Latest / Money And Wealth With John Hope Bryant / The $250 Billion Hotel Industry and How It Works

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The $250 Billion Hotel Industry and How It Works · Money And Wealth With John Hope Bryant

0:00
Speaker 1: Welcome the Money in Wealth with John Hobryant, a production
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Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey,
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Speaker 1: this is John Hope Bryant, and this is Money and Wealth.
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Speaker 1: And this is an extension of my work at Operation Hope,
0:22
Speaker 1: where I'm the founder, chairman, and chief executive officer, the
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Speaker 1: largest financial literacy coaching organization in America, over three hundred
0:32
Speaker 1: offices and physical offices and fifteen hundred total satellite and
0:36
Speaker 1: physical offices in over forty states throughout the country. And
0:40
Speaker 1: we're thirty years deep, and we're best in class and
0:44
Speaker 1: what we do, and we help to create financial literacy
0:46
Speaker 1: policy for the US federal government, where I've served as
0:49
Speaker 1: an advisor for three US presidents from both parties. And
0:52
Speaker 1: I'm also an entrepreneur and a businessman, having created over
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Speaker 1: forty entities, including the largest platform for faundly residential rental
1:01
Speaker 1: real estate for a person of color in the country,
1:04
Speaker 1: that was the Promise Homes Company. And then there are
1:06
Speaker 1: other ventures that I have involved myself in and I'm
1:09
Speaker 1: involved in which gives me the credibility to talk to
1:12
Speaker 1: you here. But as I want to be at everybody's
1:15
Speaker 1: kitchen table, I want to empower all of you. I
1:17
Speaker 1: can't get to everybody, and maybe everybody has not yet
1:20
Speaker 1: yet accessed the power of operation hope. I don't know
1:23
Speaker 1: you should because through the fundraising I do, and we
1:26
Speaker 1: do your scholarship in But in case you have not
1:30
Speaker 1: done that, I wanted to give you a teaser version.
1:34
Speaker 1: I wanted to be able to unpack capitalism and free enterprise, economics, ownership, opportunity,
1:40
Speaker 1: financial literacy and repack it with you in mind to
1:44
Speaker 1: get you from the streets to the c suites where
1:47
Speaker 1: executives make critical business decisions and you can decide whether
1:52
Speaker 1: you want to be one of them or maybe you
1:54
Speaker 1: don't want to cash a check meaning to be an employee,
1:56
Speaker 1: maybe you want to write one. Maybe you're a business owner.
1:59
Speaker 1: So I want to give you a platform for that too.
2:01
Speaker 1: So I'm giving you a whole year of episodes that
2:04
Speaker 1: will allow you to have a portfolio, a library of
2:11
Speaker 1: learnings that can transform your life and give you optionality
2:15
Speaker 1: you have before, and you can pass it on to
2:17
Speaker 1: somebody going to college or starting their life or getting married.
2:20
Speaker 1: Say look, just read this book Financial Literacy for All,
2:23
Speaker 1: which is the book I wrote number one book on
2:26
Speaker 1: business finance in the country for the last four months.
2:28
Speaker 1: By the way, if you don't have it, get it.
2:30
Speaker 1: If you already have it, review it. Ultimately, I want
2:33
Speaker 1: over a thousand reviews online. We're over one hundred and
2:37
Speaker 1: twenty five positive reviews now almost five star reviews. And
2:43
Speaker 1: so share your experience because your opinion matters most to
2:47
Speaker 1: others who are looking to have confidence to take back
2:50
Speaker 1: their life. So here you are. You have the book
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Speaker 1: Financial Literacy for All, my sixth book, number one bestseller
2:56
Speaker 1: in business finance. You've got Operation Hope number one in
2:58
Speaker 1: the country of financial literacy coaching, counseling, financial literacy education,
3:02
Speaker 1: certainly in underserved neighborhoods. You have my personal experience as
3:06
Speaker 1: an entrepreneur with a lived experience. I'm not telling you
3:08
Speaker 1: what I don't know. And now you've got the actual toolbox,
3:13
Speaker 1: which is this podcast Weekly Ministry of Finance I have.
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Speaker 1: And today we're going to dive into and unpack the
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Speaker 1: hotel industry. Now, it's a pretty provocative statement I've made,
3:26
Speaker 1: is a two hundred and fifty billion dollar plus industry
3:31
Speaker 1: in America. Two hundred and fifty billion dollar plus. The
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Speaker 1: hotel industry does not include the Airbnbs and others. This
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Speaker 1: is just hotels, right, two hundred and fifty billion dollars,
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Speaker 1: and I made the provocative statement that half of that
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Speaker 1: is controlled by minorities. What the heck? Yes, I want
3:50
Speaker 1: you to be inspired. Before I break down the hotel
3:53
Speaker 1: industry and tell you how it works. I want to
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Speaker 1: tell you who's doing it and who and how minority
4:01
Speaker 1: group controls half of this entire sector of hotels. So
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Speaker 1: let's get into it. Indian Americans own a significant portion
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Speaker 1: of hotels in the United States, inspiring particularly those well
4:20
Speaker 1: I'm talking about Indian As from India, so you know
4:24
Speaker 1: native American Indians unfortunately, right, these are Indians from their
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Speaker 1: native country of India, who own fifty percent share in
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Speaker 1: all hotels in this country. The phenomenon is largely associated
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Speaker 1: with immigrants from the state of Gujarat in India, especially
4:45
Speaker 1: from the Patel community. All Right, so the Gujarat region.
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Speaker 1: A substantial number of Indian American hotel owners are from
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Speaker 1: this region, a state in western India. I've visited India,
5:02
Speaker 1: the Triangle they call it, which is Delhi and Roger
5:06
Speaker 1: starred and Jaipor. I mean, India's amazing wonderful place. Really
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Speaker 1: a country. You've got fifty countries within the country really
5:15
Speaker 1: when you think about it, with all of the dialects
5:18
Speaker 1: and cultures there. And again my experience mostly was in
5:23
Speaker 1: Delhi and around that area, but you have other areas
5:27
Speaker 1: like this area Agujarat, that's in western India where the
5:31
Speaker 1: Patel community also known as Patidar in particular, originate. Their
5:37
Speaker 1: surname becomes synonymous with the hotel industry in the United
5:40
Speaker 1: States in the mid twentieth century. The initial wave of
5:45
Speaker 1: immigrants arrived in the US, you know, in the mid
5:49
Speaker 1: nineteen hundreds, investing in small motels as a way to
5:53
Speaker 1: achieve economic stability and upward mobility. Up from Nothing. That
5:58
Speaker 1: was my last book, by the way, Up from Nothing.
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Speaker 1: The surname has become synonymous with this sector, and for
6:07
Speaker 1: good reason. They actually are extraordinarily good at this and
6:12
Speaker 1: they have vertically integrated their space. Their habit has to
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Speaker 1: been to create just really great structures for business and
6:23
Speaker 1: no surprise, hire those they know and really they're family members.
6:29
Speaker 1: There was an immigration act, the Nationality Act of nineteen
6:35
Speaker 1: sixty five, which allow for greater numbers of skilled workers
6:38
Speaker 1: and their families to enter the US and this was
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Speaker 1: a sort of a triggering opportunity for those who want
6:47
Speaker 1: to come here and to build entrepreneurial activity and businesses
6:52
Speaker 1: and to gain asset ownership. The Patel community and other
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Speaker 1: Gujerati immigrants brought with them a strong entrepreneurial spirit. They
7:02
Speaker 1: often pulled resources within their extended families to purchase and
7:07
Speaker 1: manage hotels motels. Mostly, this practice of communal financing and
7:13
Speaker 1: support helped them to gradually expand their holdings. Not you know,
7:18
Speaker 1: this was not some organized situation of group think where
7:22
Speaker 1: you have one corporate entity that owns these hotels. These
7:25
Speaker 1: are a group of entrepreneurs and business owners. And yes,
7:29
Speaker 1: entrepreneurship and business ownership are different. Maybe I'll do that
7:33
Speaker 1: as a separate podcast. But as a group or as
7:36
Speaker 1: a community, they own once again fifty percent market share
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Speaker 1: in this area. They collaborate, cooperate together and quickly in
7:46
Speaker 1: the area of pooling their finances, I've already mentioned many
7:50
Speaker 1: Indian American hotel owners started with budget hotels and they
7:55
Speaker 1: gradually expanded their business through hard work, being very frugal
8:00
Speaker 1: and reinvesting their profits. They didn't floss, uh, they just
8:05
Speaker 1: wanted to be the boss. They often lived on site,
8:08
Speaker 1: meaning they lived in the hotels and motels. They managed
8:13
Speaker 1: operations themselves and kept low costs or kept their costs
8:17
Speaker 1: low to maximize their profitability by again you know, hiring
8:21
Speaker 1: their family members and you know living. They didn't have
8:26
Speaker 1: any living expenses because they were staying on property, which
8:29
Speaker 1: means they didn't have to cut a check to themselves,
8:32
Speaker 1: which would have taken profitability out of the business enterprise. UH,
8:39
Speaker 1: Indian American hotel owners. When I say hotel, I mean
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Speaker 1: motel and the entire I'm gonna get into the categories
8:46
Speaker 1: of what makes up the hotel industry in a minute,
8:49
Speaker 1: but I'm saying in general, in general terms hotels at
8:52
Speaker 1: the moment, which includes moteils, et cetera. They've established a
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Speaker 1: strong network and associations such as this is the Indian Americans,
9:02
Speaker 1: such as the Asian American Hotel Owners' Association, which provides support, advocacy,
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Speaker 1: and resources for their members. They're one of the largest
9:12
Speaker 1: such organizations in the US and is played a crucial
9:15
Speaker 1: role in the success of Indian American hotel owners. Now,
9:19
Speaker 1: what poor group has a lobbyist in Washington, what struggling
9:23
Speaker 1: group like this is one of the problems. If you're
9:25
Speaker 1: not at the table, you tend to be on the menu.
