 years." And then
• 18:13
  we have to decide, okay, is it worth it
• 18:16
  to do that?
• 18:17
  >> Uhhuh.
• 18:18
  >> Or do we just sell? because it might not
• 18:20
  be worth it to do it because over the
• 18:21
  past 15 20 years the cost of doing that
• 18:25
  license renewal
• 18:27
  >> has grown exponentially like to used to
• 18:29
  be able to do it for you know a million
• 18:31
  maybe $2 million now it's like four or
• 18:33
  five million depending on the property.
• 18:35
  >> Oh wow. No kidding. And and of course it
• 18:37
  also may also be that that A location 20
• 18:41
  years ago is now maybe a B location.
• 18:43
  Right. So you got to take those into
• 18:45
  consideration as well.
• 18:46
  >> Yeah. And hopefully we've if we've
• 18:48
  managed it well and paid down some debt,
• 18:51
  if we want to sell it, it's a it's a
• 18:53
  question of okay, if we can sell it and
• 18:55
  pull some capital out, we can reinvest
• 18:57
  in what we now think's an a location
• 18:59
  versus reinvesting in something that,
• 19:02
  >> you know, we don't think is the best
• 19:03
  idea to reinvest in.
• 19:04
  >> Yeah. Very interesting. So, where are
• 19:06
  the properties located? Are they all
• 19:08
  here in Indiana?
• 19:09
  >> They all are except for the one that's
• 19:12
  under contract. So, the one that's under
• 19:13
  contract is in Skenctity, New York.
• 19:16
  >> Okay.
• 19:17
  >> That's a legacy property. That property
• 19:19
  actually goes back to 1964.
• 19:22
  >> No kid.
• 19:23
  >> And we had another property that we
• 19:25
  built there in ' 07 that we sold last
• 19:28
  year. And then all the other properties
• 19:31
  are here in central Indiana.
• 19:33
  >> How do you how do you find yourself in
• 19:34
  Skenctity to go find properties out
• 19:36
  there? Was somebody living there at the
• 19:37
  time back in the 60s?
• 19:38
  >> No. So the story that I was told was
• 19:42
  back at that time my grandfather really
• 19:44
  wanted to develop a property in Goan.
• 19:46
  >> Okay.
• 19:47
  >> And the holiday and franchise guy said,
• 19:49
  "All right, we got you covered. You can
• 19:50
  have the license for goan." And he calls
• 19:53
  him a few weeks later says, "Sorry, I
• 19:55
  screwed up. Someone's already got go
• 19:57
  under license. You can't have that." But
• 19:59
  I've got a grape site in Skenctity.
• 20:02
  And Skenctity is just outside of Albany,
• 20:04
  about two hours due north of New York.
• 20:07
  And at that time, General Electric was
• 20:10
  still headquartered in Skenctity.
• 20:12
  >> Okay.
• 20:12
  >> So, Skenctity was a pretty good market
• 20:14
  and there was nothing else there. I
• 20:15
  think there was an old u I don't even
• 20:17
  know if it was built in yet, a rom. Now,
• 20:19
  it's part of Union College, but uh
• 20:21
  because of of GE and not much else
• 20:23
  there.
• 20:24
  >> Yeah,
• 20:25
  >> it was uh it was a good market, but then
• 20:28
  GE left and it kind of fell on hard
• 20:31
  times.
• 20:32
  And then they had this great
• 20:36
  this great program that Governor Pataki,
• 20:38
  so this I guess goes back to the maybe
• 20:40
  the 90s put in place called the Empire
• 20:43
  Zone and then he created this great
• 20:44
  development authority in Skenctity and
• 20:46
  we worked with them to develop the new
• 20:48
  hotel. Now Skenctity is
• 20:50
  >> coming back of course. Okay. All right.
• 20:52
  But that's interesting.
