The Hotel Investing Guide to Operational Excellence | Mike & Nate E4

In this episode of the Hotel Investor Playbook, Michael and Nathan dive into the essential topic of hospitality operations, exploring the less-discussed but crucial aspects that drive a thriving hotel business. The conversation reveals how to navigate common operational pitfalls, emphasizing the importance of delivering exceptional guest experiences and building efficient systems. The episode covers a range of topics including the integral role of reviews, leveraging technology, implementing the EOS system, and setting up detailed processes to ensure smooth and scalable operations. Listeners are provided actionable insights and a step-by-step guide on auditing reviews, managing guest experiences, and creating 'wow' moments that lead to financial success and personal fulfillment in the hospitality industry.

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Transcript

Nathan St Cyr 0:00

How can you go and take new experiences? How can we focus on taking a guest that comes and stays with us and providing them with an experience that they haven't had before in the mundaneness of their life, of all the things that they have to do? How can we go and focus on providing an experience that's going to be mind-blowing? That they're like, oh my gosh, this is not my everyday life. This experience is, this is creating awe and wow. And oh my goodness, it's putting color into my life that I've been missing.

Michael Russell 0:33

Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate.

Nathan St Cyr 0:43

Get in the game. Yo, what's up? What's up? I'm pumped about this. I just I want to start by just can we just shoot this straight for a minute? Let's shoot it straight, man. All right. We talk about this all the time behind the scenes. You know, obviously there's there's some momentum here in this opportunity that exists. With people are starting to see the opportunity of holy crap, the hotel, the hospitality asset space, whether it's experiential lodging, whether it's boutique hotels, hostels, whatever it is, that there's momentum building here. People are starting to see this is a way that I can really lever financial freedom and create long-term wealth. And there's a there there's a there's a movement that's starting. And so we're in these conversations consistently. We're in masterminds, we're at conferences, but there's behind the scenes, we're always like, okay, this is great that we're you know connected with all these people that are teaching, but nobody ever talks about operations. Like all of the focus, it's constantly on the it's like it's focusing on, oh, this is what you need to do to acquire, here's what you need to do to partner, here's what you need to do to go and and and and raise capital, and here's what you need to do to, there's all of the what you need to do, but then I don't get it. Like, well, what the hell is somebody someone supposed to do once they actually execute this and now they own it? There's very I don't hear that conversation occurring very often.

Michael Russell 2:51

Yeah, it's it's all the drama, right? It's like the drama of wow, you're gonna buy, you're gonna get started in this, you're gonna buy a hotel. This is so exciting. Here's how you find it, here's how you raise money, and then here's how you sell it for all this money and walk off, you know, into the sunset and live happily ever after. But there's this big gap on like, wait, well, wait a second. What happens between the time when I actually own this bad boy and sell this bad boy? Like, how does that work?

Nathan St Cyr 3:16

Yeah, well, and I mean, the reality is you can go and have a plan and have a thesis of you know what what you're presenting to investors or or what have you, but at the end of the day, what is it that actually makes the leverage or the lever pulling the lever, what actually makes it profitable? And at and what that is, this is a this is the passionate asset class. This is hospitality. And so executing hospitality is this critical component, but it's like the least talked about part in teaching new people, you know, what what this process really is. So although it's not, and I think part of it is it's just the reality, it's not, it's not the sexiest topic to talk about. I also feel like it's not an area where a lot of there's there's not a lot of people have created significant success in the actual hospitality part of people that are moving over into this space. They're at the beginning too. So because they're a little bit more in the beginning, yeah, we can acquire these, but their learning as they go as well is you know similar to what we have. But I do feel like, especially with you, I feel like we have something to offer listeners. And when I really look at strengths in development and processes and creation, you really have been just incredibly pivotal to obviously our success. I want to I want to fast forward from you know how you get there to you know where we are. We're getting ready to scale, right? We own multiple hospitality asset properties, and now we're we're getting ready, ready to really grow. You have the team right now focused on taking all of these operational processes and integrating uh notion, which I'm not gonna wouldn't do justice in explaining, but ultimately all of our systems and processes for operations will be easily accessible for every teammate across every hospitality asset that we own. So all of the systems and processes you've built in operations are gonna be boom, they're just there, they're accessible. But to go from where we started, and I think that this is you know a critical component that look in two and a half years, we were awarded the best small hostel in North America. We did that if you rewind to our start, zero hostel experience. We didn't none. We didn't know we were we were scared, we didn't know, we felt like okay, we knew that we were on to something. We did this during COVID, right? We're gonna go and move forward with this vision because we saw an opportunity to provide a hospitality experience to go and and elevate and execute at a high level. But man, we knew we really knew absolutely nothing about it. And in in that process of going from knowing absolutely zero to being awarded as the best small hostel in North America, there was a massive amount of implementation, implementation that occurred. And I want to I want to dig into that because I think that it's gonna be really, really helpful and insightful for and critical for listeners to understand how that process occurred. So I want to just dig in a little bit if that's okay, and and start at the beginning of a little bit of uh your vision for how we went from knowing absolutely nothing and just having the courage to go and make the move and go all in. How did we how did you start to shape in your mind how we were gonna go and operate?

