The Strategic Power of Third-Party Hotel Management | Bryan Fish E33

You don’t need to be an expert in everything to scale in hospitality, just need to align with the right consultants, operators, and partners who’ve done it before.

In this episode, we sit down with Bryan Fish, CEO of Reliance Hospitality, to unpack how third-party operators help investors go from scrappy operators to institutional-level players. Bryan shares what most owners get wrong during acquisitions, how franchise agreements really work behind the scenes, and why your ability to scale comes down to the team you build around you.

If you’re trying to grow beyond single assets and build a serious hospitality portfolio, this episode lays out the roadmap.

About Our Guest:

Bryan Fish is the CEO of Reliance Hospitality, a full-service hotel management, development, and consultancy firm with a growing portfolio across the U.S. and Europe. With experience opening and operating over 100 hotels, Brian brings deep expertise in brand strategy, operational efficiency, and investor alignment. Through Reliance, he helps owners optimize performance, navigate franchise relationships, and scale with confidence—whether they’re launching their first boutique or repositioning a $50M asset.

Email: bfish@reliancehospitality.com

Website: www.reliancehospitality.com

Instagram: @bryan.fish

LinkedIn: Bryan Fish

Connect with Michael on Instagram or LinkedIn.

Email Us at info@hotelinvestorplaybook.com

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Transcript

Michael Russell 0:00

Here's the truth. You don't need to know how to run a $25 million hotel to own one. You just need the right people around you who do. In today's episode, we sit down with Brian Fish, CEO of Reliance Hospitality, and he connects the dots in a way that really hit home for us. If you've been wondering how to go from scrappy operator to institutional level investor, this conversation lays out the playbook. It's not about doing it all yourself. It's about aligning with the right consultants, operators, and partners who've done it before. We talk about when to bring in a third-party manager, how to avoid costly acquisition mistakes, the real cost of branding with Marriott or Hilton, and how to build a team that takes you from small time to big time. If you're serious about scaling, this episode might just change how you think about what's possible. Let's dive in. 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 1:08

Get in the game.

Michael Russell 1:22

On this podcast, we talk story about everything you need to know to make money investing in hotels and hospitality assets. On today's show, we have Brian Fish. Brian, welcome to the show.

Bryan Fish 1:34

Thank you so much. I'm glad to be here.

Michael Russell 1:36

Why don't you start by giving us a brief explanation of what you do professionally at Reliance Hospitality?

Bryan Fish 1:44

So here at Reliance Hospitality, we're a hotel development management consultancy media and travel company. So essentially we develop projects that we want to see come to fruition with our clients that ultimately we then manage and then help them hopefully trade down the line, is all the intent so that they get their return on their investment at the five or seven year mark. From the consultancy side, we do everything under the sun. We do sales, property sales support solutions, accounting outsourcing, digital media marketing falls kind of more in the media side of business, the business. And then for media, we do social media management, like I just said, we have the podcast, checking with Brian and Jeremy that we do. And then we have a travel agency also called Destinations by Reliance. We kind of try to cover the gamut of the hospitality space.

Michael Russell 2:28

So I'd like to know you've worked with some of the biggest brands in the world, Marriott, IHG, Hyatt, et cetera. What kind of gap did you see in this industry that made you want to start Reliance Hospitality?

Bryan Fish 2:38

So for me, it's really about a sea of sameness that I realized is every hotel management company out there essentially uses the same tools, uses the same systems, looks at the same reports, and we all typically charge about the same amount of money as well. When you look at the brands of as an example, they all have their corporate management arms as well. And they're they're the masterclass at the Sea of Sameness. They do and they do it very well. And there's a there's space for those operators, but that one size fits all doesn't necessarily fit all. So if you have a hundred-room boutique hotel on a beach somewhere, that operating model that the Marriott's and the Hilton's of the world have for a 400-room all-inclusive resort in Mexico, that operating model doesn't necessarily translate. For us, what we love to do is we're able to customize the solution for each client and look at what's really going to make it them maximize their return while also keeping the regulatory compliance and all the things and all the reasons why you do hire us to make sure that from a human resources perspective, you're in line from any liability things that you're covered and that you're not worrying about operating about telling a database. But it's really about breaking that sea of saneness and understanding that we can really be effective with technology, we can be effective with being creative about how we stack our services and not trying to fit this one size fits all model into investors because one size just doesn't fit all. And it did for a long time, but especially in the current climate, it doesn't. You've got to, you've got to adapt.

Nathan St Cyr 4:12

Can you give a specific example of how you're going to view that hundred room boutique hotel and how independently you can capitalize on creating a differentiator and more profitable organization for that developer?