9:27
Speaker 1: And these folks made sure that they realize that legislation
9:31
Speaker 1: was going to be created in Washington, whether they liked
9:32
Speaker 1: it or not. And when you're being run out of town,
9:34
Speaker 1: get in front of the crowd and make like a parade.
9:37
Speaker 1: So these folks decided to get in the game and
9:40
Speaker 1: not complain about it to masterate. That's so what I
9:41
Speaker 1: talk about about financial literacy, as I say all the time,
9:45
Speaker 1: because the Freedmans Bank eighteen sixty five, when a bank
9:50
Speaker 1: charted to teach free slaves about money, Lincoln was killed
9:53
Speaker 1: and the bank was lost, even though Frederick Douglass of
9:55
Speaker 1: Great Black Entrepreneur tried to save it. That as a
9:58
Speaker 1: result of that, it does not get the memo for
10:00
Speaker 1: one hundred and fifty years. We're not dumb and we're
10:02
Speaker 1: not stupid. It's what we don't know that we don't know.
10:04
Speaker 1: This killing is what we think we know because no
10:07
Speaker 1: one ever taught us what I'm telling you now, which
10:10
Speaker 1: is how capitalism and free enterprise works. And so in
10:14
Speaker 1: many ways we've been afraid of money. We think we
10:16
Speaker 1: thought that money was evil, and money's not evil. The
10:18
Speaker 1: love of money is evil. And here is the exact
10:21
Speaker 1: opposite of that example. They understood that this group understood
10:24
Speaker 1: of Indian Americans and from India that they had no
10:28
Speaker 1: political power. They had no they weren't part of the
10:32
Speaker 1: class structure. Here all that stuff the power structure. So
10:36
Speaker 1: they had to create their own influence and power through ownership,
10:42
Speaker 1: through making a profit and reinvesting it back in their
10:45
Speaker 1: own communities, and through having a trade association of their
10:49
Speaker 1: own that was focused on, you know, managing legislative process
10:54
Speaker 1: in Washington, d c. And elsewhere. The second generation involvement
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Speaker 1: often you hear with wealthy families the first generation, first
11:05
Speaker 1: generation makes it, second generation spins it, third generation loses it. Hello,
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Speaker 1: That is very true. I repeat again, first generation makes it,
11:14
Speaker 1: second generation spins it, third generation loses it. So the
11:19
Speaker 1: first generation feels sorry that they they did words hanging
11:23
Speaker 1: out with their children, giving them time whatever. The don't
11:25
Speaker 1: want their children to struggle. I think struggle has a
11:27
Speaker 1: purpose to it. You cannot grow without legitimate suffering. So
11:30
Speaker 1: it says the Bible, we can have a rainbow without
11:32
Speaker 1: a storm. First, so we rob our kids in the
11:35
Speaker 1: second generation, oftentimes of the ability to understand what it
11:38
Speaker 1: took in the first generation to make it in the
11:39
Speaker 1: first place, which means the third generation ends up losing
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Speaker 1: everything and good intentions are not enough. So the second
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Speaker 1: generation of Indian Americans have been involved with the hotel industry.
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Speaker 1: The success of the first generation immigrants paved the way
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Speaker 1: for their children to continue in the business, often expanding
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Speaker 1: into more upscale properties and diversified business ventures. Many second
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Speaker 1: generation Indian Americans have pursued higher education in business and
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Speaker 1: hospitality management to further professionalize and grow their family businesses.
12:15
Speaker 1: Software upgrades as you go. You've heard me talk about
12:17
Speaker 1: that a lot. You always want to be better. God
12:20
Speaker 1: gave you two ears in one mouth, so you listen
12:22
Speaker 1: twice as much as you talk. I'm just nos ask
12:26
Speaker 1: Quincy Jones. How'd you get so smart? He said, I'm
12:28
Speaker 1: just nosy as hell. I want to know everything about everything. Well,
12:31
Speaker 1: I'm nosy too. That's why my study here where I
12:35
Speaker 1: record is filled with books, and my iPad is filled
12:39
Speaker 1: with books when I'm traveling. That's why I write books
12:42
Speaker 1: and I read books because I'm nosy and knowledge and
12:46
Speaker 1: education is something that no one can take from you.
12:49
Speaker 1: The Indian American community, again different from the Native American
12:52
Speaker 1: Indian community. I'll do a separate podcast on the Native
12:56
Speaker 1: Americans as part of the series. But the Indian American
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Speaker 1: community from India recognized what it took to create power
13:03
Speaker 1: you didn't have any, and they've done a really good
13:05
Speaker 1: job of it, and they've been very focused, keeping their
13:07
Speaker 1: head down and building. This combination of cultural background, community support,
13:14
Speaker 1: and entrepreneurial mindset and strategic use of resources has enabled
13:18
Speaker 1: Indian Americans, particularly those from the Patel community, to dominate
13:23
Speaker 1: a significant segment of the US hotel industry. Isn't that cool?
13:29
Speaker 1: I mean, I just love that now there are not
13:33
Speaker 1: just the Indian Americans who've done well in the hotel sector.
13:39
Speaker 1: And let me also say that there's a reason why
13:42
Speaker 1: African Americans have not done as well as they could
13:46
Speaker 1: in this sector, and that's because Jim Crow laws almost
13:51
Speaker 1: legally restricted them from even accessing a hotel yet loan
13:59
Speaker 1: owning one. And the Indian community started their hotel ownership
14:07
Speaker 1: at a time during the Civil Rights movement period where
14:09
Speaker 1: after Americans had problems even accessing meaning being able to
14:13
Speaker 1: sit at the countertop the counter of a restaurant or
14:17
Speaker 1: even check into one period. But I'm getting ahead of myself.
14:22
Speaker 1: So here's the minority. Groups who've done pretty well are noteworthy,
14:27
Speaker 1: shall I say? In the hotel industry, Asian Americans, particularly
14:32
Speaker 1: Chinese and Filipino Americans. Many Asian Americans have leveraged strong
14:37
Speaker 1: family networks, community support, and traditions of entrepreneurship. The cultural
14:42
Speaker 1: emphasize emphasis on education and hard work has also contributed
14:46
Speaker 1: to their success. Additionally, some Asian American entrepreneurs have focused
14:50
Speaker 1: on niche markets, markets and specialized specialized services catering to
14:55
Speaker 1: specific cultural needs within their own community. And I'm sure
15:01
Speaker 1: speaking Mandarin in the case of Chinese to Mandarin visitors
15:05
Speaker 1: really helped them to own a niche in let's say
15:10
Speaker 1: that you know Chinatown, maybe in small hotels and motels
15:14
Speaker 1: in Chinatown, the Chinatown communities across the country, that that
15:17
Speaker 1: was a way for them to really have a lock
15:19
Speaker 1: on that business sector. African American owners of hotels in
15:24
Speaker 1: the US, I'm gonna come back and do this last.