• 20:53
  >> Reinvested a lot in there. So it's kind
• 20:55
  of on the that kind of that whole region
• 20:57
  is is turning around because it it was a
• 20:59
  very heavy industrial region and as
• 21:02
  industries closed and moved out it
• 21:04
  suffered but now it's now it's coming
• 21:06
  back. Now
• 21:06
  >> it's coming back right and that this
• 21:07
  kind of cycles right every 20 25 years
• 21:10
  things will change. So it's interesting.
• 21:12
  So the properties are primarily here in
• 21:14
  Indiana and I think you've got maybe is
• 21:17
  there something new on the way? Is there
• 21:19
  a new project?
• 21:19
  >> Yeah, we've got a great exciting new
• 21:21
  project coming. I'm actually heading up
• 21:23
  there this afternoon in Muny.
• 21:26
  >> Okay.
• 21:26
  >> We are building uh on Ball State's
• 21:29
  campus, pretty much the front front door
• 21:31
  of their campus.
• 21:32
  >> Oh, wow.
• 21:32
  >> Uh Tapestry Hotel.
• 21:34
  >> Okay.
• 21:35
  >> It's going to be called the Kantio.
• 21:37
  Kantio is Latin for Songbird. Yeah.
• 21:40
  >> So, the connections to Ball State with
• 21:41
  the Cardinal
• 21:43
  >> and it'll be Tapestry is a what called a
• 21:45
  soft brand.
• 21:46
  >> Okay. So, it's part of the Hilton
• 21:48
  system, but it's its own individual
• 21:51
  brand boutique property. And it will
• 21:54
  have three food and beverage outlets.
• 21:56
  >> Oh, wow.
• 21:57
  >> On the ground floor, it's going to have
• 21:58
  a restaurant called Believe Me.
• 22:00
  >> Okay.
• 22:01
  >> Which is inspired by Bob Ross, who used
• 22:03
  to film
• 22:04
  >> Oh, sure.
• 22:05
  >> his shows in Muny at Ball State. And
• 22:09
  then we'll have a rooftop bar, which is
• 22:11
  going to be a pizza restaurant and it's
• 22:14
  called The Broken Record. And that the
• 22:17
  concept is based on a radio show where
• 22:20
  the DJ would play the record and if
• 22:23
  people called in and didn't like the
• 22:24
  record, he would break the record on
• 22:26
  air. And the the idea is to create an
• 22:28
  atmosphere of a backstage party because
• 22:31
  the hotel is is connected to a new
• 22:33
  performing arts center.
• 22:35
  >> Oh wow.
• 22:35
  >> At the university's building. And then
• 22:37
  we've got a a small cafe on the ground
• 22:39
  floor called Beman's which is inspired
• 22:43
  by Mary Beman who was a famous home
• 22:46
  economics teacher at Butler or at Butler
• 22:50
  at Ball State. And I think we may even
• 22:54
  have some of her recipes.
• 22:56
  >> Oh, no kidding.
• 22:56
  >> For stuff that she made that we might be
• 22:58
  able to use to make some of the stuff in
• 23:00
  the coffee shop.
• 23:01
  >> How cool is that?
• 23:02
  >> We're Yeah, we're super excited about
• 23:04
  the project.
• 23:04
  >> When When's groundbreaking? When do you
• 23:06
  guys get
• 23:07
  >> So, it's under construction.
• 23:08
  >> Okay.
• 23:09
  >> Uh, still to be determined on when we're
• 23:12
  going to officially open, but it should
• 23:14
  be late this year when we get the hotel
• 23:16
  open. So, excited.
• 23:18
  >> That's fun.
• 23:19
  >> I mean, it be a great project.
• 23:20
  >> That's going to be a great project. Good
• 23:21
  for you guys. That's terrific. And so,
• 23:23
  you as you think about continued growth
• 23:25
  and those types of things, are those the
• 23:27
  types of projects you guys are looking
• 23:28
  at? Is like you said, it's connected to
• 23:31
  a performing arts center. Are those the
• 23:33
  types of things you guys are looking at
• 23:34
  for growth? We are we are you know every
• 23:38
  project's unique.