Michael Russell 7:30

Yeah, absolutely. So, you know, I'm I'm a little bit of a goof, I'm a I'm kind of silly and stuff, but this is a serious subject right here. This part is so important. And to your point, it's it's commonly overlooked, it's not really talked about because operations is not sexy. Operations is just the blocking and tackling of owning a business. And it's it's really important though that you you nail this. And and this, look, whether you plan on self-managing your hotel or hospitality asset, or you're gonna outsource this to a management team, you gotta understand. Well, how the heck do you like how do you run a business effectively? How do you run a hospitality business effectively, to be specific? And so this is my love language. I love this. For me, I relate this almost like, you know, I was when I walk through a big city and and I look at these buildings, you know, or even if I walk through a neighborhood and I see a beautiful home, I really like how, you know, I like people have have built something that's tangible, right? When you look at a beautifully designed, whether it's a historic building or even a modern one, you look and you go, wow, you're in awe of the design of that building and you can see it, you can physically feel it. It is a tangible product of someone's effort, intentional effort to build something amazing. And I bring this up because you know, in in previous work I did where it was just, you know, through the computer and and whatnot, there's or even in sales, it's it's hard to have something conceptual that you can you can feel, you can see, it's it's it's tangible. But when building this business, the operations have an absolute impact that you know, both from a financial perspective, but also from a personal fulfillment. Because when you're building operations, what this is really geared towards is operations is providing an incredible experience for your guest. It's not just, hey, let's you know figure out how to do laundry. It's like, hey, you know, we need laundry to be run effectively because you know, people are depending on this. These are the critical things that people need. I mean, laundry is probably a terrible example, but my point is whatever in operations we're gonna go through today, it's to me, I'm passion-driven by the experience. And so when we started looking at like, oh my gosh, okay, so we don't have any experience with running a hospitality business. Where do we start? What do we do? It didn't just like one day we just knew how to do everything. We had to learn by doing. We went through this. And so I feel like this episode, what we're gonna provide is we're gonna shortcut some of the obstacles that people are gonna have to learn. Like, again, whether that's through self-managing or outsourcing this, so that you can really drill down on like what are the key pillars of the business from an operational perspective that lead to guest satisfaction, which is ultimately gonna drive revenue. And then, like I said, something you can be proud of, that personal fulfillment of your brand. So, although it's not a city skyscraper that you're walking by, when you walk into your location and you see that it is thriving, that people are enjoying it, when you get positive reviews, that is something that that that it touches your heart a bit. And so for me, it's emotionally driven. And I want to actually use that word emotion here and I want to send it back to you, Nathan, because one thing that we recognize very early on is to deliver excellence, we need to understand what is driving people. People are human, people are emotional beings. And very early on, you identified what's going to be successful is understanding what those human emotional needs are. So I'll pass it back to you.

Nathan St Cyr 10:59

Yeah. Okay. So here's my takeaway from what you kind of just went through that at the end of the day, that what we're trying to accomplish in hospitality is creating a feeling. Right? Like that's the essence of all of this stuff that we're gonna go through. The end result is we were very clear, or you have to be very clear on what end feeling are you trying to create? What is it that you want somebody to feel like after they've experienced your product, in our case, this hospitality experience? And so from an operational standpoint, you've really become an expert into all right, we need to dive into every one of the facets that's gonna impact at the end of the day, a very simple thing, which may even be subconscious for people, this feeling that they walk away with and then turn back and go, wow, that was something. And I think when we came into this, look, you can go on our website and and we actually we actually break this down, but to create the highest level of feeling within someone, human beings were all wired the same way. Now, we may have different dominant things that that motivate us or that really touch us in a certain way, but every human being, their maps are made up of having fulfillment of six human emotional needs. And so I'll just run through them really quickly. And and we really started, this was our starting point. We knew people. We knew that people, if you fulfill these needs, number one, certainty, variety, connection, significance, contribution, and growth, everything fits into one of those, everything that that motivates us fits into one of those six human emotional needs. And and here's the magic part. Because they're they're they're human emotional needs, if that need is fulfilled, if it's executed and somebody connects with and that's delivered to them, they experience fulfillment. Fulfillment creates the feeling of happiness, joy, peace. So what you're delivering and making these a focus. But if we just give a couple examples, certainty. We recognized in the beginning, we didn't know how to run a hostel, right? But what we recognized is people, if we wanted to fulfill certainty, we better make sure that we create a safe, secure environment. That at every process through the guest journey that we're focusing on, does this guest feel like they can depend on us and our hospitality company? Can they depend on us? Do they feel safe with us? How can we go and implement all of these things and all of these processes to elicit the feeling of, yes, man, I felt safe and secure and clean, everything was taken care of. I can depend and I trust this company. You can look at the opposite side of that and say that people need variety fulfilled. So we went and said, wow, okay, variety. How can you get the highest level of? How can you go and take new experiences? How can we focus on taking a guest that comes and stays with us and providing them with an experience that they haven't had before in the mundane of their life, of all the things that they have to do? How can we go and focus on providing an experience that's going to be mind-blowing? That they're like, oh my gosh, this is not my everyday life. This experience is this, this is creating awe and wow, and oh my goodness, it's putting color into my life that I've been missing, right? And so, how can we go and put processes in place? And and ultimately, I won't go through each one of these, but we really dug into those human emotional needs. And I think that there was a timing, like in this process, as of when we created our mission and vision, these six human emotional needs were in them. But as a constant learner, you're constantly reading books and then you'll sometimes you'll share them. And I think that one of the things that impacted our journey along the way that had just a massive impact was number one, you reading the book of delivering happiness.