15:27
Speaker 1: Hispanic American owners often leveraged bilingual skills and cultural connections
15:32
Speaker 1: to cater to a diverse clientele. Many have also capitalized
15:36
Speaker 1: on the growing Hispanic population in the US by offering
15:40
Speaker 1: culturally relevant services and amenities, including again language specialization, speaking Spanish,
15:47
Speaker 1: community support, and entrepreneurship and entrepreneurial initiatives aimed at Hispanic
15:52
Speaker 1: business owners have also played a significant role in their success.
15:55
Speaker 1: Middle Eastern Americans have been successful in hotel ownership. Middle
16:01
Speaker 1: Eastern American entrepreneurs and small business owners have found success
16:05
Speaker 1: through strong community networks and a focus on high quality
16:11
Speaker 1: customer service. I say entrepreneurship in small business, they're not
16:15
Speaker 1: interchangeable terms. By the way. Small business owners are somebody
16:17
Speaker 1: who has an existing business plan. They're using an existing
16:21
Speaker 1: business plan, and an entrepreneur basically creates a new business plan,
16:24
Speaker 1: a new idea. And yes, you can have an entrepreneur
16:28
Speaker 1: that's also a business owner. You can have a business
16:30
Speaker 1: owner this entrepreneurial right. But hotels as a as a
16:34
Speaker 1: general rule, are just businesses. Because you know, you're a
16:37
Speaker 1: business owner, you have a traditional business plan. But if
16:39
Speaker 1: you've rewritten the rules of how you're going to succeed
16:42
Speaker 1: in in that space, then you might be called in
16:45
Speaker 1: that example, and entrepreneurs that you just learn something new.
16:48
Speaker 1: Some of you today differ between an entrepreneur a business owner,
16:51
Speaker 1: which many people use as an interchangeable phrase. Many from
16:56
Speaker 1: the Middle Eastern communities. I think Iran, think a Persian empire,
17:01
Speaker 1: you know Iraq. Think all of the folks that come
17:04
Speaker 1: from the Middle Eastern region. This is the group you know,
17:07
Speaker 1: Saudi Arabia, et cetera, et cetera that I'm talking about, UAE, etc. Etc.
17:15
Speaker 1: Many have also targeted niche markets are offering unique experiences
17:19
Speaker 1: and catering to specific cultural differences. Again, language and food
17:23
Speaker 1: and religion is an area that they could positively exploit for.
17:29
Speaker 1: I don't mean exploit in the bad way. I mean
17:30
Speaker 1: exploiting the positive way for those that they are trying
17:34
Speaker 1: to garner as customers. Now, African Americans could have done
17:38
Speaker 1: that without question and did do that. In fact, the
17:40
Speaker 1: underground you heard about the underground railroad. There was an
17:44
Speaker 1: underground hotel system for African Americans during Jim Crow and segregation.
17:48
Speaker 1: It was called the Green Book. Did you know that
17:52
Speaker 1: it was officially tied with the Negro motorist Green Book,
17:56
Speaker 1: published annually from nineteen thirty six to nineteen sixty six
18:01
Speaker 1: by Victor Hugo Green. Yes, there was a guy named
18:04
Speaker 1: Green and he called it the Green Book. He had
18:06
Speaker 1: a right to name it after himself, exactly right, And
18:10
Speaker 1: I want to give him his credit. It was a
18:11
Speaker 1: black postal worker, hello the Green Book provide and he
18:15
Speaker 1: was a business owner in this example. In fact, I
18:17
Speaker 1: would say he was even entrepreneur in the way in
18:20
Speaker 1: which he went about this. The Green Book provided African
18:23
Speaker 1: American travelers with information on safe places to stay, eat,
18:27
Speaker 1: and obtain services across the United States. It was an
18:30
Speaker 1: essential guide that helped black travelers navigate the dangers and
18:33
Speaker 1: inconveniences of segregation in Jim Crow laws. You know who
18:37
Speaker 1: else used the Green Book prominent entertainers, African American entertainers
18:43
Speaker 1: and sports figures who could not would not be allowed
18:46
Speaker 1: to stay in mainstream establishments. Now, several African Americans have
18:50
Speaker 1: made significant strides and achieved success as hotel owners, and
18:54
Speaker 1: I want to give them some love. Sheila Johnson. Sheila
18:58
Speaker 1: Johnson is a success full entrepreneur, not just a business owner.
19:02
Speaker 1: She remodeled the whole situation with her hotels that I'm
19:05
Speaker 1: aware of even in and around Washington, d C. But
19:09
Speaker 1: me back, I'm getting going too far. She was an entrepreneur,
19:12
Speaker 1: business owner at Philantha Business, co founder of Black Entertainment
19:15
Speaker 1: Television BEET with another gentleman on this list, by the way,
19:19
Speaker 1: she's the CEO and founder of Salamander Hotels and Resorts,
19:25
Speaker 1: which owns and manages luxury properties including the Salamander Resort
19:29
Speaker 1: and Spa in Middleburg, Virginia, and other luxury hotels in
19:33
Speaker 1: the US, including what used to be called the Mandarin
19:35
Speaker 1: Hotel in Washington, d C. And I'm planning on going
19:37
Speaker 1: to visit both of those hotels and giving her some
19:39
Speaker 1: business very soon. Now she's number one on the list,
19:44
Speaker 1: and oddly enough number three on the list. It's her
19:47
Speaker 1: ex husband, Robert Johnson. Robert Johnson, the founder of Beet
19:51
Speaker 1: and a successful I guess he's a co founder with her.
19:55
Speaker 1: A successful businessman with ventures in various industries including hotels,
19:59
Speaker 1: and in fact, he founded our LJ Lodging Trust, a
20:03
Speaker 1: real estate investment trust and a rate they call those
20:06
Speaker 1: focused on the ownership of high quality hotels. Our LJ
20:10
Speaker 1: Lodging Trust Trust owns a diverse portfolio of hotels across
20:14
Speaker 1: the US. Herman J. Russell god Rest is so great businessman.
20:19
Speaker 1: Construction management company and developer and owner. He was an
20:23
Speaker 1: influential businessman and by the way, a big supporter of
20:26
Speaker 1: doctor Martinluther King junior friend of my mentor and bassiar
20:29
Speaker 1: Andrew Young, a really friend of the civil rights movement.
20:32
Speaker 1: He's a philanthropusiness known for contributions to the construction and
20:35
Speaker 1: real estate business here in the atl In Atlanta, Russell
20:39
Speaker 1: founded the HJA Russell and Company, which is children who
20:43
Speaker 1: are friends of mine. Michael Jerome the sister. The family
20:49
Speaker 1: run it now, which developed and owned several hotels, including
20:53
Speaker 1: a hotel they have us right now that's next to
20:56
Speaker 1: the famed restaurant that's in the I forget what I
21:02
Speaker 1: what you call that. I don't want to miss call
21:04
Speaker 1: the area, but I'll just say it's on the middle
21:08
Speaker 1: west side of Atlanta and the historically black hodges In universities.
21:14
Speaker 1: His company played a pivotal role in shipping Atlanta skyline
21:18
Speaker 1: and hospitality landscape. I think he also built the Marriott
21:22
Speaker 1: Marquee in Atlanta. I don't know if he owned it,
21:23
Speaker 1: but I think he built it. And then my brother
21:25
Speaker 1: Don Peoples. I loved his brother, prominent real estate developer
21:29
Speaker 1: and an author. He lives in Florida and New York.
21:33
Speaker 1: He's a founder and CEO of People's Corporation, the real
21:37
Speaker 1: estate development company. You know, the real estate development companies
21:40
Speaker 1: don't necessarily own and operate what they developed. Sometimes you
21:43
Speaker 1: develop it, you spend it off, or you develop it
21:45
Speaker 1: for somebody else. But he has developed and also owned
21:48
Speaker 1: several luxury hotels and mixed use developments, including the Royal
21:53
Speaker 1: Palm Resort in Palm Beach. He's trying to do a
21:56
Speaker 1: major development now, not a hotel, a skyscraper. Will be
22:00
Speaker 1: able to lookout for what Don Peeples is doing. Michael V.
22:03
Speaker 1: Roberts is an entrepreneur and author of interest in various industries,
22:08
Speaker 1: including telecommunications in real estate. Roberts and his brother Stephen
22:12
Speaker 1: Roberts co founder the Roberts Companies, which includes Robert's Hotel Group.