Bryan Fish 4:27

Yeah. No, absolutely. So we don't come in from the start and say, okay, you're a hundred rooms, so you need to have six managers, starting with the general manager, a director of rooms, and then a front office manager, and then a front office supervisor, and all these different levels of people. Whereas larger organizations typically do that because they've got a reporting structure that they have to fit it in with above property. Our structure is so that it's flexible above property. We don't have to have that structure on the hotel. So your rooms, we'll use rooms expense at that hundred-room hotel as an example. We can keep that rooms expense at 26 to 29% by not adding additional layers of management and really making sure that we're putting tools in place from an efficiency standpoint, be it AI tools or different things, different things we're able to give the hotel to let them be more effective with a leaner team. And then we also provide back office support as well from our side that allows that hotel to function at that 100 room level. But at the same time, say that you then go down the street, maybe we have a 200-room hotel. We're flexible and we can then we'll grow with the hotel and we'll change our model there. So really, it's not that we have a cookie-cutter model. It's we create a new cookie cutter for each project.

Nathan St Cyr 5:45

Okay. So a lot of that what you just described was about efficiency, right? That you have the ability to customize and look at from an operational standpoint. There's areas of efficiency that as a property manager, we can come in where if you're going with a brand, they're going to be more just cookie cutter and they're not going to have that level of flexibility. What about from a guest experience? Is that guest experience thesis? Is that designed by you or is that designed by the investment group or the developers?

Bryan Fish 6:19

So it it really depends on the type of project that it is. So we'll use the boutique hotel as an example. If it's a Marriott Autograph Collection hotel, the developer would have hired a consultant to come in and come up with, you know, what that brand ethos is for that location. And if that's the case, we're going to implement that and we're going to live it for that hotel, for that guest and live that experience. One of the things that does get my like hospitality juices flowing is on a project where it's completely independent, you don't have a franchiser involved, and we can be involved in that process because we're able to take all the best practices that we've learned at all these major franchises and create an amazing guest experience because we're picking all the best things out from the places that we've been, the places that we've operated to really make that guest feel like they're special. And that's one thing I think is still very unique with the independent hotel space and exciting about it is it's not the same experience everywhere. We we can create a different environment in every place that we go.

Michael Russell 7:17

All right. So can I clarify something? I just want to get my head wrapped around this. You guys do third party management, and you described, okay, developer wants to go and build something, and they have a certain brand or a flag in mind that they're gonna design to conform to whatever requirements are necessary to produce that that experience that that brand provides. So where do you fit in this? Because when I look at the Marriott or any of their sub brands, I'm assuming they're managing. But what I'm finding out is well, actually, maybe they're just selling the brand and they're they're franchising the label or the brand, but they're not actually involved in day-to-day operations. And so I'm wondering for all of these Marriott hotels, are there independent third-party management companies that are doing the operations even though they're all carrying the same brand flag and they're all just kind of following the playbook that the Marriott tells them to do? And so you guys are kind of like there's there's the developer property owner, there's the property manager, and then there's the franchise company. Are those the three different components, if I understand correctly?

Bryan Fish 8:27

No, you're correct. So, in in essence, and it's not just the Marriott's of the world, it's the Hilton's as well, and any IHG property. The majority of the hotels that you visit, especially here in the United States, when you visit them, regardless of the sign that's on the building, that company is not actually operating that hotel. There's a third-party manager behind that. So it would be either it could be us, Reliance Hospitality, it could be Ainbridge, it could be Highgate, any of these other larger development companies that also have third-party management services. It's interesting because to your point, a lot of guests do think when they check into the hotel, they're just they're assuming it says Married or Hilton on the outside. So they think that they're running it, but in most cases, they're not. Now, for hotel owners or investors and people who are wanting to develop a project where the third-party manager comes in as say that you want to go build a Hilton. You can't necessarily just go to Hilton and say, hey, I want to build a 250-room Hilton and I'm gonna run it. They'll say, Well, you either need Hilton managed to run it for you, so the corporate management arm to run it for you, or you need to go find an approved third-party operator. It's the same at most of the major franchises at this point. And really, that's been an evolution in our business over the last 15 years. As the franchise companies started to divest themselves of assets and realize that they really didn't want to hold real estate because they have to take all the risk at that point when they're owning it. As they've divested, they did grow their management side, but they've actually started to scale that down as well, where they're relying on more partners like us to operate the hotels, again, to reduce their liability overall. However, when you look at all the major franchise companies, the one key thing to remember these days is you have to call it a franchise, but they're really marketing companies at this point. So they've got you've got Hilton Honors, you've got Marriott Bonvoy, you've got the Choice Rewards program, you've got World of Hyatt. That loyalty program that they've built is really the engine that's driving their business at this point and what's selling those franchise agreements to investors. They're leveraging their size of and system of scale to tell you, hey, if you put my name on your building and you sell through my channels, you're going to get as a return. And they collect your fees, but they have no risk. So where the third party comes in is we're overseeing operations on a day-to-day basis. We're reporting to the actual owner of the hotel or the investment group that owns the hotel and actually making the business function. Now, we can't make it function without the franchiser at the end of the day because again, we need that system that they've built that you bought into to really produce. So a lot of what we do on the franchise side is also managing all of those controls and levers on the franchise side to make sure that the investor is getting everything out of the franchise that they're paying for, which in some cases, your overall cost after royalties can be almost 20% of your revenue in some cases. So when you're paying that kind of money, you want to make sure that you're getting everything that you agreed to at the start.