Michael Russell 15:48

Yeah.

Nathan St Cyr 15:50

Dude, you read that book, and then you're like, Nate dog, bro. You've got you've look, you've got to read this book, and I'm gonna make it mandatory. We were just opening, we just had our our our core staff hired. We were just getting into it, we're just starting the learning process, and you're like, every one of our leaders, they all need to staff needs to read this book. And so I I want to turn it over because that really helped simplify ultimately how you go and fulfill these human emotional needs. But can you just maybe walk us through how you were impacted by delivering happiness and then how that created helped you create operational excellence?

Michael Russell 16:32

Yeah, absolutely. So you're right. When we were starting out, we were walking through these human emotional needs, and that coincided with me reading this book, Delivering Happiness, which is the story of Zappos from the founder's perspective, Tony Shea. And there's there are so many takeaways that you know, I I could spend a whole podcast episode on it. It's must, it is required reading for any person in management for any of our you know locations. And like I said, there's so many takeaways, but one of the main ones I think that just drove from an operational perspective, like when we're making decisions on how we're gonna perform things operationally, whether that's communication or you know, our our our staff training, in the book, he talks about creating wow moments when people are surprised. So there's there's a level of expectation that if you pay for a good or service, you expect a certain standard. But a wow moment is created when you're not expecting that, when it's above and beyond. So I'll give you a quick example and then I'll roll through all the different functions, but communication. So one of the things that we rolled out early on was we call them aloha calls. And when we have guests arriving, three days before their arrival, our staff gives them a friendly call just to say, hey, we're here for you. Uh, we have 24-hour reception. And when you arrive, you know, someone will be here to greet you. And and there's a few other things that we just go through. But the point is we provide them this aloha or this welcome call, and they're not expecting that. Um, sometimes people are a little concerned, like if they miss our call and it goes to voicemail, they they might be concerned, like, well, is something wrong? Because that just doesn't happen, especially in in a in a hostel, right? You people associate hostels with being kind of low service. But in, you know, from our mindset, whether whatever type of hospitality asset you're gonna run, whether it's a hostel, hotel, any other kind of experiential lodging, these wow moments, it could be just providing a little gift basket inside your room with their name on it that recognizes them as being special and a little bit of gratitude. But the book is all about what created Zappo's success was they took a business that was fundamentally not that unique or special. People are buying shoes, right? But it was their customer service that they poured into and the culture that they created that ultimately created this brand where people were thrilled to do business with. And so that's what drives us from an operational perspective. How can we constantly create wow moments? So I'm gonna roll through what we call Yeah.

Nathan St Cyr 19:14

Can I circle back on one thing there quickly before we roll through this? Okay. You created almost there was almost this mantra, and now it's I hear it used like I'll just overhear it when in our team meetings, and it's just constant. There's yes, it's the wow moments, but I I also believe that the other thing that came out of that was we are going to obsess over the guest journey. Just we're gonna be obsessed over it. So, how can we go obsess over the guest journey and really think through every part of the process, right? And so that obsession, because what that obsession did is I believe what I watched, I'm gonna you're like The master integrator of processes, and you'd like, but really where it started for for me and watching you start to create these processes was listening to our guests, and it really started with your obsession over guest reviews. And when I say obsession, most people are obsessed about going out and getting five-star reviews because obviously that impacts you and all of that. But that was not your obsession. Your obsession was to truly just first listen. Like, what is the guest experience? What are they telling us about their experience? And you were looking at, I mean, every single platform. And where some of us would be like, oh, that's just a one-off. You'd be like, well, no, time out. Let's really, let's really hear what this person is saying. Let's go see how we can impact this. And it started impacting you driving, really creating process after process after process. And these processes, bro, were freaking over two and a half years. We're just like, holy crap, there's a freaking process for it. Like to go and execute at the highest level, you have to have process or an agreed-upon way to do something to execute at the highest level. We there, there were just like it was almost overwhelming from a process standpoint of wow, to deliver this, these are all the things that you need to do to make sure that that nothing falls through the cracks. But I want to fast forward right now. Because right now, dude, you're having the team integrate everything into freaking Notion to just go help it, help us be really easy to scale. Prior to this, though, prior to Notion, through our business coach, thank you, shout out to Rick English. He really helped take all of these processes that were created by you and really help us really make them succinct. And we rolled out EOS.

Michael Russell 22:00

So EOS, so EOS is a system of organizing your business. It's called the entrepreneurial operating system. It's based on a book by Gino Wickman called Traction. So we read that book and we took a lot from it. But then from there, we went and hired a business coach that could help us implement the lessons from the book.

