Dec. 30, 2025

Stop Treating Your Front Desk Like An Expense. It's A Profit Center | Geoffrey Toffetti E64

Stop Treating Your Front Desk Like An Expense. It's A Profit Center | Geoffrey Toffetti E64

Stop treating your front desk like an expense; it's costing you hundreds of thousands in property value. The biggest mistake boutique hotel owners make isn't about the property itself. It's ignoring the untapped revenue sitting right at your check-in counter. In this episode, you'll discover how to turn your front desk into a profit center that can add 5% to your bottom line and potentially $500,000 to your hotel's valuation. A hospitality revenue expert who helped pioneer the car rental upse...

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Stop treating your front desk like an expense; it's costing you hundreds of thousands in property value. The biggest mistake boutique hotel owners make isn't about the property itself. It's ignoring the untapped revenue sitting right at your check-in counter.

In this episode, you'll discover how to turn your front desk into a profit center that can add 5% to your bottom line and potentially $500,000 to your hotel's valuation.

A hospitality revenue expert who helped pioneer the car rental upsell model and has spent 25+ years turning frontline employees into sales engines joins us to break down the exact system. Joffrey Toffetti's company, Frontline Performance Group, works with properties from 20-room boutiques to major brands, and his approach has transformed front desk agents from minimum-wage employees into top earners making $50K+ through incentives alone.

In this episode, you'll discover:

  • Why the "value mode vs. experience mode" mindset shift changes everything about guest interactions
  • The 3-tier incentive structure that motivates front desk staff without blowing your budget
  • How late checkout offers alone can generate $40,000+ annually (with almost zero cost)
  • The conversion metrics and "URI" formula to track whether your upselling is actually working
  • Why keyless entry and kiosks might be sabotaging your guest relationships and revenue
  • How to spot upsell opportunities during due diligence before you even buy a property

If you're serious about maximizing hotel profitability, this episode will change how you think about staffing and guest experience. Don't leave five figures on the table every year because your front desk doesn't know how to sell.

About Geoffrey

Geoffrey Toffetti is the CEO of Frontline Performance Group (FPG), where he leverages over three decades of experience to transform hospitality frontline teams into powerful revenue generators. Rising from a resort valet to the C-suite, Geoffrey has guided FPG’s expansion to over 2,500 properties across 100+ countries, helping global brands like Hilton, Marriott, and Hyatt unlock over $2.3 billion in incremental revenue. Through FPG’s innovative IN-Gauge SaaS platform and a "service-based sales" philosophy, he empowers hourly staff to elevate the guest experience while driving significant bottom-line profitability without additional capital expenditure.

Connect with Geoffrey

Connect with Geoffrey on LinkedIn or visit their Website.

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Email Us at info@hotelinvestorplaybook.com

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WEBVTT

00:00:00.000 --> 00:00:06.400
What if your front desk is costing you a half a million dollars in property value and you don't even know it?

00:00:06.639 --> 00:00:10.560
Most hotel owners treat their front desk like an expense to minimize.

00:00:10.720 --> 00:00:17.280
But today's guest has spent decades proving it's actually your most underutilized profit center.

00:00:17.440 --> 00:00:22.480
If you're not converting check-ins into upgrades, you're leaving serious money on the table.

00:00:22.640 --> 00:00:23.920
Let's dive in.

00:00:26.800 --> 00:00:34.640
The Hotel Investor Playbook, your guide to building wealth and freedom through hotel and hospitality ownership.

00:01:06.159 --> 00:01:07.680
Joffrey, welcome to the show.

00:01:08.239 --> 00:01:08.959
Thank you, Michael.

00:01:09.040 --> 00:01:10.079
It's a pleasure to be here.

00:01:10.480 --> 00:01:10.719
Yeah.

00:01:10.879 --> 00:01:22.879
So listen, I want to start right out of the gate with a quote that I believe is from you, which is I've heard you say stop treating your front desk like an expense.

00:01:23.040 --> 00:01:24.400
It's a profit center.

00:01:24.640 --> 00:01:26.079
What do you mean by that?

00:01:26.400 --> 00:01:26.719
Yeah.

00:01:26.879 --> 00:01:49.680
So this is probably the core of our whole mission in life is convincing business owners and managers of this fact that your front line, particularly a front desk at a hotel, they are in the position to promote your product probably better than any other position in the in this in the chain in the customer journey because they're standing there with them.

00:01:49.920 --> 00:01:52.799
And the best way to influence someone is to be in their presence.

00:01:52.959 --> 00:02:02.319
So if they know that that if if that potential is understood and you teach them how to do it, they can generate a very significant amount of money relative to your operation.

00:02:02.480 --> 00:02:10.319
In some cases, it's the equivalent of opening a restaurant, or it's the equivalent of adding a whole new amenity to your property that you're charging for.

00:02:10.479 --> 00:02:17.120
It can be one to in a boutique hotel, you realistically, two to three percent RevPAR is very achievable.

00:02:17.439 --> 00:02:18.159
That's a good amount.

00:02:18.240 --> 00:02:18.719
That's great.

00:02:18.879 --> 00:02:19.680
That's really a good amount.

00:02:19.759 --> 00:02:19.919
Yeah.

00:02:20.080 --> 00:02:26.400
I can add 5% to your bottom line just by having them do what they're doing anyway, which is interact with your guests.

00:02:26.479 --> 00:02:27.840
You don't need any more guests.

00:02:28.000 --> 00:02:30.960
You just need the guests to spend a little bit more money and have a better experience.