• 23:39
  >> Mhm.
• 23:41
  >> That said we we are trying to find more
• 23:43
  mixeduse opportunities.
• 23:45
  >> Yeah.
• 23:46
  >> That seems to be what people are
• 23:47
  gravitating to when they stay at
• 23:49
  properties.
• 23:50
  >> Y they like the idea of I could get
• 23:52
  something to eat. I could get a cup of
• 23:54
  coffee there. The whole walkability
• 23:56
  factor. Those things this makes it easy
• 23:58
  on people.
• 23:59
  >> Yeah. It it's and it it's where guests
• 24:01
  are gravitating to now. They as opposed
• 24:04
  to, you know, you go back 25, 30 years,
• 24:07
  most properties in our world, the select
• 24:09
  service world,
• 24:11
  it was you found like a good spot that
• 24:13
  had good access to the highway and you
• 24:15
  built and had a big parking lot.
• 24:17
  >> Yeah.
• 24:18
  >> Some of those still work today, but
• 24:19
  people, to your point, they they like to
• 24:22
  go somewhere where they can walk out the
• 24:23
  front door and either be close to where
• 24:25
  their meeting is or where they're
• 24:26
  staying for whatever reason. in there
• 24:28
  also get something to eat or or have
• 24:31
  have some kind of experience versus just
• 24:34
  driving into the parking lot going into
• 24:35
  the hotel and there's nothing else
• 24:36
  around. So, we've we've got one other
• 24:38
  project that we're working on that is
• 24:41
  part of uh mixed juice. It's got office
• 24:43
  and retail and residential. And we did
• 24:47
  one a couple years ago that we're no
• 24:48
  longer involved with, but it was
• 24:52
  done in conjunction with residential and
• 24:54
  retail and and those seem to be working
• 24:57
  really well right now.
• 24:59
  >> Gotcha. As you guys look at areas, I'm
• 25:01
  I'm always curious, right? So, this is a
• 25:02
  Hilton brand or a Marriott brand. Who
• 25:05
  makes the decision? Is it you that makes
• 25:07
  the decision which which brand you want
• 25:09
  to take in and the the type of hotel you
• 25:12
  guys get? How does that work?
• 25:13
  >> It does. We we we examine the location
• 25:17
  to try to gain an understanding of what
• 25:19
  we think will be the best fit there. And
• 25:22
  there's so many more options now. When I
• 25:24
  started, we were primarily like Hampton
• 25:27
  in Holiday in Residence in now. We've
• 25:30
  got stuff like Tapestry and we developed
• 25:32
  an AC
• 25:34
  and we're working on um some other new
• 25:37
  brands. Mhm.
• 25:38
  >> So, it's it's kind of looking and part
• 25:40
  of it is looking what's already there.
• 25:43
  >> So, there's only so many opportunities
• 25:44
  cuz
• 25:45
  >> you can't put you can't put a Hampton in
• 25:46
  next to a Hampton in, right? You got to
• 25:48
  do something different.
• 25:48
  >> Yep. And and and part of it too is
• 25:50
  looking at the brands like if there's
• 25:52
  several Marriotts but no Hilton and you
• 25:55
  put a Hilton branded product there, you
• 25:58
  can take that Hilton demand, but if
• 26:00
  you've already got seven or five or six
• 26:02
  Marriotts, it doesn't make a whole lot
• 26:04
  of sense to put it on a Marriott,
• 26:06
  >> right? Yeah. because they're I mean
• 26:08
  cannibalizing.
• 26:08
  >> That's right. Of course. Okay. All
• 26:10
  right. It's such an interesting business
• 26:12
  and it's one that actually until you and
• 26:14
  I you know talked the other day at
• 26:16
  lunch. I didn't put a lot of thought
• 26:17
  into. I stayed in a lot of hotels. I
• 26:20
  stayed in different places. I have
• 26:22
  primarily been a Hilton person over my
• 26:24
  career. I traveled actually for 15 years
• 26:26
  every week.