Nathan St Cyr 22:22

Correct. So now we're sitting there and we have operations, our hospitality operations. Now we have them recognized. Like every component, every function of what it takes to go and operate. Like that going through that process was painful and time consuming to go through this process of, all right, well, let's think through everything that we do within our business to deliver that feeling, to deliver that and execute that award-winning hospitality feeling. How did you do it? And then going through and going, all right, we got to break down what all happens. But this systematic approach, I'm going to ask you if you can just roll through, okay, well, when we broke this down and rolled this out into functions, can you just, first of all, before you go into anything, can you just roll through what the functions of operations are or the categories, what what it takes to operate a hospitality business?

Michael Russell 23:26

Yeah, absolutely. So look, I I think that you you hit the nail on the head that there was a lot of work that it took to identify all of these different functions and then execute them effectively. But I want to also mention that if you have a guiding principle, it makes your decision making a lot easier. And for us, it was to your point, the guest journey. So everything that we were doing was based on providing the best guest journey possible. So prior to them arriving. So from the time that they are thinking about making a reservation, after they book, stay with us, and then ultimately after they depart, operations is encompasses all of that. And so every single one, every single touch point within their journey, the guiding principle is how can we obsess over the guest experience and provide the guest the best guest journey as possible. And once you have that guiding principle, I think it just makes the decision-making process a lot easier. That's number one. Number two, what I'm about to roll through with you might seem like a lot. And we'll go ahead and we'll share this in the in the show notes. We can give you a link to see our actual accountability structure with all the different functions and you know, itemized detailed exactly what each and every function does based on role. But for now, I just very high level, top level, just to give you an understanding of what those functions are. I'm gonna roll through these, but I also want to say they're pretty universal. It doesn't really matter what your hospitality asset is. I mean, all of these functions are gonna be very universal. And so once you learn this and identify it, and if you, you know, we share it with you, you you can really quite easily just plug in what what the different roles are for each function specific for your particular location or or your operation.

Nathan St Cyr 25:16

So and secondly, uh yeah, I want to go back to something you said earlier as well. You said, look, even if you're not gonna operate, right, if you're gonna hire an operator, if you're if you don't have the experience, you need a roadmap and you need some guidelines to be like, well, I better be checking in on all of these components. How do I audit? And how do I know what my ultimately, what my operator, how do I go and audit them? So I think either direction, even if someone's like, well, I'm not gonna operate this myself, well, you better have a roadmap. And I think this provides a roadmap for either way. Either what you need to go and execute at a high level or what you need to hold your operator accountable to in the hospitality business. So either direction.

Michael Russell 26:02

Absolutely. No, great point. I think that word audit is so essential. You talked about how I was obsessing over the reviews, but you know, I was auditing them, really looking at I wasn't judging whether or not, I mean, of course I wanted a five-star review. Who doesn't, right? But really, what I was judging is well, what is the guest, what are they sharing with us? What information can we learn from them that that will give us you know a guiding direction, how we can improve? So beyond just the reviews, we implemented a communication log within our staff. So, you know, for each shift, someone working the reception, you know, front desk or manager on duty, you know the the reception, they have their own little communication log where they're gonna take note of things that came up, like, hey, we, you know, a guest stubbed their toe on this, on this bed, like this particular bed, maybe, you know, could be could be dangerous. Maybe we need to replace it, right? Or we ran out of toilet paper. Was it like you scratch your head and go, well, how could you run out of toilet paper, right? But it's in the calm log, it's in the communication log. And so we addressed it. So we implemented things like, okay, well, are we servicing the bathrooms enough to make sure that they have toilet paper? So I don't want to go down the rabbit hole for all of these little things, but what you're gonna find is each one of these functions, there will be something that that that resolves every potential issue that a guest could have. And auditing this is the important point I'm trying to make here is whether you're doing it yourself or you hire a third-party management, you need to know what to audit. So at this point, I'll walk through what these different functions are, and then you know, if you want, we can drill down more specifically. But yeah, I love it. Okay, cool. So I'm gonna go through very quickly, just roll these out. Here are the functions marketing, and then lump together, we've got our website, our property management system, and our OTA online travel agency management. We've got staffing, manager on duty, housekeeping, review management, general admin, property maintenance, finance slash accounting, guest experience, community outreach, human resources, and lastly, revenue management. So within each one of those functions, there's a whole bunch of different roles that fall underneath.

Nathan St Cyr 28:26

Okay, so fair. So obviously the the listeners aren't seeing this, but if you look at each one of those functions that you just labeled, then underneath each one of them, there's function components, correct? Right. Will you just will you just pick one of those functions and then run down the things, the function components that will need to have processes around to ultimately you know fulfill the the guest journey?

Michael Russell 29:00

Hmm. Well, I don't know. Where do you want me to start? Like, is there anything that that pops out at you that you think is is more important or where you know, just where where should I start? Pick one. All right. How about guest experience?

Nathan St Cyr 29:14

Okay, yeah, let's go there.

Michael Russell 29:15

Okay, so different functions could be the reception/slash guest check-ins. What's that experience like? Tours and activities. So anything on site that you may provide, whether, you know, if in our case it might be an activity, it could be we have like a welcome margarita night where basically guests get together and socialize, but we sponsor that, we put that on to encourage guest interaction. Well, someone's got to manage all that, right? Guest experience, we audit the cameras to make sure that you know nothing is wacky. We respond to guest communication. So how to categorize guest communication, emails, etc. So this is important where this spins off into another function. So I'm gonna I'm gonna pivot over to we talked about I want to dig.