00:02:31.120 --> 00:02:32.400
That's that's really what it's all about.

00:02:32.560 --> 00:02:43.280
A lot of our hotel, especially the smaller or the sort of the mid-scale properties we work with, the difference between making your budget and missing your budget is often in the five digits.

00:02:43.360 --> 00:02:44.800
It could be 30,000, 40,000.

00:02:45.120 --> 00:02:47.520
And this is a way to shore up your budget.

00:02:47.599 --> 00:02:55.599
But if you're the owner, that five percent is more capex you can spend, it's more people you could hire, it's whatever you're up against running your business.

00:02:55.680 --> 00:02:56.240
It's just there.

00:02:56.400 --> 00:03:00.000
The main issue is the money is there, you're just not capturing it.

00:03:00.240 --> 00:03:12.960
But look, I mean, if you're just taking eight eight cap, let's just say it's an eight-cap hotel and you increase the bottom line by 40 grand, 40 grand divided by 8%, that increases the valuation by a half a million dollars.

00:03:13.199 --> 00:03:13.520
Exactly.

00:03:13.680 --> 00:03:14.479
That's incredible.

00:03:14.639 --> 00:03:15.599
It is incredible, right?

00:03:15.759 --> 00:03:17.520
And it's and it's there, it's already there.

00:03:17.599 --> 00:03:19.759
You don't have to spend many money to get it.

00:03:20.240 --> 00:03:28.719
Okay, so let's dive into this then because we're talking about how the front desk can be a revenue profit generator.

00:03:28.960 --> 00:03:32.400
Can you give me some examples of how they can generate extra revenue?

00:03:32.719 --> 00:03:33.199
100%.

00:03:33.599 --> 00:03:50.719
So the easiest to conceptualize a better room, I mean, everyone kind of understands that if you've if someone's gone on your website and they've booked an entry-level room, even if you only have two room types, or you have the same room type but with different views, they've bought the cheapest room online because that's what you do when you're shopping for hotels.

00:03:50.879 --> 00:03:55.199
But when you arrive, you're now in experience mode, you're not in value mode.

00:03:55.280 --> 00:04:02.240
So you walk in, you're greeted, the person knows you're in the basic room, they offer or recommend to you a better room.

00:04:02.400 --> 00:04:06.400
That's the easiest thing to conceptualize, but it's not the only thing.

00:04:06.639 --> 00:04:14.080
Another really popular one that a lot of hoteliers do not do is when someone is arriving, ask when they're departing.

00:04:14.319 --> 00:04:18.319
And if they're departing later in the day, offer them a late checkout.

00:04:18.480 --> 00:04:27.040
Because as a business traveler, I could tell you a lot of times my flight's at four o'clock, my meeting's over at 12:30, and I'm facing the airport lounge for the next two and a half hours.

00:04:27.199 --> 00:04:32.319
Where if they ask me when I check in what time is your flight at four, well, let's get you a late checkout.

00:04:32.399 --> 00:04:37.279
You can leave your bags here after your meeting and come back and freshen up before you go to the airport.

00:04:37.600 --> 00:04:40.480
Okay, so that's that doesn't sound like I've sold you something.

00:04:40.560 --> 00:04:42.399
It sounds like I'm doing you a favor.

00:04:43.199 --> 00:04:43.680
Of course.

00:04:43.839 --> 00:04:47.360
But what you're you're suggesting is, oh, look, there's a cost for this, right?

00:04:47.680 --> 00:04:51.360
And so I'm gonna pretend I'm I'm the front desk person.

00:04:51.600 --> 00:04:59.600
And I my my role up until this point that you've introduced this concept is to do whatever I need to do just to keep my job, right?

00:04:59.680 --> 00:05:03.040
I don't I don't necessarily have any incentive to want to do more than that.

00:05:03.199 --> 00:05:09.199
So if I'm gonna have to try to quote unquote sell someone on something, then that seems painful and fearful.

00:05:09.279 --> 00:05:15.600
And so, what is the incentive for someone working at the front desk to actually want to implement these upgrades?

00:05:15.920 --> 00:05:21.839
Yeah, well, it's it's there's that could be a deep philosophical question, or that could be a very surface-y tactical question.

00:05:22.000 --> 00:05:25.199
So the tactical answer is give them an incentive to do it.

00:05:25.279 --> 00:05:29.360
So if your late checkout is 25 bucks, you you know, you give them 10% of that.

00:05:29.439 --> 00:05:33.040
They're gonna make$250 every time they sell one, and you're gonna make$22.50.

00:05:33.279 --> 00:05:39.040
And you can probably sell three to five a day, depending on the size of your hotel and what your turn is and your occupancy.

00:05:39.120 --> 00:05:40.399
But let's say it's five a day.

00:05:40.560 --> 00:05:46.399
It's$125 a day, seven days a week, 52 weeks, you can do the math.

00:05:46.480 --> 00:05:50.079
Just on the late checkout, you could probably make that 40 grand that we were talking about.

00:05:50.240 --> 00:05:52.000
So it's just giving them an incentive.

00:05:52.160 --> 00:05:55.600
Now, the deeper philosophical question is why are they there?

00:05:55.759 --> 00:05:59.439
Are they there just for a paycheck or do they actually care about helping people?

00:05:59.600 --> 00:06:06.959
Because that's another thing, is once they realize that offering people something like a late check, like, for instance, go back to the late checkout example.

00:06:07.040 --> 00:06:12.160
A front desk agent probably doesn't get on a plane every week and have to deal with all of this stuff all the time.