Michael Russell 11:33

Yeah, I mean, let's press into that. Let's say that's 20%. You guys have a property management fee. Let's say it's anywhere from 4% to 8%. I'm guessing. And then you add on top of that OTA fee.

Bryan Fish 11:45

You just made my heart like skip. If you anybody charges you 8% to manage their your hotel, call the police. That's insane. Like, so most companies are gonna fall between like two and four percent on the luxury side. Maybe you'll get to like the six and seven percent, but then you're also probably not paying a lot of other fees that you would pay. Like there's more wrapped into it. But yeah, for a typical hotel, like um, you're looking at two to four percent. And again, it's scale. So I know you both have a goal of what you want your portfolio to look like. You're going to have a portfolio of size, right? And it's scale, and you aren't going to pay 4%. We're not gonna let you pay 4%. We're gonna tell you no. Like if you called me and said, hey, help me with this, I would tell you if you have 20 hotels, you should be paying 2.5% at the most.

Michael Russell 12:34

And then I presume there's a bit of a discount that you can receive in terms of OTA commissions, because if you're with a branded company, I'll use the Marriott or the Hilton example, they're gonna probably negotiate with Expedia or Booking.com or whoever, right? Whichever OTA to get a lower commission, I would expect. Is that the case?

Bryan Fish 12:55

Exactly. Like I was just on a call earlier today for a client that is transitioning their hotel to another brand. A great example there is their contract with Expedia Group, is they have six months of the year that you can have a reduced commission. So that commission you're paying is 15% on those six months. And the other six months of the year, you're paying 16%. So you're paying 1% more. Well, that doesn't get me that excited, though. I mean it doesn't give you that excited. Well, now, like this specific property that we were talking about this morning, that 1% that they're gonna take advantage of that discount is in the peak of their year. Like that's when they make all their money, is during those that six month period. So that extra percent does it does add up over time. Looking at it from the when you join the franchise like that, you're getting that discount. Whereas if you're an independent hotel and you don't have any relationship with a man, a third-party manager, you're just Bob Smith gonna go sign an agreement with Expedia Group, you could end up paying 22 to 24% commission. And typically those hotels that are independently branded and they may be independently run, they're also most of their business is coming through the third parties. So you're looking at if you're paying 24% across the board, that's a lot. At the end of the day, that is a lot of money, which is where a lot of independent hotels have now started signing up with the larger franchise systems so that they can leverage those discounts with the third parties.

Michael Russell 14:23

Yeah, like the SOP brand and things like that, right?

Nathan St Cyr 14:26

And what do they expect with the larger brand? What do you expect to come from that brand internally from a revenue standpoint? What percentage?

Bryan Fish 14:37

So it really depends on the market that you're looking at. I would say I've heard people say, hey, it should be 80% like brand contribution. You might get to 80%, but that's always going to include the OTAs because it's counts because it comes to their system. My thought process with it, depend if it's a full service hotel, you should be getting, you know, in true brand contribution, you should be getting anywhere from 45 to 55% of just direct like traffic from them. And then you and then you have to still have some sort of local property sales effort to then fill the rest of your your rooms. And I think that's one thing that gets lost a lot of times is you're like, hey, like I I opened this hotel and it's I franchised it. And why are they not filling up my hotel? It's like, well, they're not boots on the ground. You still need to have somebody that's actually going out and searching for that business. Now, when you look at the limited service space or even extended stay, you know, that contribution is going to be higher. So if it's a Holiday and Express, the brand is gonna drive 75% of your reservations just because people know Holiday and Express and they're not looking for anything more than a room.

Michael Russell 15:45

Yeah. No, I can see that. I mean, look, I I do this all the time. I go straight to Marriott.com and I thought I was booking through Marriott. Now I realize I'm booking at some investor's hotel and Marriott's just slapping their name on it. Yeah.

Bryan Fish 15:56

Hey, but you're you're making you're making Marriott's balance you look better every day that you do that. Because they're still they still collect, they'll collect their six percent royalty or eight percent royalty, plus the hotel's getting billed for all sorts of other services as well. So they're making 20% of the revenue that that investor is collecting.