22:17
Speaker 1: The group has owned and managed several hotels, including the
22:20
Speaker 1: Roberts Mayfair Hotel in Saint Louis, Missouri, where my friend
22:24
Speaker 1: is Mayor Jones is the mayor to this day or
22:30
Speaker 1: on this day or like I say, these days trying
22:34
Speaker 1: to help Saint Louis to go to the next level.
22:37
Speaker 1: And she's going to be part of my American Aspiration tour.
22:39
Speaker 1: So watch out, look out for that which is coming
22:43
Speaker 1: coming here here soon. And so why or how shall
22:50
Speaker 1: I say, does his business work? How can they own
22:55
Speaker 1: you say, half of all hotels when you drive by
22:57
Speaker 1: hotels all day, only three or four names that you
23:01
Speaker 1: know of. Well, first of all, just because you drive
23:03
Speaker 1: by and see the name of a hotel Hyatt, Marriott, Starwood,
23:10
Speaker 1: you know, Hilton, et cetera, Ritz, Carlton, whatever, whatever, the
23:14
Speaker 1: four seasons, that does not mean that the company owns
23:18
Speaker 1: that hotel. Did you know that? So let me get
23:22
Speaker 1: into this a little bit. Oftentimes he's in management agreements
23:36
Speaker 1: where you have, like the Four Seasons hotel on Duhenian
23:39
Speaker 1: in Los Angeles, one of my favorites since I was,
23:42
Speaker 1: you know, eighteen nineteen twenty years old to go and visit,
23:47
Speaker 1: and I stayed there to this day sometimes and I
23:51
Speaker 1: don't want to tell you guy, it's too much about
23:52
Speaker 1: where I'm stay, so people hunt me down. But it's
23:55
Speaker 1: one of my favorite hotels. But there's a gentleman who
23:57
Speaker 1: owns it in his wife and they on the top floor.
24:01
Speaker 1: They're the real estate developers and owners who own the hotel.
24:04
Speaker 1: But it's managed by Hello the four Seasons. Four Seasons
24:07
Speaker 1: does not own that hotel, even though their name is
24:10
Speaker 1: plastered on the side of it. So here are the
24:12
Speaker 1: types of hotels. So now you can start to figure
24:15
Speaker 1: trying to figure out who's the owner, and who's the man,
24:18
Speaker 1: and where's the owner, Where's in what instances there's an
24:20
Speaker 1: owner and or a management company involved in the hotels
24:24
Speaker 1: that you love. Types of hotels. Budget hotels, they offer
24:29
Speaker 1: basic accommodation and amenities at a lower price point. That's
24:34
Speaker 1: their niche. You can think about the names of those.
24:37
Speaker 1: A lot of these hotel management companies, the hotel chains
24:40
Speaker 1: have tried to vertically integrate their offerings, so you have
24:45
Speaker 1: a little bit of everything. I'm about to mention. Mid
24:47
Speaker 1: range hotels. They provide a balance of comfort and affordability,
24:51
Speaker 1: often including additional services like restaurants, fitness centers, and meeting rooms.
24:56
Speaker 1: COVID changed all of this, by the way, and a
24:58
Speaker 1: lot of these hotels, with exception of the ones at
25:00
Speaker 1: the top of the food chain. Here, uh you get
25:04
Speaker 1: it's like it's do it yourself now, like room service
25:06
Speaker 1: is a thing of the past. COVID cut out a
25:08
Speaker 1: lot of that out and allowed them to start doing
25:11
Speaker 1: cost cutting, and I think sometimes their own detriment. And
25:14
Speaker 1: I want to start naming names here, but there's one
25:17
Speaker 1: hotel I thinking about it in particular, owns a high
25:20
Speaker 1: end hotel, actually chain that they've really taken a hit
25:25
Speaker 1: on their customer service. I try not to stay there,
25:27
Speaker 1: so if you can guess which chain I'm talking about,
25:29
Speaker 1: they used to be best in class and now they're
25:31
Speaker 1: just another class. And I think that they've won the
25:34
Speaker 1: battle and lost the war by cutting out or even
25:38
Speaker 1: given the option for a high end services or even
25:41
Speaker 1: just room service. You know how irritating it is to
25:44
Speaker 1: get into a city at midnight. Uh, and the hotel
25:48
Speaker 1: is like my second second home. My wife would tell you,
25:51
Speaker 1: I reside Atlanta and live on a plane and then
25:54
Speaker 1: and then temporarily residing in these hotels. And you know,
25:57
Speaker 1: irritating is to get someplace at midnight and room services
26:00
Speaker 1: shut down. There's no or even eleven o'clock or ten o'clock,
26:03
Speaker 1: and there's nothing there, and they have no optionality and
26:05
Speaker 1: they just tell you to go order food online or
26:09
Speaker 1: go find some unhealthy option that some little store or something.
26:14
Speaker 1: So those who do it really well as you know,
26:18
Speaker 1: I told you that the Indian American experience. Are really
26:20
Speaker 1: spend a lot of time thinking through that. The resident
26:24
Speaker 1: or or client experience. I want to say resident, because
26:27
Speaker 1: you only resign there for a day. You think about it,
26:29
Speaker 1: by the way, I think about a hotel, it's like
26:31
Speaker 1: a day's stay. Apartment building. Okay, so it's an apartment
26:34
Speaker 1: building with a logo, with a logo on the outside.
26:37
Speaker 1: That's that's really designed for you to stay by the day.
26:41
Speaker 1: Thought about that deep? Huh. So the revenue is collected
26:47
Speaker 1: every day versus in an apartment building is collected once
26:50
Speaker 1: a month. Mid Range hotels already covered that. Luxury hotels
26:55
Speaker 1: high end. By the way, you don't have to own
26:58
Speaker 1: if you want to get in these businesses. You don't
26:59
Speaker 1: have to own the hoe. You can do what my
27:01
Speaker 1: Ethiopian brothers and sisters have done in places like Washington,
27:04
Speaker 1: d C. They come in and they're they're all the
27:06
Speaker 1: they're the bellman, and they're actually being paid the dormant,
27:08
Speaker 1: the bellman. They're paid to do that. And then they
27:11
Speaker 1: get to know all the clients, they get to know
27:13
Speaker 1: all the you know, the needs, and then they've gone
27:16
Speaker 1: into the taxi business. They've gone into uber and lift
27:21
Speaker 1: business and you and really in many of these hotels,
27:24
Speaker 1: like the one of the hotels I stay in in Washington,
27:27
Speaker 1: d C. No, I'm not gonna tell you the name.
27:30
Speaker 1: I mean literally there is Ethiopians from the door to
27:34
Speaker 1: the curb to the transportation. It's like a t the door,
27:39
Speaker 1: all that traffic of dormant helping with your bags and
27:44
Speaker 1: opening the doors and all that stuff, and the curb
27:48
Speaker 1: same thing, welcoming you, and the transportation going both ways.
27:52
Speaker 1: The taxis, the the lifts, the ubers, the transportation, the
27:55
Speaker 1: VIP transportation. All that's effectively controlled by my Ethiopia brothers
28:00
Speaker 1: and sisters who saw a market and didn't need a
28:02
Speaker 1: lot of capital to do that. And I'm and just
28:05
Speaker 1: like my native native murder, just like my Indian brothers
28:09
Speaker 1: and sisters from Indians from India, but teil community, the
28:13
Speaker 1: Ethiopians can do the same thing. Not just that group,
28:16
Speaker 1: any group, right, But I'm just giving you some examples
28:18
Speaker 1: of folks who are actually doing it. Luxury hotels, high
28:21
Speaker 1: end accommodations with premium services, amenities, and personalized guest experiences.
28:27
Speaker 1: Think about four star and five star hotels, boutique hotels
28:31
Speaker 1: smaller unique hotels that offers personalized services and distinctive decor
28:36
Speaker 1: and themes. These are typically one off hotels. Boutique hotels
28:40
Speaker 1: that and this is something your family can do, something
28:43
Speaker 1: you can do if you're passionate about a certain area, community,
28:45
Speaker 1: medion area. You want to retire to and rewire to.
28:48
Speaker 1: You don't want to just retire, you want to rewire. Yeah,
28:50
Speaker 1: this is John Brian quote us. Make sure you give
28:52
Speaker 1: me credit a few times before you try to steal it.
28:55
Speaker 1: You know, Doctor King used to say to pastors when
28:57
Speaker 1: he'd hear's something he loved. He said, Oh, Joe, reverend
28:59
Speaker 1: past love that idea. I love that quote that. I
29:01
Speaker 1: love that saying that's great. You know, I'm going to
29:03
Speaker 1: use that the first three times, first four times I
29:06
Speaker 1: use it, I'm gonna give you credit the fourth or
29:09
Speaker 1: fifth time. Is mine happy to use anything? I say?