00:06:12.399 --> 00:06:22.800
If they understood how painful it is to sit in the airport for two and a half hours after you're in a meeting, you're still in your suit, you, you know, you want to be in jeans and a t-shirt, they would understand what a service they're offering.

00:06:22.959 --> 00:06:30.800
You can come back, you don't have to lug your bag to the meeting, you can come back, you can change your clothes, you can take a shower, you can go to the airport relaxed.

00:06:30.959 --> 00:06:32.079
That's worth$25.

00:06:32.399 --> 00:06:35.040
That's worth$50 to a business traveler, right?

00:06:35.199 --> 00:06:36.399
And the same goes for families.

00:06:36.480 --> 00:06:46.240
If you have families coming in for a sporting event and the sporting event is in the morning and they're driving five hours home, you give them a late checkout, they can come back and take a shower, relax for a few minutes before they hit the road.

00:06:46.399 --> 00:06:48.800
There's it's a it is a service value.

00:06:48.879 --> 00:06:58.160
So there's both of those things, is you want to make it important to them because it's important to you as the owner or the manager, and you want to give them an incentive for doing it.

00:06:58.480 --> 00:06:58.800
Yeah.

00:06:58.959 --> 00:07:01.439
So look, I'm reframing my mindset about this.

00:07:01.519 --> 00:07:02.160
Thank you for that.

00:07:02.399 --> 00:07:12.399
But what I'm taking away is you're framing this to the hotel staff that by not offering them this upgrade, you're you're really kind of doing them a disservice.

00:07:12.639 --> 00:07:18.160
They need this, they could benefit from this, or you know, at least give them the opportunity if they weren't aware of it.

00:07:18.319 --> 00:07:24.800
And this is gonna this, if you look at it from like, oh, I'm trying to extract more money from them, that can be culturally, that's that's icky.

00:07:24.879 --> 00:07:34.800
But if it's like, hey, I'm trying to offer the very best value, the very, very best service, and this is one way in which we can do that, that's just a mindset, change your frame of mind.

00:07:34.879 --> 00:07:36.319
And I really like that.

00:07:36.639 --> 00:07:37.120
100%.

00:07:37.439 --> 00:07:44.720
We have a phrase we use that goes the best service you can offer your guest is to offer your best services, right?

00:07:44.959 --> 00:07:52.560
So if people don't know what rooms you have, they don't know what views you have, unless they're a regular at your property, they don't know.

00:07:52.639 --> 00:07:54.079
They can only see the picture online.

00:07:54.240 --> 00:08:06.560
And like one of our executives likes to say to the clients, if you could take a guest and tour the entire property with them when they arrive painstakingly and show them every view in the room, would they have booked the same room?

00:08:06.800 --> 00:08:08.240
The answer often is no.

00:08:08.399 --> 00:08:15.600
They would have booked the one on the corner because you can see the lake or the one that you can see the airports, the airplanes landing, or whatever the circumstance for that hotel is.

00:08:15.759 --> 00:08:19.680
Getting your front desk agents to understand that they are experts on the property.

00:08:19.839 --> 00:08:21.920
They know better what someone's gonna like.

00:08:22.000 --> 00:08:29.839
And if they're checked into a room that the front desk agent intrinsically knows is not one that everyone would book, then recommend another room.

00:08:30.160 --> 00:08:32.639
You're only charging them a fraction of the room night.

00:08:32.799 --> 00:08:34.480
You're improving their entire experience.

00:08:34.639 --> 00:08:37.279
And to your point, the ones that don't take it.

00:08:37.360 --> 00:08:43.840
Now, this is a stat that we got from a major brand that studied this, because they have a lot of the same questions as independent hotel years.

00:08:44.480 --> 00:08:53.759
They had a reduction in room-related complaints the more frequently the upsell was offered because you had a choice.

00:08:54.000 --> 00:09:05.279
So you checked in, they said you're in a great double room, it's beautiful, but I have a lakefront view, whatever, and you say no, and you go and you have no view, you're less likely to complain because you've been given the option.

00:09:05.440 --> 00:09:09.919
And just having that option and doing it in a way that is not salesy.

00:09:10.000 --> 00:09:12.320
We don't want to say, Do you want a better room?

00:09:12.480 --> 00:09:14.720
Because that implies that your room's not good, right?

00:09:14.879 --> 00:09:19.679
You just say, I have a room with a view available, people like it because of XYZ.

00:09:20.000 --> 00:09:25.519
You don't ask them a question, you make a statement, you make a recommendation, and then you it's easy.

00:09:25.600 --> 00:09:27.200
You can predict how they're gonna respond.

00:09:27.600 --> 00:09:30.799
There's only four or five ways someone's gonna respond when you make a statement like that.

00:09:30.960 --> 00:09:32.559
And and you can teach them, it's very simple.

00:09:32.720 --> 00:09:33.360
This is what we do.

00:09:33.440 --> 00:09:37.200
We teach them exactly how what to expect and how to answer each response.

00:09:37.279 --> 00:09:38.000
And it's easy.

00:09:38.480 --> 00:09:43.919
It makes it easier to be a front desk agent because you're having a conversation with someone and it flows very naturally.

00:09:44.159 --> 00:09:53.840
Hey guys, quick favor if this episode is helping you, text it to one friend who is either trying to buy a hotel or owns and operates one already.

00:09:54.080 --> 00:09:57.759
Sharing the show is the best way you can support what we're building here.

00:09:57.919 --> 00:09:59.519
Now, back to the episode.