Nathan St Cyr 16:14

So Okay. So philosophically, we're in a little bit of a different space where we we are seeking out more independent opportunities, right? We're in the beginning journey of our our hotel purchasing. And so at this point, we've really looked at more independent, but Mike, Mike and I both see the future in the opportunity to expand and grow, will really come at a larger scale. We're very strategic, and I'm very strategic. So when I start to think of these different brands and what they have to offer, and then you think about one that may not be operating, you may have this asset that's sitting there, and you're like, that just doesn't make sense there. What if we did this? And I I would assume that this is something that you do on a consistent basis is look at, okay, well, let's look at this area, let's look at this market, let's look at this asset. And if we could wave the magic wand, what brand would align best with this to produce the best result? Is that something that you do on a consulting basis, or is that something that you do as a a la carte service, or is that something that that just comes with your overall who you guys are? Hey guys, quick heads up. If you're passionate about hospitality investments, excited by the upside and want to get involved, but you're not quite ready to take on a full project yourself, listen up. We've secured a flagship property in downtown Los Angeles that fits our hospitality model perfectly. And we're targeting 20% plus returns for investors. We're opening this first to our accredited podcast listeners. You'll get early access to the full investment overview plus a behind-the-scenes look at how we're bringing the project to life. Just hit the link in the show notes to check it out.

Bryan Fish 17:58

It really depends on where it where it's coming from initially, I would say. So a lot of the developers that we work with, I'm looking at things every day and looking at different sites every day, and they're sending things that I'm quickly looking over and saying, yeah, we should do this, this, and this to give it a once over, and then we're going and digging in deep. And then, and we do that, we'll consult on that too. Like you can hire us just to do a feasibility study. I always tell this story because I think it's just it's kind of says like who we are as a company and who I am and what I'm trying to do. It's like I had somebody call me and they were like, Well, we want you to do a feasibility study for this specific property to make it a something kind of than like what you were describing.

Michael Russell 18:36

What does that cost?

Bryan Fish 18:37

This one was gonna be about $14,000. And I honestly, and I told the gentleman, I said, I'm just gonna save you the $14,000 and give you free advice. Like, it's a bad idea. I can send you a bill, you can pay me, but I'm gonna tell you the report's gonna come out and say this is a bad idea. And he was a little taken back that I said it, but I'm like, I'm not gonna take your money and just to tell you something that I know instinctively off the top of my head is not a good idea. But I think, especially in the climate that we're we've been in, I think it's gonna get even more where you're going to see more hotels and different assets come up on the market where they have put the wrong brand in the wrong place and they've positioned the hotel wrong. It's either because it's been a conversion from something else to something else and it wasn't converted properly, or the market's so saturated with inventory that in those scenarios with their inventory is saturated, there's really not much you can do. Like we can slap any name on it and it's probably not going to move the needle. Whereas you may have a hotel in a place where they put an upscale hotel in a town that really can't support an upscale hotel. But if we take it, if we downscale it to say from like a full service Marriott to a holiday in, you'll see you'll see some success. Because again, it's not necessarily about the building itself, it's also about that brand. Because remember, it's a marketing company and there's people that they market to. So there's a thought process behind it when the person's booking. So I think as people have become over-leveraged, like over the next like 12 months, there's certain people that they're these hotels are going to go up on the market because they picked the wrong brand. But they got a good deal from the franchise. They got either they got key money, they got low fees, or they got a really good deal on the actual asset itself. But interesting thing there is if you got a really good deal, you need to also ask yourself why is this a very good deal?

Nathan St Cyr 20:27

What happens there? What happens when it doesn't perform and now your debt comes due? And what happens to the marriage to that that franchise?

Bryan Fish 20:37

So I'll take a little liberty here to say that that is where like a third-party manager comes into your favor in those scenarios because we're able to essentially speak the brand's language when it comes to those scenarios. So if it's a matter of us trying to get you to an exit ramp that is not going to destroy you in the process, we'll do that and we can have those conversations. It's about having the your operator holding the franchise accountable through the process to make sure that if they're if the franchise isn't performing, that that's well documented. So that if you do need to sever that relationship, you can essentially say, hey, like you're in default of your agreement because you didn't deliver for me. They're never going to guarantee a return. No one's going to do that for you. But I will say, going to the other side of the table from the franchise's perspective, typically they will have told you up front, like, hey, well, if you're going to do this as a holiday in, you need to do all of these things in order to be successful. So, and most of those are usually capital investment from a renovation perspective. The ones that I, the assets I see that end up in a bad situation are the ones that didn't do everything that they were supposed to do at the very beginning. That then leads to guests being dissatisfied, your business goes down. You can't charge the rate you were going to charge. And then that typically will be the same investor that will say, well, it's the franchise's fault or it's the third-party operator's fault. That's not necessarily the case because if we roll back a few years, well, you were supposed to do all these things and you never did it. But that's a hotel where then you might go and buy it up and you do put the money into it, and then you make it successful because you did the investment. And that's the key thing is to always remember. And as you guys are getting into this game, I think my best advice I can give anybody is you always need to plan for the exit in any in anything you're buying, because the real the reality is if your plan is to buy it and hold it for the next 30 years, you're definitely gonna have to ride the waves because it's not going to be sunshine and rainbows every day. You need to have a good plan. And that's what we do is take a look at okay, when you buy it and you do all this work and you put X dollars into it, at year five or year seven, you're gonna sell it and exit. And this is what your return is going to be. So you can take that and then reinvest it in the next project. And that's really where you'll get your top dollar is if you've been investing in the property and then you're selling it at that five or seven year mark.