Nathan St Cyr 30:02

Can I dig in though before you pivot?

Michael Russell 30:05

Okay. Well, I was here. Listen, I was gonna talk about how that results to our technology, which would fall under kind of our PMS and whatnot. Okay. So okay, responding to communication. So we have technology in place that provides it makes it as easy as possible for people to communicate with us and for us to respond to them. So starting with our website, we've embedded you know a AI function for chat. And so if people have a question, the the AI chat bot on our website, on our on our homepage, is preloaded with tons of helpful information because we have so many emails, prior emails of people sending us the same questions. We took those emails and we uploaded it into the AI, and now the AI read through, however, let's say 10,000 emails. And based on that, now it knows the answers to most of the questions. So it's it's just like that was an easy hack. And so instead of someone having to try to call us, our staff being worn down by having to respond to you know messages, it, you know, having AI implemented in that regard benefits not only the guests, but the staff as well. So that's just one example.

Nathan St Cyr 31:14

I love that. Okay. So technology is a tool in ultimately saying, how can we make sure that this guest journey is the highest and best, if we can get answers absolutely immediately, do it effectively, efficiently, which frees up our team that's on 24-17 that's on staff. Now they're focused on guest experience versus answering a question that they've answered 20,000 times before. So implementing technology is a way in which we can enhance that function component. I want to go and and dig in a little bit because I know that there's like you talk about a function component under guest experience. I want to talk about activities.

Michael Russell 31:57

Okay.

Nathan St Cyr 31:58

Okay. So like this is the level of detail when you have uh when you have EOS and you have these components and you figure out processes and integrating processes into hospitality. I want to dig into um activities and ask you if there's processes that are applied to an activity.

Michael Russell 32:23

Hmm. Okay. Well, can you give me like a specific activity so that I I know what you mean?

Nathan St Cyr 32:28

Yeah, I'm thinking about like okay, yes, Road to HANA.

Michael Russell 32:33

Ooh, okay. Well, to start, we need to make sure the van is safe, right?

Nathan St Cyr 32:37

So there we go, baby. Come on.

Michael Russell 32:40

Yeah. So, you know, we we've got this van, and we our staff takes the guest on an incredible tour to go visit a part of the island that's lush and tropical and beautiful. There's waterfalls, there's incredible beaches. It's it is an amazing experience that oftentimes people pay hundreds of dollars for to hire a private guide, and we just offer it free. So that tour is an important part of our business. But day one, we didn't really know all the ins and outs of like, okay, what is the process? So we had to learn this. But for example, like these are just common things like, hey, let's check to make sure that the tires have air in it, let's make sure the window wipers work because you're going to a rainforest and the last thing you want is you know to not be able to have the windshield wipers functioning. So they do a they do a quick, they check the brake lights and all this stuff. But all common, you know, like how do you know they do that? How do you exactly? So the auditing part is now they have a uh checklist of things that before the tour, they have to go and fill out the checklist, then they bring it to reception, and then reception will enter it into our communications log, which goes to our management staff, which ultimately determines how many guests were on the tour, what was the condition of the van, anything that they've noticed that needs to be replaced or repaired, if there's an engine warning sign or whatever, the AC is not cooling. Like they just log it all and they go, it goes into our comm log, and then the managers review it each and every day. And those managers then provide an end-of-day report which goes to us, which we can then view. And they can ask for feedback or you know, if they have any questions about you know approvals, if they need to replace something. So there's this whole system that that that works like that.

Nathan St Cyr 34:19

Does that answer what you're looking for? Well, that's part of it, but how does a guest know that there's an activity on that day?

Michael Russell 34:26

Right. Okay, in terms of operations, how does a guest know? Well, of course, everything is posted on our website, so there's a schedule, but there's also an activity board daily, which provides the list of the activities that they can sign up for. And now we used to have a piece of paper that they could write their name on, but now it's all done through an electronic system. They scan our QR code and they can add their name to a list and you know it's first come, first serve.

Nathan St Cyr 34:56

But here's my point. When I look at this and I look at obsessing over the guest journey, the little things, the details, you didn't like the placement. You didn't like where it was in the beginning, didn't like what it looked like, went out and found, kept your eyes open as we experience different things along the way. And you're like, wow, that looks look, look at that compared to what we do. And then boom, you notate that, and you continue to find ways in which, all right, well, where can we put this to make it more convenient, to have it show better? And then from there, it's like, where's the next part? How can you the evolution of focusing on every single detail from when the guest comes and sees that visually, what does it look like? How does it make them feel? How do we include them? How do we make it simple for them and take away pain points for them? Like, I can go and break down to so now all of a sudden they're like, all right, they're signed up, they're they're good, there's there's wait list, there's communication, there's if they weren't on it, uh, there's internal communication that they can have with other people in the hostel that says, hey, we're gonna go too, but we're gonna drive on our own. Does anyone so you have all of these systems that have made it better and better and better? And then to the fact where if the van gets checked out, then from the van it gets goes to the, it has to be notated in the communication log, from the communication log, any manager can is obligated to. They have to send out a report that shows their initials next to everything on the com log so that it can be audited by the next level up to say, all right, eyes have been on this, somebody has already audited this, we're good. If there's a solution that needs to happen, somebody needs to present. I just I wanted to dig into that because something as simple as when people hear, oh my gosh, your guests had such, you know, we there's an Instagram post and it's like mind-blowing where you're like, holy crap, that's what they're experiencing. But that experience to execute it at that level and provide that moment of fulfillment, the amount of effort and energy and process, and then having it so that it can it can be audited so that nothing slips through the cracks. I think that it's important for people to understand that that's the essence of hospitality is creating that feeling. But what goes into it, I think people miss a lot. And I just that's that's one little teeny function component on that sheet that has had a massive amount of evolution and thought, but ultimately impacts the experience and makes us successful.