00:09:59.840 --> 00:10:03.200
Take me back to what you said early on in this conversation.

00:10:03.440 --> 00:10:08.080
You led with something about when they walk into the hotel, they're not in a value state.

00:10:08.159 --> 00:10:09.840
They're in a, I think you said emotional state.

00:10:10.159 --> 00:10:10.720
What did you say?

00:10:10.879 --> 00:10:11.600
Experience state.

00:10:11.679 --> 00:10:12.799
Can you like walk us through that?

00:10:12.879 --> 00:10:16.960
Like, what's when you're transferring this to your to your staff to encourage them?

00:10:17.120 --> 00:10:20.000
Kind of what we're describing, walk walk us through that statement.

00:10:20.320 --> 00:10:20.559
Yeah.

00:10:20.639 --> 00:10:26.799
So when someone is shopping for a hotel room or a car rental, they're looking for the best value.

00:10:27.039 --> 00:10:30.399
They're not necessarily looking for the cheapest, but they're looking for the best value.

00:10:30.480 --> 00:10:33.200
So they might end up with a double room or whatever.

00:10:33.360 --> 00:10:41.840
But when they are when that's done and they've made the booking and now they're traveling, even for business, there's an anticipation when they're en route to the hotel.

00:10:42.240 --> 00:10:45.200
Hotel is probably the best part of the trip, other than a really good dinner.

00:10:45.360 --> 00:10:48.399
Your hotel experience makes or breaks a vacation in a lot of cases.

00:10:48.480 --> 00:10:51.279
And it's not necessarily the aesthetic, it's the whole experience.

00:10:51.440 --> 00:10:54.639
But when you get there, you're now experiencing the hotel.

00:10:54.720 --> 00:10:57.759
You're not looking for the value, you're looking for the best experience.

00:10:58.000 --> 00:11:04.000
And certainly a great front desk agent that greets you warmly and is friendly and outgoing helps improve that experience dramatically.

00:11:04.080 --> 00:11:06.399
And I say this as a former front desk agent.

00:11:06.559 --> 00:11:15.759
You can make or break someone's entire impression of your property in 10 seconds with the front desk, because that that might be the only person that that guest ever speaks to in your entire company.

00:11:15.919 --> 00:11:21.919
It could just be the front desk agent because some people go right to the room, they go to the meeting, they come back, they sleep, they don't talk to people.

00:11:22.080 --> 00:11:25.360
The only person they're guaranteed they're going to talk to is the front desk agent.

00:11:25.600 --> 00:11:30.240
But they're in experiential mode, and that front desk agent can enhance that experience.

00:11:30.559 --> 00:11:44.720
You know, what you're saying here, though, I'm picking up on is this runs very contrary to what a lot of the mentality is these days with running hotels more efficiently.

00:11:44.960 --> 00:11:55.279
So the idea is look, if you have self-check-in kiosks and you have, in some cases, you have keyless entry, you just you don't even check in with the front desk.

00:11:55.440 --> 00:12:01.519
A lot of these smaller outfits, smaller boutique hotels, they won't staff a front desk because they're saving on labor.

00:12:01.679 --> 00:12:06.320
That again goes back to the first quote here, which is treating the front desk as an expense.

00:12:06.480 --> 00:12:20.639
But you're describing this as this is like your profit center is having a guide who is going to guide their experience and not only generate a better experience for the guests, but also generate more profit, very different than that model.

00:12:20.799 --> 00:12:23.840
How do you kind of reconcile those two paths?

00:12:24.000 --> 00:12:31.519
Like one could make the case that the self-check-in model, zero front desk, is a better option for ultimately the bottom line.

00:12:31.679 --> 00:12:33.840
You're describing something dramatically different.

00:12:34.080 --> 00:12:38.159
Yeah, you can imagine I get this question fairly frequently.

00:12:38.240 --> 00:12:41.120
Even from I thought I was his first genius that asked it, right?

00:12:41.360 --> 00:12:41.440
Yeah.

00:12:41.759 --> 00:12:45.919
Well, when the keyless entry thing came out, everyone was like, oh my God, they're going to put you guys out of business.

00:12:46.000 --> 00:12:58.799
We we got bigger because it just took so the bottom line is this with keyless entry, the only people that use it are frequent travelers, what we call road warriors, and they're probably the least likely to buy an experiential upgrade because they're traveling all the time.

00:12:58.879 --> 00:13:04.480
So all it did was take them out of the lobby and made it easier to get a high conversion out of your arrivals.

00:13:04.639 --> 00:13:05.840
So that didn't pan out.

00:13:05.919 --> 00:13:10.559
And actually, pound for pound, there's less people using it as a percentage of arrivals than did 10 years ago.

00:13:10.639 --> 00:13:13.039
So it's kind of it's actually stalled out.

00:13:13.200 --> 00:13:32.000
Now on the kiosk thing, if you have a cookie cutter, little box, mid-scale or economy hotel in the inner city, by all means, you're not going to sell anything anyway, probably when you're selling rooms at 60, 70 bucks a night, whatever.

00:13:32.080 --> 00:13:34.240
That's we're not that's not the target for this.

00:13:34.480 --> 00:13:45.919
But if you have a boutique hotel with a unique character and it only has 30 or 40 or 50 rooms, you're crazy not to have a front desk agent because you're basically surrendering your relationship with your guest.

00:13:46.080 --> 00:13:49.440
You're saying, I don't want to know or talk to my guests.

00:13:49.679 --> 00:13:51.200
I have this great aesthetic.