Nathan St Cyr 23:04

Because a lot of that, a lot of that capital reinvestment's gonna come due at that time at that five to seven year mark. But what happens when you find a market where because then you're timing them, you're having to time a market, which never feels good. Yeah.

Bryan Fish 23:19

I mean, I will say like the five to seven years, like it used to be hey, every five years or seven years you have to do a renovation. The franchises have done a very good job of like elongating that process now. Was just hearing about one that they're like doing a 14-year renovation cycle now. That's also where timing becomes important, and that's where that feasibility study does come into play big time because if there's any chance that that market's going to decline in the next 12 months, you may need to put a pause on that project and go to the next thing and wait because you don't want to be you don't want to build something, and then you the day you open, like you're in a declining market. Yeah. So yeah.

Michael Russell 23:58

I mean, I think the the principles of what you're describing apply for any business, and that's the unique thing about hospitality. It's real estate and a business. But any major franchise, we could use McDonald's or any of these subway, whatever, right? It's okay, well, why should I invest into McDonald's versus just opening up Mike's burger shop? Well, Mike's burger shop, I could be more profitable because I don't have to pay franchise fees and abide by all these regulations and rules, and I don't have to renovate and add a new slide every six years or something like that, or kids' playground or whatever. And so then there's this like gravitation towards that because it seems um less costly and more profitable. But there's a reason why McDonald's is like the largest food service company in the world because they've created a formula, they know it works, and they help their operators by not just providing the brand, but helping them make smart decisions based on their collected experience. And what you're describing makes a lot of sense. If you've got this huge building and you you align with the brand, then they're probably not just gonna go open up a Marriott in a place where they expect it's not gonna do well. They're gonna align with you and give you the tools necessary so you can be successful, and they're also gonna expect a professional operator to partner with you so that they trust the performance will be there for what they're what they're wanting to achieve. And those are for larger properties, though. And and I I get that, but I'm also curious, what about the smaller properties? I want to know from an acquisition standpoint, how do you participate in helping an investor to evaluate a deal? Like, are you helping them when they're looking at this first before they bought it and say, was this in a good market? Or do you help them understand, like, okay, well, maybe you like the deal because it's in a good market or it has good bones, or like how the deal is structured? Like, are you participating in the acquisition?

Bryan Fish 25:48

Yeah, so we do we do participate in the acquisition and the the best clients are the ones that call you ahead of time before they've done anything and they they want to do something because getting an experienced operator involved from the beginning of the process is huge because especially if you're looking at the independent space, we can go out and take a look at it and you're going to be up against all the McDonald's of the world, right? So we can take a look at that independent and figure out, okay, like, is this really the right place to go? Is this the right corner to be on? And some cities, as we know, like you can just be like a couple blocks in the wrong direction and it makes a big difference. So we'll take a look at it, determine, okay, this is what we think you should do, and then look at it from a physical standpoint as well and say, hey, like these are some things you need to pay attention to. And then I always advocate, like, we will tell you, I'll be the first to admit it, we'll tell you, like, we'll say, hey, go hire a marketing company, do these things so that we can get you set up for success. But then when you're actually ready to do the deal, we'll help you. We've got partners that we work with to help you do your capital stack so that you can take a look at what equity you're putting in. If you need to raise capital, we can assist with that. And a lot of that, again, if you get us involved at the beginning, is crucial because one thing I've learned is the numbers are the numbers, but it's all about the story, right? So people will fall in love with a story and then they want to invest in the story. Investors, guess they're all the same. They just want to understand, they just want to hear a great story and they want to experience something, right? So it's we, it's our job to make sure that everybody feels good in every single one of those instances. So, and I don't always deliver good news to people. I deliver bad news sometimes too, but I it's about how I deliver it. It's crucial. Like if you get us involved before you go and buy a hotel, especially on the independent side, we can really pull the data and actually make it make sense to determine if this is really something that's going to work out in your favor or not. Um, and tell you also, does it need to be independent or do you need to engage a soft brand, or do we need to put you on some sort of other platform that gets you some more exposure? And to your question, Michael, in terms of like when our services come into play, we are very transparent at the beginning. A lot of times you may not need us. So say you're buying like a 30-room bed and breakfast type boutique hotel somewhere. We're gonna be too expensive to third-party operate that for you. But what we can do is we can provide all the sales support so that you're set up correctly. We can help you with the revenue management, and then we can consult with you on an ongoing basis so that when you do need help and you need somebody to call and find out, hey, like this has happened. What do I do? We can provide that level of support. Those are the types of assets where having a third-party manager, you're essentially paying us because the fee bottoms out at a certain point, right? So sure, you're you're paying a monthly fee that doesn't necessarily make sense, but you can pay $3,000 a month for sales and revenue management support. Or maybe you have a great salesperson, but you need help with your digital media. Like we can supplement what's not happening at the property level. Or, and I always say this like, there's a lot of some great operators out there that are really good at operating a hotel in terms of like the day-to-day, but can't sell anything.