• 26:27
  >> But I never thought about operations and
• 26:30
  all those different types of things. And
• 26:31
  is operating the business? You guys have
• 26:35
  multiple brands, multiple things. The
• 26:38
  difficulty in operating the business is
• 26:40
  it is it because you're not you're not
• 26:42
  one thing. You have multiple companies
• 26:44
  you're working with. It's got to be a
• 26:45
  bit of a challenge, right?
• 26:46
  >> It is. It is. You know, probably the one
• 26:48
  of the biggest challenges now is with
• 26:51
  cyber security, each brand has like
• 26:54
  eight layers before you can like log
• 26:56
  into their system. So that's like the
• 26:59
  biggest pain point right now is trying
• 27:00
  to navigate all that. But it is it the
• 27:04
  basics are very similar but each brand
• 27:06
  does have its its different programs and
• 27:09
  intricacies and and we have to be on top
• 27:11
  of all that.
• 27:12
  >> The basics know managing the building,
• 27:14
  cleaning the building, having people up
• 27:16
  at the front desk and you mentioned
• 27:18
  cyber security. It it's it's interesting
• 27:21
  because you've been in the business now
• 27:22
  for quite some time. Speaking about
• 27:25
  technology, how's technology changing in
• 27:28
  the in the hotel business? And I'm
• 27:29
  assuming there's the operational side of
• 27:32
  it, right? Then there's also the kind of
• 27:34
  the functional side out there on site.
• 27:35
  How's tech changing in the hotel
• 27:37
  business?
• 27:37
  >> It's changing
• 27:39
  monumentally. It's like when I first
• 27:41
  started, we had like fracks of equipment
• 27:47
  that had I think it was called DSL,
• 27:49
  >> okay,
• 27:50
  >> to provide high-speed. And it was
• 27:52
  everyone's like, "What's this high-speed
• 27:54
  stuff that we have to?" And and it was,
• 27:56
  you know, now that stuff is like um kind
• 28:01
  of like a fossil,
• 28:02
  >> of course. Yeah.
• 28:03
  >> And everything's changing now with the
• 28:06
  large language models and AI and
• 28:09
  automation. And we're we're working the
• 28:12
  brands are working and we're working
• 28:13
  internally on how to harness all of that
• 28:16
  to create more efficiencies and
• 28:19
  effectiveness and how we manage how we
• 28:21
  communicate with the guests because it's
• 28:23
  it's interesting because the the
• 28:25
  technology can really help a lot but our
• 28:27
  business is still business about human
• 28:30
  contact.
• 28:30
  >> Yeah.
• 28:32
  But you know, some people don't want any
• 28:34
  human contact, some people do.
• 28:37
  >> And navigating all that and having all
• 28:39
  the tools available. It there's there's
• 28:42
  a lot of there's a lot of stuff and it's
• 28:44
  just constantly evolving and changing.
• 28:46
  It's like because they like one of the
• 28:48
  brands will roll out a new technology
• 28:50
  initiative and literally two three years
• 28:53
  later it's basically worthless. They're
• 28:55
  already moving on to the next thing.
• 28:56
  >> Yeah, of course. But it it it is
• 28:58
  interesting if you think about it.
• 28:59
  You're exactly right. Some people they
• 29:02
  want the app, they want the key to come
• 29:04
  to their app, they want to go to the
• 29:05
  room and just do what they need to do.
• 29:07
  But others actually want the experience
• 29:09
  at the front desk or they want those
• 29:11
  types of things.
• 29:12
  >> And the it sounds a lot like a lot of
• 29:15
  other businesses. It if you think about
• 29:17
  it, we're all in the people business.