29:15
Speaker 1: Success is a habit, right, Success is intentional, And I
29:18
Speaker 1: want you to be intentional about picking up good habits because,
29:22
Speaker 1: as you've heard me say be repeatedly, if you hang
29:24
Speaker 1: around nine broke people, you'll be the tenth Extended stay.
29:28
Speaker 1: Hotels cater to guests needing accommodations for longer periods and
29:32
Speaker 1: typically offering kitchen facilities in more living space and extended
29:36
Speaker 1: day hotels and budget in mid range hotels often triangulate,
29:41
Speaker 1: they intersperse, they're the same thing. In many cases, those
29:46
Speaker 1: who want budget accommodations and mid range accommodations typically also
29:51
Speaker 1: are the market for extended stay. Although you can have
29:54
Speaker 1: a upscale boutique extended stay hotel, right, you can mix
29:58
Speaker 1: this thing up. The revenue streams. Room revenue the primary
30:01
Speaker 1: revenue of income and generated from renting out rooms to
30:04
Speaker 1: guests on a nightly basis. What did I just tell
30:06
Speaker 1: you that an apartment building is basically thirty days worth
30:10
Speaker 1: of room rates daily room rates from hotels or an
30:13
Speaker 1: apartment building. If you look at a hotel, it could
30:16
Speaker 1: be an apartment building. Yes it could, all right, but
30:18
Speaker 1: it's chosen to in his business model to make its
30:24
Speaker 1: money in a hotel by the day. Food and beverage
30:27
Speaker 1: sales income from on site restaurants, bars, room service, room
30:32
Speaker 1: service and banquet services. Events, event hostings revenue from hosting conferences, weddings,
30:40
Speaker 1: and other events, and meeting rooms and banquet halls. Additional services.
30:45
Speaker 1: Income from services such as laundry, SPA treatments, spa treatments
30:50
Speaker 1: and other kind of I was about to say the gym,
30:54
Speaker 1: but I hope they're not chartering for gym activities. But
30:58
Speaker 1: there are other treats beyond spa treatments that are wellness.
31:03
Speaker 1: They're more wellness oriented, et cetera that these places are
31:06
Speaker 1: getting into. And some of these places are even providing
31:08
Speaker 1: like red light therapy and also other kind of stuff
31:12
Speaker 1: which are in again. Either they got captured there. You're
31:16
Speaker 1: held captive there by your own you know, you're voluntarily
31:21
Speaker 1: held capture captive there, and while you have you within
31:23
Speaker 1: their four walls, they want to figure out how many
31:26
Speaker 1: ways they can separate you from your wallet in a
31:28
Speaker 1: positive way by meeting your needs. Parking and a concierge
31:32
Speaker 1: services are also additional revenue streams, and oftentimes when folks
31:36
Speaker 1: are referring you to an outside service at the hotel there,
31:40
Speaker 1: the hotel is getting a piece of it, or the
31:41
Speaker 1: concierge is getting a commission. All good, no problem with
31:44
Speaker 1: any of that call structure. There's fixed invariable costs expenses
31:48
Speaker 1: that do not change with occupancy levels, such as mortgage
31:53
Speaker 1: or least payments. This is you're not the owner of
31:56
Speaker 1: the hotel. Property, taxes, insurance, and salaries permanent staff. Those
32:01
Speaker 1: costs are permanent that are locked in variable costs costs
32:04
Speaker 1: that vary with occupancy levels, including housekeeping, utilities, guests, amenities,
32:09
Speaker 1: food and beverages. So you can you can moderate those
32:12
Speaker 1: depending on you know what your how busy your hotel is.
32:16
Speaker 1: You can you know, increase them or decrease them. UH.
32:20
Speaker 1: Operations and management front desk operations. They hand the reservations,
32:25
Speaker 1: check ins, checkouts, guest services, housekeeping of course, cleanliness, ordering
32:31
Speaker 1: in the UH, you know, the order of the rooms
32:33
Speaker 1: and public areas, food and beverage. They manage the restaurants,
32:37
Speaker 1: the bars, the room service, catering services. Maintenance ensure that
32:42
Speaker 1: the property and the facilities are in good working order,
32:45
Speaker 1: right including internet, things like that you've called it internet?
32:48
Speaker 1: You ever called it midnight or one in the morning.
32:51
Speaker 1: My in that's not working. UH, can you send a
32:53
Speaker 1: technician up. That's maintenance. Sales and marketing promote the hotel.
32:58
Speaker 1: They manage relations with travel agencies and online booking platforms
33:02
Speaker 1: and develop promotion packages. In other words, they're in charge
33:05
Speaker 1: of getting customers, distribution channels. I'm going to do this
33:08
Speaker 1: real quickly here, because you're smart and you think you've
33:11
Speaker 1: gotten the gist of this so far, like your heads
33:14
Speaker 1: should be nodding. Okay, I get this right. I want
33:16
Speaker 1: to get to a bonus track I'm gonna give you
33:18
Speaker 1: on Airbnb, right, I'm gonna get to that in a minute.
33:22
Speaker 1: So distribution channels, direct bookings, reservations made directly through the
33:25
Speaker 1: hotel's website, and reservations that used to be a big
33:28
Speaker 1: thing now is just a thing. Online travel agencies OTAs,
33:33
Speaker 1: bookings made through third party platforms like Expedia, Bookings, dot Com, Airbnb,
33:38
Speaker 1: which typically charge a commission. Came back to that because
33:41
Speaker 1: that's not their primary business at all. And by the way,
33:46
Speaker 1: you can start an online booking service yourself. You know,
33:49
Speaker 1: this is another business you might even start. You also
33:51
Speaker 1: the all the vendors that support a hotel. You can
33:54
Speaker 1: start be a vendor of one of those businesses and
33:56
Speaker 1: you don't have to sell the whole hotel chain. To
34:00
Speaker 1: sell the owners of that one hotel or the management
34:03
Speaker 1: company of that one hotel on your ability, the general
34:05
Speaker 1: manager of that hotel on your ability to meet a
34:08
Speaker 1: need or provide value. And that's the way you can
34:11
Speaker 1: get started with your business in a box, your business
34:14
Speaker 1: within their box. Their businesses literally just survive on the
34:18
Speaker 1: business or or on the contracts with hotels. That's all
34:22
Speaker 1: they do. Global distribution systems GDS used by travel agents
34:29
Speaker 1: to book rooms for their clients. GDS corporate accounts agreements
34:35
Speaker 1: with companies like my company, Brian Group Companies and the
34:38
Speaker 1: operation of Hope, etc. Which gets a nonprofit rate, by
34:41
Speaker 1: the way, which a whole other thing. So nonprofits should
34:44
Speaker 1: get a if you get a discounted rate at these
34:47
Speaker 1: major hotels, they provide accommodations for their employees at negotiated
34:52
Speaker 1: predetermined rates. Did you know that companies, nonprofits, organizations, governments,
34:57
Speaker 1: there's a government discount group booking reservations for groups such
35:01
Speaker 1: as tour groups and conventions and birthdays and corporate events.
35:05
Speaker 1: Pricing strategies, right, there's dynamic pricing, adjusting room rates based
35:09
Speaker 1: on demand, competition, and market conditions. You notice that the
35:12
Speaker 1: room rates go up and down based on the season.
35:15
Speaker 1: That's what I'm talking about. So it is supplying demand.
35:18
Speaker 1: Don't get angry, don't get upset. The room rates change
35:21
Speaker 1: is supplying demand, fair exchange is no robbery. This is
35:24
Speaker 1: just the way business works. I've already talked about seasonal pricing,
35:30
Speaker 1: package deals, offering bundles services such as rooms and breakfasts
35:34
Speaker 1: or special event packages. I'm going to be talking about
35:37
Speaker 1: reward programs in one of my podcasts, so wait for that.
35:41
Speaker 1: But you want to try to get a package deal, well,
35:43
Speaker 1: this is if you're the consumer side. If you're on
35:44
Speaker 1: the business side, then you want to bundle this with
35:48
Speaker 1: vendors right and with your in house services so that
35:51
Speaker 1: you're providing a lot of value for the customer, but
35:56
Speaker 1: more profitability for yourself. Loyalty program and senterms for repeat guests,
36:01
Speaker 1: such as discounts, free nights, or exclusive benefits. These are
36:05
Speaker 1: the pricing strategies right of the hotel customer experience include,
36:10
Speaker 1: you know, service quality, ensuring high standards for service to
36:13
Speaker 1: meet expected the guests expectations. That's been been talking about
36:17
Speaker 1: that endlessly because it's so important. Guest feedback and personalization,
36:21
Speaker 1: offering tailored experiences based on guest preferences in previous days.