00:13:51.279 --> 00:13:58.559
I built this nice boutique, I put a lot of time into the design, but I don't want to talk to my guests because it's going to cost me 10 bucks an hour or 15 bucks an hour.

00:13:58.720 --> 00:14:08.080
That seems crazy to me because, like I said, their whole experience of your service, quote unquote service, could be the front desk agent.

00:14:08.159 --> 00:14:14.480
If you forego that and it's a kiosk that sometimes doesn't work and it's annoying, what have you just done?

00:14:14.559 --> 00:14:17.519
You've basically surrendered your entire brand to a kiosk.

00:14:17.840 --> 00:14:27.360
So that I feel pretty strongly that you should always have a front desk agent because the right one will make you more money, will increase your guest loyalty, but they'll promote your products.

00:14:27.600 --> 00:14:37.840
When you have a front desk that knows how to sell, it's almost like a there's a switch point where once they get it and they're it's you're let's say they're earning enough money to pay their car payment off of their incentives.

00:14:38.000 --> 00:14:38.240
Okay.

00:14:38.320 --> 00:14:41.919
It's it's crossed the line to improve the quality of their life.

00:14:42.080 --> 00:14:44.399
They're gonna be asking for more to sell.

00:14:44.720 --> 00:14:58.960
And if you're a hotelier and you're like short on breakfast service, or you need to sell more stuff in the gift shop, or you need to whatever, you're now gonna have someone you can go to and say, Hey, I need to sell five more breakfasts every day.

00:14:59.120 --> 00:15:01.440
I'll give you two bucks per table or whatever.

00:15:01.600 --> 00:15:02.320
They're gonna sell it.

00:15:02.879 --> 00:15:06.159
It's they're now a sales engine, even if it's a sales engine of one.

00:15:06.399 --> 00:15:14.480
When I was a front desk agent, I went from being a valet to the front desk, and the GM said to me at the time, this valet at this resort were doing pretty good.

00:15:14.559 --> 00:15:15.679
This is back in the late 90s.

00:15:15.759 --> 00:15:16.879
I was making like 50 grand a year.

00:15:16.960 --> 00:15:17.679
I said that late.

00:15:17.840 --> 00:15:20.399
And he said, I'm gonna pay you half of that, right?

00:15:20.639 --> 00:15:24.799
But you you have a chance to make more money selling upgrades and walk-ins.

00:15:24.960 --> 00:15:28.240
I made more doing that than I made than they were paying me.

00:15:28.399 --> 00:15:32.960
So much so they promoted me because I was outside the pay scale of a front desk agent.

00:15:33.039 --> 00:15:34.799
I was making like 50 grand a year back then.

00:15:34.879 --> 00:15:36.240
That's a front desk agent.

00:15:36.720 --> 00:15:41.200
Because once they said, Oh, you can get paid for selling, I sold everything to everyone.

00:15:41.279 --> 00:15:44.879
Like I was constantly selling, and I wasn't even trained the way we train.

00:15:45.200 --> 00:15:48.240
Our training is much more service focused than I was doing.

00:15:48.320 --> 00:15:51.200
I was like, oh, you're coming from England for two weeks on a voucher.

00:15:51.279 --> 00:15:52.559
Back then it was called a voucher.

00:15:52.639 --> 00:15:56.320
I'm gonna sell you a suite for two weeks and I'm gonna double your reservation costs.

00:15:56.480 --> 00:16:06.480
But yeah, I mean, it's it's you shouldn't forego front desk agents unless you're in one of those situations where there's really nothing to sell and your clientele are not the type that will buy it.

00:16:06.799 --> 00:16:09.519
Yeah, I mean, there's okay, so let's go back.

00:16:09.679 --> 00:16:11.360
You breeze through this.

00:16:11.679 --> 00:16:13.120
The bottom line for the hotel.

00:16:13.200 --> 00:16:17.840
I mean, reasonably you might be able to expect an extra 5% lift to your bottom line.

00:16:18.000 --> 00:16:25.360
But what was the rough commission structure for front desk people that are providing these upgrades or selling these upgrades?

00:16:25.759 --> 00:16:28.080
We prefer a three-tier incentive.

00:16:28.240 --> 00:16:34.879
So you set three tiers of revenue expectation, and for each tier, it's a higher percentage that applies to everything.

00:16:35.039 --> 00:16:36.960
So, for instance, let's just make this simple.

00:16:37.039 --> 00:16:42.080
Let's say that you're gonna set a$500 goal for each front desk agent per month, which is very low.

00:16:42.159 --> 00:16:43.600
But let's just say this we're gonna do so.

00:16:43.679 --> 00:16:51.360
The first tier from 500 to 1200 might be 5%, from$1,200 to 2,000 would be 10, and over 2,000 would be 15.

00:16:51.600 --> 00:17:01.200
So if you're if you're getting someone who's selling at over$2,000, four times your target, you're rewarding them more than someone who's just selling a little bit.

00:17:01.360 --> 00:17:07.920
And what we find is that balances out, if you put that, if you plot that on a curve, it should land at about 10% on average.

00:17:08.079 --> 00:17:11.039
But let's say you have three front desk agents, you'd have one in each bucket.

00:17:11.119 --> 00:17:12.079
That would get you 10%.

00:17:12.559 --> 00:17:16.640
And that's about how you want it to be a third, a third, a third, to be a healthy incentive plan.

00:17:16.799 --> 00:17:20.799
And the people that are consistently at the bottom, they're the ones getting remedial training.