Nathan St Cyr 29:02

But just time off for a second. I I gotta just get right to my thought process. So at what we call you, yo, Brian, we've got this property, we want to get you involved, we want to get your thoughts. At what purchase price and expected revenue would you say, okay, this is about the entry where we would get involved with providing a full service, third party, and hey, we'll help you through feasibility, we'll help you with everything that you just talked about. Is it revenue-based? Your expectation of, oh, that's gonna do $2.5 million of revenue. Okay, we could get involved there or not. Like, where does that start? Like, how would we know as we're underwriting and when we're looking at revenue, when someone like you would be a full service opportunity?

Bryan Fish 29:49

So, really, it's that it's $3 million and above, is where we're we're full service, we're there start to finish, and we can we can do everything for you. If it's less than $3 million, those are the deals where really we can we can still help you, but we're helping you on a consulting basis. So you're paying either an hourly rate for the support that you get from our team, depending upon who you're working with, or you pay a flat fee for if you just need the feasibility study done, then we start to piece it, piece it together for you and put together a cost of package. But, you know, to get straight to it, yeah, if it's if if it's the rev top line revenue is gonna pencil out of $5 million or more, third party management is great or three million is great for you.

Nathan St Cyr 30:32

But you know, let's say we're looking at a $15 million property and we're like, okay, we can we're looking at the revenue and we're like, look, we we this is a value add opportunity that we could go in and but man, that's from a capital raise standpoint, that's that's above what we feel like we're gonna be able to raise, right? So you mentioned right there that you can get involved with the whole process. So what does what does that look like? And and let's say, let's assume that you have trust in Mike and me. You're like, these guys, look what they've done. Here's their portfolio. We trust these guys so we can get we can get behind what they're doing and and sell that narrative and story so that everybody's good and trustworthy. What then how do you come into play and what what what does that mean for the long term?

Bryan Fish 31:21

So the long-term process there is we would help you put your business plan together. We would do the all the financials, put everything together, look at the capital stack, figure out how we need to raise it. We would then take it out to market to look at private investor equity groups that we work with, say, hey, this is an opportunity. We believe in it, we like these guys, they know what they're doing. This is what they want to do. And then in those situations, those types of deals, really where we get paid is on the actual transaction. So when you've had us involved in that whole process, then we're essentially getting paid when the trade happens because we're getting paid out of the fees that are paid at closing, essentially. And then from there on, then if you need help with construction, like we'll manage the construction for you. We'll do if it's not an open hotel, we'll do the pre-opening service for you for you, and then it will lead to the actual management of the hotel. But and that's how those work. So those types of long run deals, the whole entire goal there is we're not even going to agree to it if it's ultimately not even a hotel we would want to manage. So the goal for us obviously is to get you through the whole process, raise your capital, get your hotel open, renovate it, open, and then we manage it for the next five years until you trade it.

Michael Russell 32:33

All right, but you take a piece of the acquisition fee, which hey, it's worth it. You're aligning with the investor, you're partnering on this, and so curious, like, well, what percentage of the acquisition fee would you typically take?

Bryan Fish 32:45

It's kind of like the management fees, it it depends on the deal, and it can be anywhere from two to six percent, is typically what I see.

Nathan St Cyr 32:52

Dude, I like this. I'm freaking I'm dude, I'm freaking getting, I'm jacked right now. This is a lot. No, I mean, seriously, though, I mean, this has been so core to our philosophy from the very beginning, is that number one, a lot of this is mindset, and then take having the mindset of wow, okay, while we go put freaking experts and we go, we go team up with people that are way above what that are experts in what where our gaps are, and that's how we go and grow and grow quicker than most people, is because we've done that and we spend for it, and then we learn from it, and then we level up. And so for me, I'm like, this is this is an exciting conversation to really see the potential of where we're headed.