Michael Russell 37:57

Well, I think what you're describing is is the programming, right? So what I envision when I'm thinking about a guest experience, it's like I close my eyes and I'm envisioning, well, what is the guest feeling in that moment? And I think this is applicable for more than just our business, but for anyone's, right? And you mentioned that I wasn't satisfied with the way that the description of the guided tours that we offer were displayed on the wall. And I'm not naturally like an artistic person, but what I am good at is recognizing what others are doing well and just simply copying them. And, you know, of course, I didn't like rip off what others were doing, but I'm constantly taking photos of places that I think have done things well. So, you know, if I go to the Marriott, for example, and they have nice furniture, I'm I'm taking photos of that furniture. Like I just did this the other weekend here for my own home. I'm like, oh, cool. Like, look at the little fire pit that they have and that little you know chair and the way it's lined up. And so what you're describing is we went to a competitor and they had a display wall that ultimately I thought, wow, we should implement something like that because that is a good function. And thinking about how the guest is going to receive that experience in that moment, it's as simple as just kind of like going back to the journey sequentially when they walk in, when they open the door, how do they feel? What do they see? I mean, it could we can drill down to the sound, like the music that's playing. There's a certain type of audible music at a decibel level that we want because we don't want it too loud. It's kind of like the story of the the three bears and that what is it, the porridge, right? It's like too cold, too hot, just right. We want it just right. And so going and visiting other locations, it doesn't matter whether it's in your same genre of of hospitality. Pick the things where, like in our case, looking at furniture at the Marriott, we might apply a certain type of chair, or we may take you know, Starbucks, for example, and go, wow, when you walk into Starbucks, the music is always a certain type and it kind of makes you feel good. And it kind of puts you in the mood. Well, what I did is I went to a resort and I'm like, hmm, I like the way this music is making me feel. And I don't need my staff to like copy that playlist, but ultimately the feeling that a guest is having, I wanted them to implement that. So I'm constantly on like a it's like I'm a I'm recording, I'm video recording in my mind the experiences that I want my guest to have throughout the journey from start to finish.

Nathan St Cyr 40:27

I love that. And you as you were talking about the music and all of that, like there's there's levels of execution. Remember when we were at the Unique Stays Summit, and you know, we were going through best practices of design, and and one of the things that came out was was the sound. And was it hinder that? Oh, I don't know. I don't know. Well, she sends out, I think so. She sends out a curated playlist. Like as the person is there, they're like, hey, it's approaching five o'clock. The sun will be setting in 30 minutes and 15 minutes. Go ahead and hit the sound system and play this mix. And it sets up like the most perfect mood. So in hospitality, when we look at operations, how do we go and impact? You can really dig in and be very intentional about how you want to make a guest feel. And I think that, you know, that's that's the point here. But I want to go to another one of the components because I think that this one's this one's critical. And I want to go to the because there's several different processes that you implemented. I feel like you utilized technology, you utilized the human element of team and accountability. And this is this this component has maybe moved us forward, you know, faster, better than any. Is can can you go through the component of reviews? Sure.

Michael Russell 41:56

Like how we track reviews and how we audit them and then what we do.

Nathan St Cyr 42:00

I'd say, first of all, just the name of that comp that function is what's the name of it?

Michael Russell 42:09

Review management.

Nathan St Cyr 42:10

Review management. Okay, and then can you what are the the lower components of review management?

Michael Russell 42:18

Okay, I'm getting there right now. All right, so it's auditing review scores, responding to reviews, address/slash solve issues, driving quantity and quality of reviews, and team recognition for positive reviews.

Nathan St Cyr 42:34

Okay, great. So can you give us just you know, maybe a little little detail on those? Because I think that this is critical for like if you start here, if if somebody that's wants to go out and create a profitable hospitality company, they have to deliver a profitable experience. There has to be a win-win, right? The the the guest needs to feel like they won for you to win yourself, and that shows in reviews. So I think this is a great one to just do a little bit of a little deep dive into on these different components.