00:17:20.880 --> 00:17:25.359
And eventually, as a business owner, you make a decision about whether they're the right fit for you or not.

00:17:25.680 --> 00:17:28.240
And then every once in a while you raise the tiers.

00:17:28.480 --> 00:17:39.440
You just make it a little harder each, every six or eight months, and you get to a point where we, I mean, we go into hotels where they're doing like 1,500 a month and upsell, and we get them up to 50,000 a month.

00:17:39.519 --> 00:17:40.960
And they're not huge hotels.

00:17:41.039 --> 00:17:44.319
They're, you know, maybe 150 rooms, but they're doing it all right.

00:17:44.640 --> 00:17:45.759
That can be done.

00:17:46.000 --> 00:17:50.640
We've seen 10% conversions, we've seen six, seven percent RevPAR impact.

00:17:50.880 --> 00:17:58.880
Well, let's dig into this a little bit because like I know that your company, it's a large company, and and you guys cater towards some of the bigger enterprise level hotels.

00:17:59.039 --> 00:18:15.119
But in today's age, what the scrappy boutique hotel investor is looking to do is use technology to be competitive, to be able to be nimble and to implement things, try things out without having the huge bureaucracy that a large enterprise hotel system has.

00:18:15.599 --> 00:18:18.799
Boutique operators like myself, we can just try something.

00:18:18.960 --> 00:18:19.920
If it works, great.

00:18:20.000 --> 00:18:22.160
If it doesn't, it fails, then we move on.

00:18:22.319 --> 00:18:32.559
Does your system, does this product, is this this technology, because there's a systematic approach here, and we can dive into that, but is this realistically applicable for smaller operators?

00:18:32.880 --> 00:18:33.839
Yeah, 100%.

00:18:34.160 --> 00:18:37.519
I mean, we have hotels that are 20 rooms that are on our program.

00:18:37.759 --> 00:18:42.000
We have uh several hundred independent slash boutique style hotels.

00:18:42.079 --> 00:18:49.279
And then we also have a bunch of the stuff that are in the big brands that are in their independent brands like Curio or or Autograph and those.

00:18:49.440 --> 00:18:54.319
So yeah, it it the size doesn't really matter because we are we charge by room.

00:18:54.400 --> 00:18:57.200
So it doesn't, if you're big, you're paying more than if you're little.

00:18:57.359 --> 00:19:02.559
But it really just comes down to your own belief in your own product.

00:19:02.799 --> 00:19:10.160
And this is where we run into like limiting belief sometimes, is we have GMs that they don't believe that there's anything to sell at their hotel.

00:19:10.240 --> 00:19:14.559
The owners do, because they're the ones who renovated the suites, but the GM doesn't see the value in it.

00:19:14.640 --> 00:19:15.920
So you have this disconnect.

00:19:16.079 --> 00:19:24.400
But if you're the owner and you believe in your product and you believe that you want to better serve your customers, then there's always stuff to sell.

00:19:24.559 --> 00:19:32.000
And if you're selling things like late checkouts or room upgrades or view enhancements, they're very low cost differential.

00:19:32.319 --> 00:19:39.759
I mean, cleaning the same room with a different view doesn't cost you anything more, but you can make, you know, you can add 25, 30% to the room rate.

00:19:40.000 --> 00:19:47.359
It's just a matter of making it a systematic part of what you do is that you expect your front desk to upsell.

00:19:47.440 --> 00:19:53.039
And if they don't know how to upsell, you hire us and we're pretty cheap and we come in and we give you all the tools you need.

00:19:53.279 --> 00:19:53.440
Yeah.

00:19:53.519 --> 00:19:59.759
I mean, I'm thinking about this and associating like on the far end of the spectrum when it comes to, I guess, price point, right?

00:20:00.160 --> 00:20:02.319
I own and operate two hostels.

00:20:02.480 --> 00:20:08.079
And hostels are known to be budget, the stigma being backpackers and whatever.

00:20:08.160 --> 00:20:09.680
But our product has evolved.

00:20:09.839 --> 00:20:11.599
We offer a very design-forward product.

00:20:11.680 --> 00:20:15.119
It's really geared towards what you're describing, the experience.

00:20:15.359 --> 00:20:19.279
People stay with us not always because it's the cheapest place to stay.

00:20:19.440 --> 00:20:20.079
Let's be honest.

00:20:20.240 --> 00:20:27.200
People can find Airbnbs if they're in a group and they can save money if they just go in on the same condo or whatever they're going to book together.

00:20:27.359 --> 00:20:32.160
The per bed cost, if you had four or five people, is going to be higher than compared to alternative lodging.

00:20:32.240 --> 00:20:34.720
But the reason they stay with us is because we offer this experience.

00:20:34.880 --> 00:20:36.400
We can't operate with a kiosk.

00:20:36.480 --> 00:20:37.599
There's no way in heck.

00:20:37.680 --> 00:20:43.359
Because if someone walked into our lobby and they're punching things, like just it's not even in the realm.

00:20:43.519 --> 00:20:51.519
We have to have people at the front desk because we create culture, we create experience, we create these moments that people treasure because it's all about bringing people together to be social.

00:20:51.680 --> 00:20:54.720
That is the product that we offer from a price point.

00:20:54.799 --> 00:20:56.000
It's at a very low cost.

00:20:56.079 --> 00:21:02.480
But I'm thinking through, okay, well, even at our far end of the spectrum, hostels, where can we upgrade people?

00:21:02.640 --> 00:21:04.240
And there's plenty of opportunity.