• 29:20
  We're all about taking care of our
• 29:22
  clients, right? How do we do that and
• 29:24
  give them the best experience that they
• 29:26
  want possible? And in some cases, that
• 29:28
  AI can actually facilitate something for
• 29:31
  someone to go contactless and be able to
• 29:34
  go to the room and take care of
• 29:35
  themselves, but it takes a little bit of
• 29:37
  time off somebody's plate at the front
• 29:39
  desk to actually care for a guest or a
• 29:42
  client that's up there.
• 29:43
  >> So, it actually can help facilitate the
• 29:46
  human interaction by taking away some of
• 29:49
  that day-to-day stuff that, you know,
• 29:50
  can get done a different way.
• 29:52
  >> Absolutely.
• 29:52
  >> Yeah. It's interesting. It's it's you
• 29:55
  know we talk to nonprofits, forprofits,
• 29:58
  very very large companies or you know
• 30:00
  kind of smaller companies but when it
• 30:02
  boils down when you think about large
• 30:04
  language models and you think about AI
• 30:06
  it tends to be I hear the same thing.
• 30:08
  It's how can we leverage it to be able
• 30:11
  to create more opportunities to be human
• 30:14
  >> and that just sounds to me like
• 30:16
  something that everybody's trying to
• 30:18
  work on. So, it'll be interesting to see
• 30:19
  as we continue to chat over the years
• 30:21
  how it changes in the hotel business.
• 30:23
  And it's been fun to learn about just
• 30:25
  the hotel business in general.
• 30:27
  >> As someone that probably had a bit of an
• 30:30
  idea, but I didn't have much. It's it's
• 30:33
  pretty interesting how you guys do
• 30:34
  everything and the financial models. Um,
• 30:37
  so as you think about kind of continuing
• 30:39
  in growth, one of the things we talk
• 30:41
  about is community
• 30:43
  >> and you obviously have multiple
• 30:45
  communities that you serve. You serve a
• 30:47
  lot of guests. you have your people that
• 30:49
  are working for you in your
• 30:50
  organization, but when you think about
• 30:52
  community, what comes to mind and what
• 30:54
  do you think about?
• 30:55
  >> I primarily think about
• 30:59
  the the place where we live and work,
• 31:01
  you know, our our hometown India or
• 31:03
  where we we've been involved in
• 31:06
  Skenctity for 60 years now. So we we
• 31:10
  like to be active where our properties
• 31:13
  are to support not just the the
• 31:16
  properties but to support our staff and
• 31:18
  the people that we employ and and also
• 31:21
  support the areas as well.
• 31:22
  >> Sure.
• 31:23
  >> We want to we want to support our
• 31:25
  surrounding areas. And we we have over
• 31:28
  the years done a lot of I guess you
• 31:31
  could call it philanthropic activities
• 31:33
  mostly in Indie uh but also
• 31:38
  also out in like my folks spend or my
• 31:41
  mom now spends a lot of time in
• 31:42
  California so they're very active and
• 31:44
  >> okay
• 31:45
  >> lots of organizations out there and
• 31:48
  we're active in organizations here. So
• 31:50
  that's that's what we think about when
• 31:52
  we think about community.
• 31:54
  >> Yeah. you get you get an awesome
• 31:55
  opportunity to have different guests on
• 31:57
  a daily basis coming in from all over
• 31:59
  maybe the world and you get an
• 32:01
  opportunity to serve them and by serving
• 32:03
  your internal staff taking care of them
• 32:06
  they'll go take care of your clients and
• 32:08
  that's the end of the end of the uh what
• 32:10
  you guys actually want to do. So, Greg,
• 32:12
  it's it's been interesting as you and I
• 32:14
  have talked, you know, your path to get
• 32:17
  into the family business, kind of how
• 32:19
  the family business started was was
• 32:21
  interesting. Your grandpa being a tin
• 32:23
  man and kind of in that sales role,
• 32:25
  getting into the freshest big boys. Boy,
• 32:27
  I miss those.