36:26
Speaker 1: I go to this hotel and this is a New
36:29
Speaker 1: York City. I'll tell you which one that is the
36:30
Speaker 1: Park Height in New York City on fifty seventh near
36:35
Speaker 1: Central Park, and I recently showed up there. It was
36:38
Speaker 1: very late and I was wiped out and I walk
36:42
Speaker 1: in and they've got a smock a smock an apron
36:46
Speaker 1: that they made just for me. They embroidered my name
36:50
Speaker 1: on it, John O'Brien, and it was a gift to me,
36:52
Speaker 1: which just reminded me of how much business it must
36:54
Speaker 1: be giving, you know. But they're also just got really
36:57
Speaker 1: nice people. It was a gift for me and it
36:58
Speaker 1: really touched my heart. And they I could have, you know,
37:02
Speaker 1: and they're like, let you know, let us cook a
37:03
Speaker 1: meal together. I was like, oh my god, this is great.
37:05
Speaker 1: And I actually sent a the gender manager note and
37:08
Speaker 1: I mean, I'm sure that you know they're trying to
37:11
Speaker 1: lock me in as a guest that won't go anyplace else.
37:14
Speaker 1: And by the way, in New York City City, it's working.
37:18
Speaker 1: I just go there. UH Technology and Innovation Property Management
37:22
Speaker 1: Systems PMS UH software to manage reservations, billings, and guests.
37:27
Speaker 1: UH Information Revenue Management Systems r MS tools to optimize
37:31
Speaker 1: pricing and inventory. Customer relations management CRM systems totract guest
37:37
Speaker 1: preferences and interactions. This is pretty cool. Way does this work,
37:41
Speaker 1: isn't it? Mobile and online services apps and websites for booking,
37:45
Speaker 1: check in, room service and guest service UH and guest services.
37:51
Speaker 1: So these platforms allow the hotel to work efficiently. Right
37:56
Speaker 1: franchising and ownership models, That's what I was talking about earlier.
37:59
Speaker 1: Right independent hotels owned and operated by individuals or small
38:02
Speaker 1: groups without affiliation the major brands. A lot of the
38:05
Speaker 1: ptail community have done. This is how it's almost all
38:08
Speaker 1: of them started out, and how the black community also
38:12
Speaker 1: started out. Franchise hotels operate under a franchise agreement with
38:16
Speaker 1: a major hotel brand, paying franchise fees for brand recognition, marketing,
38:21
Speaker 1: and operational support. There is a young lady here in Atlanta.
38:27
Speaker 1: I don't know any about her business and not endorsing it.
38:29
Speaker 1: I don't, I don't. I don't know a thing about
38:31
Speaker 1: her business, right, But I do want to give her
38:33
Speaker 1: some acknowledgement because I know she's hustling and trying to
38:35
Speaker 1: make it Davon Reeves and she is, you know, working
38:40
Speaker 1: to acquire one or several hotels. And as I understand it,
38:46
Speaker 1: they're franchise arrangements right. There might be there might be
38:50
Speaker 1: management contracts also, but you know she's associating herself with
38:54
Speaker 1: recognized brands and she's trying to come up from nothing.
38:57
Speaker 1: And I commend her on her hustle and wish your well.
39:01
Speaker 1: And there are others out there that you guys. Send
39:03
Speaker 1: me a note, some other African Americans and Latinos and
39:06
Speaker 1: minorities and women and trying to make it, even if
39:10
Speaker 1: you're poor white, you're trying to make it. Let me
39:13
Speaker 1: know what's going on with you, so I can promote
39:15
Speaker 1: and encourage you and go to Operation Hope for free
39:18
Speaker 1: services through our small business programs and our one million
39:21
Speaker 1: Black business program that helps in our financial coaching programs
39:25
Speaker 1: that helps you come up from nothing right. And it's
39:27
Speaker 1: all scholarships so it doesn't cost you anything because of
39:29
Speaker 1: our partnerships with our members at Operation Help and our partners.
39:33
Speaker 1: So you have independent hotels, franchise hotels, management contracts. This
39:37
Speaker 1: is the part I was telling you. You drive by these places,
39:40
Speaker 1: you assume that they own, that that's the owner because
39:43
Speaker 1: their name is on the wall. Don't make that assumption.
39:45
Speaker 1: Whenever you assume, you make it out of you and me,
39:48
Speaker 1: you figure out what I'm trying to say. Property owners
39:51
Speaker 1: hire hotel management companies to operate the hotels on their behalf,
39:56
Speaker 1: sharing revenue and profits. That deep. So an investor like
40:00
Speaker 1: me owns a building and they give a measure contract
40:03
Speaker 1: to a That's why you can see the same property
40:06
Speaker 1: that changes hands, you know, month to month, not month
40:10
Speaker 1: to month, but from one month to the other, because
40:12
Speaker 1: just in the name outside change. Because it's just as simple.
40:14
Speaker 1: Another property managerent company took over hotel chains. Large companies
40:28
Speaker 1: that own management are franchised multiple hotels under various brands.
40:35
Speaker 1: So the hotel business you know, has been around for centuries, yes, centuries,
40:42
Speaker 1: it goes back forever. And so if you're looking for
40:46
Speaker 1: a business that will be around for a long time
40:50
Speaker 1: and will it's pretty much AI bulletproof because you can't
40:56
Speaker 1: give an artificial intelligence experience to actually physically staying somewhere,
41:00
Speaker 1: even though AI will refine how these places do business.
41:04
Speaker 1: And the next model I wanna give you is using AI.
41:06
Speaker 1: I know the founder, this is Airbnb. Brian Cheske is
41:11
Speaker 1: the founder. Good guy. I just saw him recently and
41:14
Speaker 1: he in full disclosure. They are a member of Operation
41:18
Speaker 1: hope the as five project and a new partner in
41:21
Speaker 1: our work. I believe it's one million black business initiative
41:26
Speaker 1: and I want to and so they're hopefully good news
41:28
Speaker 1: is coming soon what we're doing with them. I told
41:31
Speaker 1: him there's a market that that you know, people of color,
41:34
Speaker 1: underserved communities, are untapped, are under under tapped as a
41:39
Speaker 1: market potential for Airbnb. So here's how air andbnb works.
41:42
Speaker 1: So this is separate from the traditional hotel industry. Folks,
41:45
Speaker 1: this is is really smart and you should read Brian's
41:48
Speaker 1: story of how he and his co founder. His co
41:50
Speaker 1: founder is also a cool guy doing philanthropic work and
41:53
Speaker 1: helped bring a lot of immigrants in from war torn
41:56
Speaker 1: areas in the in the world a few years ago
41:59
Speaker 1: during the past deemic. Actually I think it was. So.
42:02
Speaker 1: Airbnb is a peer to peer platform that connects individuals
42:05
Speaker 1: looking to rent out their proper hosts with those seeking
42:09
Speaker 1: the short term accommodations guests. So here's a breakdown in
42:13
Speaker 1: summary of how this platform works. It provides an online
42:18
Speaker 1: marketplace where hosts can list their properties and guests can
42:21
Speaker 1: search for in book properties. So hotels are big buildings
42:25
Speaker 1: that look like apartment buildings with a hotel brand on
42:28
Speaker 1: the Airbnb typically is a home at least you start
42:31
Speaker 1: out as a home, but whole on a minute, because
42:33
Speaker 1: even that's changing or expanding, shall I say. The platform
42:38
Speaker 1: facilitates the entire booking process, including communication, payment, and even reviews.
42:45
Speaker 1: Hosts you list your property. Hosts create listings for their properties,
42:50
Speaker 1: which can range from single rooms to an entire house
42:55
Speaker 1: or unique stays like tree houses and boats. Yes, treehouses
43:01
Speaker 1: and boats. And by the way, the founder, Brian goes
43:03
Speaker 1: around the country and stays in a lot of different
43:05
Speaker 1: places for a while. I think he need have. He
43:07
Speaker 1: didn't even have a home. I think he told me
43:09
Speaker 1: because he was just one to full experience all the
43:12
Speaker 1: airbbs in his networks. He's living his he's living his
43:16
Speaker 1: dream like literally, and I respect that. So these different
43:20
Speaker 1: properties provide details and photo availability and pricing for what
43:25
Speaker 1: they're offering you. Hosts set their own prices for their properties.