00:21:04.319 --> 00:21:07.440
As you're talking, I'm thinking about it, for example, activities.

00:21:07.680 --> 00:21:14.160
We offer now paid activities where, you know, we take people in a as a group in a van and they go sightseeing, right?

00:21:14.240 --> 00:21:18.640
We take them to the best waterfalls and hiking and all the fun things that people can do.

00:21:18.960 --> 00:21:20.960
But we charge for that.

00:21:21.039 --> 00:21:24.640
And if someone just walks in, the front desk says, Oh, look, we got an activity day.

00:21:24.720 --> 00:21:25.519
Do you want to sign up for it?

00:21:25.680 --> 00:21:26.240
Okay, boring.

00:21:26.319 --> 00:21:26.960
They're not going to sign up.

00:21:27.039 --> 00:21:29.200
But if it's like, oh my gosh, you're going to go street spots.

00:21:31.359 --> 00:21:32.319
There you go.

00:21:32.640 --> 00:21:36.160
And this adds up over time, like this scales.

00:21:36.240 --> 00:21:37.440
And so I'm intrigued.

00:21:37.519 --> 00:21:38.000
I'm excited.

00:21:38.079 --> 00:21:41.279
I'm jumping out of my chair here because I never even thought about this.

00:21:41.359 --> 00:21:42.000
This is so novel.

00:21:42.079 --> 00:21:44.079
Like you live in this world day in, day out.

00:21:44.240 --> 00:21:44.880
This is what you do.

00:21:44.960 --> 00:21:47.440
But I've never heard of someone monetizing the front desk.

00:21:47.599 --> 00:21:50.799
It's always been how do I cut expense, cut expense, cut expense?

00:21:50.960 --> 00:21:55.119
But it's such a paradigm and thought to think, forget cutting expense.

00:21:55.200 --> 00:22:02.240
How do you maximize experience and profit from it, not just as a hotel owner, but your team because there's turnover.

00:22:02.480 --> 00:22:04.720
If people can earn more money, they're less likely to quit.

00:22:04.880 --> 00:22:10.880
Beyond just turnover, there's you mentioned it, but you saw that there were less negative reviews.

00:22:11.039 --> 00:22:12.880
I think you said when people get upgraded.

00:22:13.200 --> 00:22:14.640
It's room default reviews.

00:22:14.720 --> 00:22:15.200
Yep.

00:22:15.759 --> 00:22:16.079
Yep.

00:22:16.240 --> 00:22:27.599
If you've got a front desk staff who is engaged and happy and incentivized and motivated to provide that level of service, people are going to overlook a lot of imperfections.

00:22:27.839 --> 00:22:34.000
They're going to overlook some of the challenges that inevitably happen when you're dealing with hospitality.

00:22:34.160 --> 00:22:37.759
And that will affect areas that you don't always necessarily associate.

00:22:37.839 --> 00:22:43.839
Like your review score is going to give you the ability to probably stay more occupied.

00:22:43.920 --> 00:22:46.240
And if you're more occupied, you can charge more ADR.

00:22:46.400 --> 00:22:48.079
All of these things are interrelated.

00:22:48.160 --> 00:22:54.720
So, you know, I'm connecting the dots here, and maybe I've had too much caffeine, but I am pumped on this because this is this is a novel concept.

00:22:54.799 --> 00:22:56.799
So here's what I want to know this is great.

00:22:56.960 --> 00:22:58.880
I've got staff, I want to incentivize them.

00:22:58.960 --> 00:23:00.720
And then I go, oh, process.

00:23:00.880 --> 00:23:10.240
How the heck do I implement a process as a small operator with limited resources to where I can actually plug and play and this thing works?

00:23:11.039 --> 00:23:13.839
Yeah, that I mean, that probably thank you for that.

00:23:13.920 --> 00:23:15.039
It's a nice softball.

00:23:15.279 --> 00:23:20.880
But that that's essentially why we exist is what we're teaching is not rocket science.

00:23:20.960 --> 00:23:26.640
I mean, another catchphrase we like because it works is turning common sense into commonplace.

00:23:26.880 --> 00:23:31.119
It's getting people to do simple things in repetition that benefit your business.

00:23:31.200 --> 00:23:32.799
That's essentially why we exist.

00:23:33.119 --> 00:23:42.559
So the subscription that our customers get, our technology, is basically the entire toolkit, soup to nuts, that you need to have a successful upsell program.

00:23:42.720 --> 00:23:48.880
It's everything from we consume the data from the PMS system or the point of sale system because we also work in restaurants.

00:23:48.960 --> 00:23:51.279
We haven't talked about that, but we work in restaurants as well.

00:23:51.440 --> 00:24:03.759
But we consume the data, we visualize it, we give the employees an app where they can see what they're doing, they can see their own performance, they can track their incentives, you can set goals that they can see how they're doing.

00:24:12.640 --> 00:24:15.119
They can view it through their app or on a computer.

00:24:15.279 --> 00:24:17.039
Uh, it provides an audit trail.

00:24:17.119 --> 00:24:22.960
So if your accountant or whoever you send your payroll files to, you know that that every transaction is correct.

00:24:23.119 --> 00:24:30.720
It will output an incentive file that you can then give to your payroll person and say, pay these incentives that you don't have to track it yourself.

00:24:30.960 --> 00:24:32.720
So it's basically everything that you need.

00:24:32.799 --> 00:24:34.240
It's even a recognition engine.

00:24:34.319 --> 00:24:39.519
So you can actually give people like thumbs up and give them comments on their performance directly through the application.