Michael Russell 43:12

Yeah, absolutely. Okay, so I believe that review management utilizes technology. There's a relationship there to start. Well, let me describe, you know, when I'm talking about review management, there's a variety of sources of reviews, right? So you've got Google reviews, you've got OTA reviews, whether that's you know, expedia.com and any of those derivatives. So you need technology really to have something where you can you can document all those. But before someone gets to the stage where they're leaving the resort or they've left and then they get prompted to leave a review, I want to reference that we have technology on site. When someone signs into our Wi-Fi, we prompt them to enter their email for access. Just like every other location, you know, whether it's a coffee shop or hotel, they typically require you to provide an email. Well, of course, there's an advantage of having their email for future marketing, but for review purposes, what happens is two days into their stay, they get an automatic email that asks them for feedback. And if they provide feedback that is excellent or good, so a four or a five star, then we automatically prompt them. It redirects them to our Google Places page where they can then leave a five-star review on Google. But if they've got a challenge or they're not fond of whatever, then you know, if they give us a three-star or below, then it automatically diverts that person to uh leave a comment internally. And so it kind of insulates us, it kind of allows them to vent their challenge. So, number one, allows them to get it off their chest, what's wrong, and hopefully, you know, get a solution if they're still on property and you know they can they they want a solution, we'll address it immediately. So this software, this technology notifies our staff when we've gotten review, good or bad. And so when it goes internally, we can immediately address it and then hopefully you know improve their experience.

Nathan St Cyr 45:14

So basically, technology helped you create the process that says we want to hear every single thing that we can from our guest, but we also so we want to elicit that. Like let's get as much feedback as we possibly can, but let's make sure that the positive ones go out to the public and the negative ones stay in-house. So you researched and found technology to help us with that as much as possible.

Michael Russell 45:40

Absolutely. Yep. And it works. We we get less poor reviews as a result, but we also get valuable feedback from an auditing perspective so we can make improvements to improve the guest experience overall. And we also put on site near the reception, we have a QR code that that you know prompts people, it says something along the lines of like, Hey, are you having a fantastic time? Like, you know, did we earn a five-star review? Please leave us a five-star review on Google. And so they can just use their little QR code with their phone and go review us. But seeing that at the front desk, you know, when especially since our staff is so outgoing and so, you know, so good at providing great customer service, they'll often just do it because we have the call to action right there in front of them. If you don't have the sign, that's one simple thing that like blows me away that people don't have a sign. They go, Oh, I'm not getting enough good reviews. How do I get more reviews? Well, do you have a sign up on your front desk or somewhere that's visible, maybe in the room, that says, please leave us a review and prompt them to do so? No. Oh, well, it's probably why you're not getting a lot of reviews. So that's one simple step. But moving on, auditing reviews is incredibly important, not just for our business, but for the guest. And so we have a system in place where we use a quite simple Google Sheet, and one of our managers will each week do a scrub of all of our different sources of reviews and put them into a spreadsheet. And it's just categorized where you know we have to have a minimum threshold, but it lists all the different reviews and it shows positive feedback and negative feedback. And then, of course, I'll scan the negative feedback. And if I see something there that we can improve upon, it's either in our control or out of our control. And if it's out of our control, we talk about it and we, you know, try to be solution-oriented, but we move on and we focus on the things that we can control, right? Whether the place is clean. If it's not clean enough, hey, what's going on? We need to implement a new process or otherwise address this because cleanliness is of the utmost priority to us. So this review audit happens weekly. And it's one of the things that within EOS, we do a success scorecard or scoreboard where we're auditing the average review score. And if our average review score dips, then us as operators of the business will look into this and be like, well, well, why did we dip? And then we can go into the weeds and look at the specific, you know, negative reviews and come up with solutions. But that auditing is important because it's direct feedback. You're getting direct feedback from your guests. If you don't look at those reviews and you don't audit those, you don't constantly monitor them, you're probably not going to improve. So it's been super important for us from us. That's really it it's driven, I believe, our success is really driven by reviews. We obsess over the guest experience, but we we really are obsessing over their reviews, and so we can provide that amazing experience.

Nathan St Cyr 48:36

Well, first of all, bro, I I I love the way you just broke this down. And I I think that this is very, very actionable because I feel like there's missing steps in there for like reviews. Everybody knows reviews, it's a simple thing, right? Like, well, how what reviews are you getting? How many reviews are you getting? Well, what are they? And I think that teams will go and they'll be like, look, we got this bad bad review. But I feel like what you've done really well is you've established a culture around those reviews where when whatever the review is, that then there's there's action that comes with that review, right? So if the reviews are positive, you have on your list lift up teammates if their name gets mentioned. So you're you're you're creating this positive environment around let's celebrate those that get positive reviews. Then secondly, it's all right, in control or not in control. It doesn't end there. There has to be a solution, right? Like, look, how can we control this? What do we have control? What part of us, what we do, how can we go get better? And then they have to they have to create that solution, right? There's a solution that has to occur. And then it goes from there to followed up on in the team meeting that it's one of the KPIs, and it has to be addressed, solved, moved forward. And so there's accountability that comes with it. So there's positive culture, and then there's also agreed upon standards, and then there's the execution. And if we don't live up to that execution, what's gonna be done? And it's all can be audited. And I feel like that's where the miss is for a lot of, and this isn't just in hospitality. This is I I think a key learning into building a process.