43:29
Speaker 1: Did you know that there's a guide that Airbnb offers
43:32
Speaker 1: as a guiding tool, But is America do what you
43:35
Speaker 1: like even though they're a global company. By the way,
43:39
Speaker 1: but you got to be competitively priced, otherwise nobody's going
43:41
Speaker 1: to stay in your spot hosting services. Hosts are responsible
43:44
Speaker 1: for maintaining their properties, providing amenities, and ensuring a good
43:48
Speaker 1: guest experience. Guests guest search for accommodations based on location, date, price,
43:55
Speaker 1: dates you know that you want to travel, price range,
43:58
Speaker 1: and other preferences. They can view listings, read reviews, et cetera,
44:03
Speaker 1: et cetera. Guests pay through ABND, Airbnb's platform, and Airbnb
44:09
Speaker 1: holds a payment until twenty four hours after checkout to
44:12
Speaker 1: ensure the property meets guests expectations. Now, the revenue model
44:17
Speaker 1: guest service fees, it's about fourteen percent, so if you're staying,
44:22
Speaker 1: so most of the money comes from folks staying at airbnbs,
44:25
Speaker 1: not the people own the properties, which I think is
44:27
Speaker 1: a pretty cool. I think that's a very fair and
44:30
Speaker 1: smart approach. So about fourteen percent of what you pay
44:36
Speaker 1: in Airbnb is going to cover Airbnb, and it covers
44:41
Speaker 1: customer support and other services, bookings, et cetera. The host
44:44
Speaker 1: is charge of service fee tied to their experience with Airbnb,
44:49
Speaker 1: of about three percent of the booking subtotal to cover
44:53
Speaker 1: the cost of processing payments. Now, Oddly enough, and it
44:56
Speaker 1: may not be what Brian had intended or may have
44:58
Speaker 1: been the reason he did this, But I just find
45:01
Speaker 1: that interesting that that's about the fee that a broker
45:04
Speaker 1: with charge on one side of a transaction to sell
45:08
Speaker 1: or buy or help you buy a home, you know,
45:10
Speaker 1: the real estate brokerage commissions. Yeah, six percent. Half of
45:14
Speaker 1: that three percent, But that's just my own riffing on
45:19
Speaker 1: the topic. But it's three percent, which is, you know,
45:21
Speaker 1: pretty reasonable. And that combined that seventeen percent is how
45:27
Speaker 1: Airbnb makes their money. And I'm gonna come back to that.
45:29
Speaker 1: The minute is tied to revenues, so airbb also offers
45:34
Speaker 1: guests the option to book local experiences such as tours, classes,
45:39
Speaker 1: activities hosted by local experts. Airbnb takes a percentage of
45:43
Speaker 1: the fee for these experiences. They disclose it no problem
45:48
Speaker 1: again for exchange is no robbery. Airbnb plus did you
45:51
Speaker 1: know about this? The program features high quality listings that
45:55
Speaker 1: have been verified for quality and comfort. Hosts pay an
45:58
Speaker 1: additional fee for this this verification and the enhanced visibility
46:02
Speaker 1: that comes with it. It's like getting in an Uber
46:04
Speaker 1: black car or something. I guess right. Airbnb lucks Hello
46:10
Speaker 1: a luxury tier offering high end properties and premier services,
46:15
Speaker 1: and these a fee structure for these listings are typically higher,
46:18
Speaker 1: and they're competing with these companies, many of which I
46:21
Speaker 1: know about. Whereof where wealthy people you want to rent
46:26
Speaker 1: a mansion or whatever it is you want to rent,
46:28
Speaker 1: or a resort property, they're now competing with these companies.
46:32
Speaker 1: And some of these companies actually you've become part of
46:35
Speaker 1: an ownership group that owns well, you're part of an
46:39
Speaker 1: ownership group of the company, and that gives you access
46:41
Speaker 1: to luxury properties all around the world free x period
46:46
Speaker 1: of time times of the year. Think about like a
46:49
Speaker 1: time share for rich people. It's pretty cool platforming because
46:53
Speaker 1: the real estate actually, unlike a timeshare, goes up in
46:55
Speaker 1: value typically and you can typically sell your membership at
46:58
Speaker 1: a profit. So that's a different business model for another day,
47:02
Speaker 1: but that's who Airbnb lucks is sort of competing with
47:06
Speaker 1: insurance and guarantees host guarantees. Airbnb provides a host guarantee
47:10
Speaker 1: program that offers protection up to a million dollars Did
47:13
Speaker 1: you know that for damages to host properties Host Protection Insurance.
47:16
Speaker 1: This program provides liability insurance for hosts an event of
47:20
Speaker 1: guess injury or damage their belongings. We all know important
47:24
Speaker 1: reviews and ratings are regulation and compliance. Airbnb must complying
47:30
Speaker 1: with local laws. This has become a thing in certain
47:33
Speaker 1: parts of the country in the world where local leaders
47:35
Speaker 1: push back on having Airbnb in their communities. You know,
47:39
Speaker 1: in Maui work place I love, there's like an unofficial
47:42
Speaker 1: Airbnb where folks buy a property and they rent out
47:46
Speaker 1: a guesthouse in the back, and the guest house is
47:48
Speaker 1: actually how you're able to stay in the front house.
47:50
Speaker 1: Like that's the way people can afford to live in
47:52
Speaker 1: Maoor because it's very expensive, and there's been a lot
47:55
Speaker 1: of pushback from the local government to basically ban that activity,
47:58
Speaker 1: which i put a lot of people out of busines
48:00
Speaker 1: and lower the value of the property. Okay, I'm getting
48:02
Speaker 1: off topic. You know, I love real estate and technology
48:06
Speaker 1: and data. We're going back to Airbnb now. Airbnb uses
48:09
Speaker 1: data analytics to provide user to improve sorry user experiences,
48:14
Speaker 1: to optimize pricing, and provide personalized recommendations. They also I'll
48:19
Speaker 1: be talking to them about this because I'm involved now
48:21
Speaker 1: in this AI Ethics Council. They also invest in AI,
48:24
Speaker 1: artificial intelligence and machine learning to enhance search functionality, fraud protection.
48:32
Speaker 1: We all want that and enhance customer service. Now revenue,
48:36
Speaker 1: hold on your boots. In twenty twenty three, Airbnb generated
48:40
Speaker 1: about just under ten billion dollars in revenue. That was
48:45
Speaker 1: just under a twenty percent increase from the previous year.
48:48
Speaker 1: They saw four hundred and forty eight million bookings and
48:52
Speaker 1: hosted around seven point seven million listings. Globally, airbnb gross
48:56
Speaker 1: bookings booking value was about seventy three billion dollars in change,
49:01
Speaker 1: reflecting a significant market presence and growth of the platform.
49:06
Speaker 1: Kudos to you, Brian Jesskey for what you've built. Proud
49:09
Speaker 1: of you, and if you look at the seventy three
49:12
Speaker 1: million dollar number and you back out of that the
49:15
Speaker 1: nine point nine ten billion dollar number, now you can
49:18
Speaker 1: see those fees I was talking about earlier. Okay, So
49:22
Speaker 1: I've explained to you the hotel industry. I've explained to
49:27
Speaker 1: you the different types of hotels. I've explained to you
49:33
Speaker 1: the difference between a motel and a hotel, and different
49:37
Speaker 1: kinds of hotels in the hotel categories. I've explained to
49:43
Speaker 1: you the revenue model and how they make their money.