• 32:29
  As as a young kid, I I miss I miss big
• 32:32
  boys. You got to go like to Ohio or
• 32:33
  Kentucky now to be able to catch one. If
• 32:35
  we're driving by on the way to Florida,
• 32:37
  my fantasy stuff.
• 32:38
  >> Yeah. just it just they were okay. It
• 32:41
  was a good burger, good fries, always
• 32:43
  like the food there. Service was great.
• 32:45
  And so I'm sure I ate in those places
• 32:47
  probably more than I should have as a
• 32:48
  kid. But it's just interesting and then
• 32:50
  to get himself into the hotel business
• 32:52
  and to see where you guys are now and
• 32:54
  the fun project coming up in Ball State.
• 32:56
  So obviously it's fun working in the
• 32:58
  family business and and doing those
• 33:00
  things. But outside of business, what
• 33:02
  are you doing for fun?
• 33:04
  >> I do a few things. So, I I love to
• 33:08
  travel. I love to read, consume media,
• 33:13
  you know, movies, shows, and I I really
• 33:15
  enjoy running. I run a whole bunch. I
• 33:17
  run several marathons every year.
• 33:20
  >> No kidding. What's a favorite marathon
• 33:22
  spot for you?
• 33:23
  >> Oh, man. There it's hard. I mean, at the
• 33:27
  top of the list would be New York and
• 33:29
  Boston.
• 33:30
  >> Okay.
• 33:30
  >> But also, uh, one that I've run several
• 33:33
  times and is incredibly difficult.
• 33:36
  Probably the most difficult that I can
• 33:38
  think of, but it's so gorgeous as
• 33:40
  Jackson whole Wyoming.
• 33:42
  >> Oh, no. I mean, it's brutal because it's
• 33:44
  uphill and it's elevation, but the
• 33:46
  >> Yeah,
• 33:47
  >> the scenery is unlike anything
• 33:49
  >> everything you see, right? Completely
• 33:50
  different than running here, but
• 33:52
  obviously
• 33:53
  this is a little different training than
• 33:55
  is out there, but there's the natural
• 33:57
  beauty would be awesome.
• 33:58
  >> All right, so travel as well. Maybe a
• 34:00
  fun place you've been to here recently.
• 34:03
  So recently, man, I was like all over
• 34:05
  the place earlier this year, mostly like
• 34:07
  California and Florida, but uh I guess
• 34:10
  it's been two years now. I uh visited a
• 34:14
  friend in Bahrain. So I went to Dubai in
• 34:17
  Bahrain.
• 34:19
  He uh invited a whole group of friends
• 34:21
  over for the F1 race over there. And we
• 34:24
  went to the F1 race there, which was
• 34:26
  >> That's awesome.
• 34:26
  >> Yeah.
• 34:27
  >> Yeah. I mean, anytime you get a chance,
• 34:28
  I mean, F1 races are huge. It's a
• 34:31
  humongous event. always in the coolest
• 34:33
  places.
• 34:34
  >> That's awesome.
• 34:35
  >> Yeah, that was a lot of fun.
• 34:36
  >> Yeah, that'd be a bucket. I'd go to
• 34:37
  Monaco or something like that to see a
• 34:39
  race. That'd be a bucket list thing for
• 34:40
  me. So, that's awesome. Good for you,
• 34:42
  Greg. It was terrific to have you on the
• 34:44
  show. And thank you very much for
• 34:46
  sharing. And and you know, we appreciate
• 34:49
  you. We appreciate your family, your
• 34:51
  family's business, and the opportunity
• 34:53
  that you bring to the community of
• 34:55
  Indiana and serving not only the guest
• 34:58
  obviously with what you guys do, but the
• 34:59
  people who work for you at the hotels
• 35:01
  and creating opportunities for their
• 35:03
  families. So, thank you.
• 35:04
  >> Thank you very much. I appreciate you
• 35:06
  having me here today.