Bryan Fish 33:40

You make a good point, and I think it's something that some people forget along the way. Like, I'm the CEO of Reliance Hospitality. I guess I should know everything. The reality is I don't know everything, and I am not good at everything. My colleague Heather feels that it's our SPA commercial, like she knows how to sell better than anybody I know. She's better than I am at selling anything. Like, that's just the way it is. Like, she knows how it works. So if you know like where your shortcomings are at, like that's where it's like get other people like that know what they're doing because you're ultimately all going to be more successful at the end of the day. And that's what I love about the people that we work with. The clients that I love the most are the ones that like we're a team and we're trying to get the project to the finish line together because we all benefit, as opposed to just you just send me a check and then I never hear from you again. And we, I mean, I like those kinds of clients that send checks. But it's just a it's that rewarding experience because you can see it. But people I love to work with are the ones that are like, I'm not good at X, Y, and Z. Help. Because it's like, okay, like let's help you. Let's do it, let's figure it out. Or if I don't know, I'll call somebody.

Michael Russell 34:42

You're you're helping to connect the dots. So there's this ladder of sorts of investing where you start with maybe it's a short-term rental or something. I'm just picking an example of someone who wants to get started investing. It's like, oh my gosh, I want to be a real estate investor. Well, I'm gonna do something that seems feasible. I'm gonna buy a single family home. Maybe I'll short term rent it. Oh, wow, I like this hospitality business. Let me go buy a small hotel. But then you're walking down, are you in Phoenix? I'm Phoenix. Right? So behind you, there's all these tall buildings. You're walking down Phoenix, some street in Phoenix, and there's these huge skyscraper buildings, and you're like, who owns those big ass buildings? And what you're helping us to understand is well, the connection between owning those big ass buildings and starting with a single family home, it's it there is a ladder, but that ladder is built with teamwork. And the people that you put on your team aren't necessarily those that you're training yourself. You're not becoming an expert on operations and how to operate a hotel. You're becoming an expert in evaluating whether or not the third party manager can perform the operations that you need for this hotel to be successful. And that's where your skill set becomes is conducting the orchestra of talented components and letting them do what they specialize in. And in your situation, you're a little bit more unique than what I was expecting because you're not just a third-party operator, you're aligned with the capital, you're coordinating probably some of the due diligence, you understand the language that these franchise companies speak, and you have relationships, presumably, with them. So you know how to deliver what they're looking for. So in this case, it's like, wow, the leap on the ladder or the climb up the ladder, it now becomes a little bit clearer on how to do so from being a small-scale operator to owning a big ass skyscraper type of hotel.

Bryan Fish 36:27

Yeah. No, 100%. It's it like it is to, and that's the thing about like again with third party like people like me, it's like because we've had colleagues at all sorts of different places, it's, you know, when we do get into a little bit of a like a tight corner, we're trying to figure out which way to pivot. It's like we've got those people inside all these organizations that we can call and say, hey, like this is what's going on. Like, what do you think we should do um to get that candid advice? Which again, using the ladder reference, it's like at when you're at the beginning of that ladder, you don't necessarily have those people to pick up the phone and call.

Michael Russell 36:58

We spoke with uh uh another third-party property manager, Brian Tubal, a few episodes back. Awesome guy. But one of the things that he said in that episode was we have our Rolodex of contacts, but when you align with someone else and you're and you hire someone or you partner with them, now you're you're collecting all of their contacts and their Rolodex. And that that leverage, that power just it grows you exponentially.

Bryan Fish 37:22

The thing is like, because everybody's typically in different circles, right? So they've you've got your people, but then when you start to get all your people together, that's really when the magic starts to happen. And and I always say I like to work with people I like to work with too. So like everybody's got to like those are the people I like as long as are the ones that want to get together and want to get things done and feel the reward on the other side. Right.

Michael Russell 37:45

Well, can I shift gears just a little bit here, though? Is there a common acquisition mistake that you observe that maybe owners repeat or something that they miss in the acquisition stage that you feel like, gosh, if only they had done this?

Bryan Fish 37:59

Okay, so I'm gonna get on a soapbox for just a moment. The number one thing that I've never understood about hotel investors is when in when you go buy a house, maybe you're spending $500,000 on a house. You're going to have it inspected. We all do it, right? What I've never understood to this day is the number of people that go and buy a hotel, a large commercial building that's gonna cost them 16, 20, 30 million dollars, and they don't want to pay for an inspection of the building to determine what is under this place and what's going to happen after I've acquired it. I like when you say number one mistake, like that is what instantly comes to my head because I've just seen it happen so many times. And the reality is you don't know it at closing that you didn't do it. It's three years from now when I have to tell you, so your elevators need to be modernized and you need to spend $500,000 to do it. And oh, by the way, like the last guy that owned the building knew that this needed to happen too, but they never did anything about it. For me, especially if you're buying an existing property, even I think outside the hotel space, I obviously see it from my lens of hotels, but I would think any property you're buying, regardless of size, like spend the money and have a good environmental inspection done on the structure because it's going to save you down the line. Because if you find out that, again, going back to what I said earlier, if it's a if it's a good deal, you also should ask yourself why is it a good deal? Because there could be, I mean, I've seen it firsthand where there can be five, six, seven million dollars in deferred maintenance that you don't know about. No franchiser under the sun is gonna put that in a property improvement plan. Have to do that inspection. You have to do that inspection and pay for it no matter the costs.