49:49
Speaker 1: I've explained to you how this minority group, Indians from India,
49:55
Speaker 1: the Patel community. How they've done so well and in
50:00
Speaker 1: less than one hundred years, really seventy years ish to
50:05
Speaker 1: dominate minority ownership presence in the hotel and motel space,
50:11
Speaker 1: representing fully fifty percent of all hotels and motels in
50:18
Speaker 1: the country. And I've explained to you and broken down
50:23
Speaker 1: the different minority groups that have done well in this space,
50:27
Speaker 1: and just to go one step deeper, hotels versus motels, right,
50:33
Speaker 1: we want to be like fully briefed in this area
50:35
Speaker 1: because maybe this is an area that you want to
50:37
Speaker 1: retire to and you want to know everything about it
50:41
Speaker 1: because you're going to start your own. Motels are commonly
50:45
Speaker 1: located along highways and on outskirts of towns, usually one
50:50
Speaker 1: or two story buildings with exterior interests to rooms. They
50:55
Speaker 1: have basic facilities, often limited to parking with sometimes where
51:00
Speaker 1: they have often limited parking, like they don't have parking structures, right,
51:03
Speaker 1: Typically motels don't and they're not looking like the apartment
51:07
Speaker 1: buildings I mentioned earlier about hotels. These are typically one
51:09
Speaker 1: or two story buildings. Right, you can get your mind
51:12
Speaker 1: around what I'm talking about now. A motel the parking
51:16
Speaker 1: is typically out outside. Typically you actually drive up in
51:19
Speaker 1: front of some of the r the rooms where you
51:21
Speaker 1: would stay at Sometimes you have a small swimming pool
51:24
Speaker 1: or a breakfast area. More limited services with a focus
51:28
Speaker 1: on convenience and affordabilities so you get your own stuff
51:31
Speaker 1: is what I mean by a motel. Hotels are typically
51:36
Speaker 1: found in city centers, business districts, and tourist areas, larger
51:40
Speaker 1: buildings with multiple floors and extensive facilities. These amenities include restaurants, bars, gyms,
51:49
Speaker 1: swimming pools, conference rooms, concierge. Starting to get It generally
51:53
Speaker 1: offer higher levels of service, including room service. Listen hotel
51:58
Speaker 1: owners and managing companies watching and listening to this podcast
52:02
Speaker 1: get you get your stuff right? Otherwise folks are eating
52:04
Speaker 1: your lunch. No pun intended. Uh, finding other ways good
52:08
Speaker 1: to compete with you. People like me want good service
52:11
Speaker 1: when we're away from home. We need to feel like
52:13
Speaker 1: we're at home and we're already tired and worn out,
52:15
Speaker 1: and we get to the place we don't have to
52:17
Speaker 1: go having to figure out, you know, how not to
52:19
Speaker 1: get botulism at two in the morning and ordering from
52:22
Speaker 1: some app to you know, get some food delivered to us.
52:25
Speaker 1: Even though the uber eats apps and all those apps
52:27
Speaker 1: are actually a pretty cool option. You know, you're already tired,
52:30
Speaker 1: you worn out. You don't want to be wasting your
52:32
Speaker 1: time having to order food. You got to go back,
52:34
Speaker 1: get dress, go back downstairs and get to meet the person.
52:37
Speaker 1: And do I sound irritated by the way, By the way, Okay,
52:40
Speaker 1: quick funny story before I let you go. By the way,
52:42
Speaker 1: if you enjoyed this episode or you have, let me
52:45
Speaker 1: know on one of my social media accounts what you
52:47
Speaker 1: liked about it, and also what else you want me
52:49
Speaker 1: to cover? What other topics, industries, businesses you want me
52:53
Speaker 1: to unpack for you and things I'm not even thinking about. Okay,
52:56
Speaker 1: So I'm in I don't know what city I was at.
52:59
Speaker 1: I was traveling with Sir James Buchanan, who works as
53:02
Speaker 1: an assistant with me, even though it seems like I
53:04
Speaker 1: work for him sometimes. And we got in late. It
53:08
Speaker 1: was in South Carolina, I believe it got in late
53:11
Speaker 1: to this hotel and room service was closed. We had
53:14
Speaker 1: to order I had to order food and the delivery
53:18
Speaker 1: was late, and Sir James said he would meet them downstairs. Well,
53:21
Speaker 1: Sir James went to sleep so they call, and you know,
53:26
Speaker 1: I go down to meet the folks, and I woke
53:29
Speaker 1: Sir James up so we had to bear witness and
53:32
Speaker 1: he went down with me. So we're down in this
53:35
Speaker 1: midnight and the driver, you know, is he got his
53:39
Speaker 1: food and they missed the drink like they brought the food.
53:43
Speaker 1: And they always bringing these little you know, these little
53:45
Speaker 1: plastic bags and you hope that don't burst on you, right,
53:49
Speaker 1: and it's got the plastic utensils and all this kind
53:52
Speaker 1: of stuff. Anyway, I'm a little bougie. I've earned the
53:57
Speaker 1: writers all this time. It's got my three million mile
54:01
Speaker 1: plaque from Delta Airlines alone. I'm another two million miles
54:04
Speaker 1: on United Airlines. By the way, we're the coach financial
54:06
Speaker 1: coach for all Delta Airline employees. So I get my
54:10
Speaker 1: bag and he doesn't have his drink. Always says, oh,
54:13
Speaker 1: the provider forgot the drink. He wasn't the saying I'm
54:16
Speaker 1: gonna go back and get it for you. I wouldn't
54:17
Speaker 1: do that, but he didn't even offer. Well, I had
54:20
Speaker 1: already given the guy a very generous tip in the app.
54:23
Speaker 1: My wife has taught me how to do that well
54:27
Speaker 1: on these apps, and I also want I know these
54:31
Speaker 1: people they you know this how they make the money,
54:32
Speaker 1: the tips. So I'd already given him a tip like
54:36
Speaker 1: twenty five thirty percent. So he's just sort of standing there.
54:40
Speaker 1: The guy reaches out his hands to Sir James. I
54:44
Speaker 1: don't know whether Sir James reached out his hands first
54:46
Speaker 1: or the guy reached out his hand, but anyway, they
54:47
Speaker 1: end up shaking hands, and Sir James said, nice to
54:53
Speaker 1: meet you, have a nice night. The guy looks at
54:55
Speaker 1: Sir James sort of crazy and sort of walks away.
54:58
Speaker 1: I'm like, Sir James, he reached it reaches out his
55:00
Speaker 1: hand because he wanted an extra tip, and he thought
55:02
Speaker 1: that Sir James has gone in his pocket, that's what
55:04
Speaker 1: he was or he put his hand out of his pocket,
55:06
Speaker 1: and the guy reached his hand out to shake his hand.
55:08
Speaker 1: And the guy just assumed. You never want to assume
55:11
Speaker 1: rested earlier, you make a you know what out of
55:13
Speaker 1: you and me. He just assume Sir James was giving
55:17
Speaker 1: him another tip, a twenty bucks or whatever cash, and
55:20
Speaker 1: you know, Sir James like, have a nice nice, nice
55:23
Speaker 1: to meet you. And I mean it was Sir James
55:25
Speaker 1: is the King of dead humor like dry humor. So
55:29
Speaker 1: it was really quite hilarious. And he's like, look the
55:32
Speaker 1: guy you know and everything else. The guy didn't even
55:35
Speaker 1: bother him check your order before he got it. What
55:37
Speaker 1: do you want from me? So? Uh, look, you got
55:41
Speaker 1: to keep take take a life seriously, never took yourself
55:43
Speaker 1: too seriously. Like you got to find a way to
55:45
Speaker 1: laugh through all this stuff. But this is an example
55:48
Speaker 1: of where I will always remember that this place did
55:51
Speaker 1: not give good customer service. They could have provided an
55:53
Speaker 1: overnight basic menu for those who are traveling who don't
55:58
Speaker 1: want to go external for their food, just want to
56:00
Speaker 1: They want to get there relaxed, get undressed and chill.
56:03
Speaker 1: They don't want to leave their room again, and they'll
56:05
Speaker 1: pay a premium. I'll pay premium for that, by the way,
56:08
Speaker 1: so there's no expense for the hotel in question. And
56:11
Speaker 1: I also remember the hotel, the Parkhayat in New York
56:16
Speaker 1: City that went out of their way after so much
56:19
Speaker 1: business I've given them that, we've given them that. They
56:20
Speaker 1: even had a cooking apron with my name on it.
56:24
Speaker 1: And I don't cook, but I may learn now because
56:28
Speaker 1: and I will remember that forever little things matter a lot.
56:33
Speaker 1: This is John O'Brien. This is Money and Wealth on
56:35
Speaker 1: the iHeart Network Black Effect podcast series. It's my weekly
56:41
Speaker 1: pulvid of financed and I'm here to make the streets
56:46
Speaker 1: meet the sweets. Hope you've enjoyed this, go change your
56:50
Speaker 1: life and get the book Financial Literacy for All. Money
57:07
Speaker 1: and Wealth with John O'Brien is a production of the
57:09
Speaker 1: Black Effect Podcast Network. For more podcasts from the Black
57:13
Speaker 1: Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts, or
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Speaker 1: wherever you listen to your favorite shows.