Michael Russell 50:48

And and I want to Can I talk about one more thing though? I just I think it's so important and it's so overlooked, but this is something that it blows my mind when I witness this. It's the response to the reviews. So someone leaves a negative review. How our team responds to that review is more important than the problem that the person reported. It's how they respond. I tell my wife this all the time it's not the problem, it's it's our solution. And originally, you know, our staff was just responding, and and sometimes we're being a little bit like defensive, like they led with defense and then towards the end, kind of acknowledge, like, oh yeah, maybe you might have been a little right. And I was like, no, no, no, listen, it doesn't matter what the problem is. Okay. In a sense, the the customer is always right in a sense, okay. So we got to lead number one when we're responding is acknowledge them, acknowledge their concern, acknowledge their complaint, because people want to feel important. And if you just listen to them and they feel heard, they feel that they're they're they're validated in whatever they have communicated, no matter how ridiculous it is, if at minimum you just repeat that you understand that they are frustrated because of XYZ, it doesn't just go a long way for that customer. It's everyone else that is viewing the response that is going to judge the merit of the issue. And so originally, you know, they had it kind of in reverse order. And so I was very methodical in saying, step one, acknowledge them. Step two, you know, offer an apology. Step three, communicate ways in which, you know, we either have improved or are going to improve. And, you know, this could have been something as simple as like parking, which is kind of out of our control, but we hear them and this is what we're going to do, and this is what we have done. So we didn't have a lot of parking. We went out, and as a result, and when I mean parking is our property has no parking, our property doesn't have on-site, on-property parking. And unfortunately, they're doing construction where the parking lot is directly across the street, and that's out of our control. What can we do? Well, we communicated to them, we understand your frustration. This is a temporary situation. We're going to do our best to find a solution. Well, a few months later, we went and secured through a private property owner a parking lot that we could lease so that we could provide parking for our guests, even though it wasn't on property. This provided them an area where they could park while the construction was going on. And then we went and communicated that in the response that we've done so, you know, so that if anyone is reviewing this, even if it's an older review, they see number one that we care. That's the most important thing. And that we've we'll follow up and we'll execute to the best of our ability. And sometimes, quite honestly, we can't solve everything. But as long as we show compassion and empathy and heart, whoever is reviewing this in the future, it diminishes the problem. It just almost eliminates it, evaporates if they just feel like, well, the management cares. So often I see in reviews, people start to get defensive and say, well, actually, this is what really happened. Doesn't matter.

Nathan St Cyr 53:54

Yeah. Dude, I love that. I think that that's that's that's gold. Uh, you know, absolutely. And, you know, uh what I'm what I'm feeling as we're going through this, because I'm like, holy crap, I mean, we just went through a couple of little components on on like this is just one little one little area of operations. And so it's like, holy crap, dude, we could we could run a three-day seminar on just the the operation piece. Like, hey, let's go through each one of these components. Let's show how technology is used, let's show like how do you get there. But I I do want to leave with an actionable piece because I I think that what you've done an unbelievable job at is you know integrating through this whole this this whole piece, all of these operational components, is you've created process. And so I just I want to kind of end with this this little piece because our listeners can go and get this. We're gonna just we'll be open. We'll just share you, share with you ours. Here's our components, here's what you need to know in operations. And then if they have further questions, look, look, reach out to us. We're this is our passion. So we're we're glad to um to connect and and help in in any way that we can make the hospitality space better for for sure. But an actionable step that everybody can take is going, okay, I can see that that to become award-winning, you have to have an award-winning process. What is process? Look, there's a lot of different ways to do things. What process really is, it's an agreed-upon commitment of the organization. That's really what it is of doing something. So it's setting the standard and then coming up with an agreed upon, because you can do things in different ways and create the same experience. But as long as everybody's aligned, we've agreed upon, we've set the standard, and then we've agreed upon the way that we're going to go about doing it. Now we have a commitment and now there's a process in place. So go attack your business in that way, making sure that you have processes and all of these different areas, and you'll come out more successful for it. So, look, after going through this, I hope that this is well, at least it has been for me. It's eye-opening how much has gone into creating the guest experience, how operations and having processes, how much they impact ultimately the success or the failure of the asset that you've purchased, what you're doing for yourself, for your investors, how you do operationally is going to have a massive impact ultimately on that end result. And so as I'm running through it, and I'm like, man, we could do no questions asked, three-day seminar. We could fill the thing with each one of these processes and digging deep into it. But I think that's also important. I we really want to provide you with value out of this. We want to post our actual accountability structure. And look, this took obviously, it took us two and a half years to create processes and then hire a business coach to really help us structure everything that we did to boil it all down to these functions and then the components under those functions. And we'll provide it to you for free. Go ahead and just jump on the hotelinvestorplaybook.com, jump on our website, we'll provide a link that you can go ahead and download. Secondly, you can always obviously reach out to us at the Hotel Investor Playbook on Instagram. But look, if you're gaining value from this, that's our goal. What we ask, return, give us a five-star review. That's what we're looking for. We want to continue this show. We want to be able to provide value to more people. So give us that five-star review and then share this with someone that you feel like would benefit from hearing it. And we're gonna sign off, but we hope you guys have a freaking killer week, killer day. And until next time, aloha