Michael Russell 39:56

There are specific inspections that you suggest. I mean, there's there's a property inspection, but like environmental assessment or structural engineers have to get involved because yeah, those can get expensive, I would assume. So do you recommend anything in particular?

Bryan Fish 40:12

So it's really, I always say start with the environmental because that's gonna cover that's gonna cover pretty much everything that's visible on the surface. Get that done first, have that conducted, and then go from that survey and determine, okay, are there do I need to get a structural engineer in to take a look at the structure? If it's a high-rise building, then you definitely always want to go next to to have a structural engineer come in and do an inspection. But if it's a low rise building, wait for that. I I'd say the environmental is good to start with. Always get have your mechanical, electrical, and plumbing all inspected as well. Either bring in a firm to do it or get a local trade company that, you know, a local plumbing company or somebody local that can do an inspection for you to determine is the is there going to be an issue with the plumbing? Is there going to be an issue with the electrical? Do you have issues with the elevators? Do you like have those specific types of infrastructure things checked? Because those are the things that are always hidden on the surface that you don't know about. So you want to make sure that you've checked those out. And again, using the house reference, like it's a lot easier to see like a leaky pipe in a house. It's a lot harder to see a leaky pipe in a 150, 200 room hotel. Cause by the time you find out it's leaking, sometimes it's been leaking for a long time. So that's where like that whole inspectrum process and really making sure your due diligence from the beginning is really solid to make sure that when you actually go to the closing table, you know what you're about to spend to bring it up to adequate condition in its current state before you ever even put any additional money into do the actual renovation of the guest rooms and those types of all the decor, all the all the fun stuff. It's always this boring stuff that you have to check because that's the stuff that'll take you down faster than anything else. So past that, like you just really I feel like inspections are just like they're worth everything.

Michael Russell 42:06

You gotta do them. You gotta do them, spend the money, you gotta do them. And even the feasibility study, you said 14 grand, like that's that's a pain point to lay out the money. But like you said, I mean it's it's critical. The consequences of not doing that ahead of time can be much more painful. So hire the right people, hire the experts, align yourself with the right team, leverage their skill set, their role it's that there's been a ton of great takeaways from this episode, and I really enjoyed this. I want to stay in touch with you. I know that we were talking beforehand, you were just presenting at the AHOA, the Asian American Hotel Owners, whatever the acronym is, association. And you spoke there. Are are you planning on speaking at any other events this this upcoming or throughout the rest of the year?

Bryan Fish 42:52

So, right now, my next event is going to be IMN's Extended Stay Summit in May. I believe it's May 15th in Atlanta. So I'll be on a on a panel there talking. It's also about operating, it's about operating extended stay hotels, actually. So I'll be on that panel. And then more than likely, I don't think I'll be on anything in the summer, but I'll probably be on something this fall. But I'm always I'm active on social media, so I always post everything on LinkedIn, Instagram, and Facebook as well. But I love those opportunities because I get to share, give my feedback and my thought process a little different than some of my colleagues at other companies. And it's good to have those dialogues and then also to meet the people after that have come to hear what you have to say. So something usually resonates with someone in the room.

Michael Russell 43:38

No, that's great that you do that. And obviously, networking is key for anyone in this business, whether they're offering a service like you or they're looking to get involved in the game and investing. It's again network, network, network. If our listeners want to reach out to you about your your business or otherwise staying in touch with you online, social media, where can they do so?

Bryan Fish 43:56

Yeah, so on all the social media platforms, it's just at Brian Fish, Brian with a Y, and Fish like the one that swims, so B R Y N F Y S H. And then you can always email me at bfishereliance hospitality.com, but then give me a call to 602-805. I'm always here ready to help. So we love helping people figure out how to get to the next step of their projects. So, or to take their current asset and make it even better.

Michael Russell 44:22

Heck yeah. Thanks so much. Right on. So we are Mike and Nate. He is Brian Fish. And this is another episode of the Hotel Investor Playbook. And we will catch you again next week. Aloha. Thanks for hanging out with us today on the Hotel Investor Playbook. If you got even one good nugget of wisdom about hotel investing, do us a favor, hit that subscribe button and leave us a five-star review. And hey, if you're feeling extra generous, drop a quick line in the review section. Something like Mike and Nate are the go-to hotel investing guys, or best podcast for anyone looking to crush it in hospitality. Or, you know, whatever feels right. Those little shout-outs go a long way in helping more people find the show. And they pretty much make our day. All right, appreciate you guys. Catch you next time.