00:24:39.599 --> 00:24:52.240
So if you're someone like yourself that is a multi-unit operator, you could spend five minutes a week and go in there and give thanks and praise to people who are doing a good job directly through the app about what they're selling.

00:24:52.319 --> 00:24:56.880
So you're right, you're you're reinforcing that behavior, and you don't even have to be there.

00:24:56.960 --> 00:24:57.920
You can do it from afar.

00:24:58.079 --> 00:25:11.519
I say this all the time: you can affect revenue from afar just by picking up your phone in the morning, going to the top of the leaderboard, clicking a thumbs up and putting a message in thanks for being best this month, keep it up, send that person, and we've studied this.

00:25:11.680 --> 00:25:17.519
That person is going to get a juice in their performance for like six days after getting a comment like that.

00:25:17.920 --> 00:25:22.160
So the system is just engineered, and and it might, it might help to give a little context.

00:25:22.400 --> 00:25:33.119
Before COVID, we were an on-prem consulting firm that would send people to the hotels and they would stand at the front desk and they would work with the front desk managers and the agents.

00:25:33.279 --> 00:25:41.440
So we have hundreds of thousands of hours actually implementing these programs ourselves and actually leading the implementation.

00:25:41.519 --> 00:25:44.160
And we built the technology around that knowledge.

00:25:44.400 --> 00:25:50.559
So it's built to do everything that you could possibly need to do to have a successful upsell program.

00:25:50.880 --> 00:25:54.480
Well, what's your view on AI coaching for these teams?

00:25:54.640 --> 00:26:00.319
Like, where where does it help and where does it maybe go too far or it hurts?

00:26:00.640 --> 00:26:04.880
So the approach we're taking, we actually have deployed AI for that exact purpose.

00:26:05.119 --> 00:26:16.640
What we're doing initially is we're sending the insights to the manager and we're we're showing highlighting for the manager what each agent's opportunity for improvement is because we want the manager to talk to them.

00:26:16.799 --> 00:26:23.599
We don't, I mean, we we are eventually going to do direct-to-agent AI coaching, but it'd be better if the manager did it.

00:26:23.680 --> 00:26:30.240
And we also recommend which training modules in the system they need to watch because every video is skill specific.

00:26:30.640 --> 00:26:37.279
So it could be that they're selling consistently, but always only a one-product upgrade instead of a two-product upgrade.

00:26:37.359 --> 00:26:42.000
So they might need to go on a rooms tour and they might need to watch a video about the value of sweets.

00:26:42.240 --> 00:26:48.319
Or, you know, if they're only selling sweets and they never sell a one product one thing, then they don't know enough about the views.

00:26:48.480 --> 00:26:52.160
The system can infer there's about 30 defects that they the system will infer.

00:26:52.319 --> 00:27:03.039
And so it'll recommend the video, it'll tell the manager what to do, what to say in natural language, and then it'll also give them who to recognize in their the daily stand-ups or their weekly meetings.

00:27:03.119 --> 00:27:16.319
And it what we're doing is we're trying to take the analytics that forever you and I in our careers have had to interpret and interpret it for the manager and tell them what it's telling them so that in a matter of minutes a week, they can affect the revenue.

00:27:16.640 --> 00:27:16.960
All right.

00:27:17.039 --> 00:27:24.480
Well, I want to zoom out a little bit from your specific product here and just I want to focus in general on maybe from an investor lens.

00:27:24.640 --> 00:27:30.960
If I'm constantly when I am evaluating acquisition opportunity, I'm looking for ways to add value.

00:27:31.039 --> 00:27:34.240
And this is a relatively novel concept for me.

00:27:34.559 --> 00:27:45.839
But I guess put your investor hat on for a minute and imagine someone going in and looking at a hotel and evaluating, of course, the physical structure, they're looking at the metrics, the financials.

00:27:46.160 --> 00:27:58.559
What are some like, what are possibly like three red flags that would tell you that a property is struggling in this particular area and there's an opportunity to implement this type of upgrade system?

00:27:59.119 --> 00:27:59.359
Yeah.

00:27:59.519 --> 00:28:05.200
So again, assuming there's a few different room types in a property, occupancy of the top room type, what is that?

00:28:05.359 --> 00:28:07.440
Is it on an annualized basis?

00:28:07.519 --> 00:28:12.319
It, you know, in in big resorts, sometimes it's 20% of the of the premier product.

00:28:12.480 --> 00:28:13.359
But I would look at that.

00:28:13.519 --> 00:28:21.119
If you have room types that sit empty unless you give them away because you've sold out the house, you have a sales problem because we know people book in at the bottom.

00:28:21.200 --> 00:28:23.359
That's the revenue management strategy, that's what you want.

00:28:23.599 --> 00:28:28.880
But no one is upselling people out of an oversell in the bottom in paying for the top.

00:28:28.960 --> 00:28:30.079
So that's one red flag.

00:28:30.160 --> 00:28:31.119
You can see it immediately.

00:28:31.200 --> 00:28:34.240
What is the occupancy of the premiere product if it's too low?

00:28:34.559 --> 00:28:42.880
You can also look at, you know, if there is an incentive plan in place, and because a lot of hotels do have them, you know, what is the payout on a monthly basis?

00:28:42.960 --> 00:28:47.119
You can very easily reverse engineer without having to go into the detail.

00:28:47.279 --> 00:28:51.279
If the incentive plan is 10% and they're getting$100, you know that they sold a thousand dollars.

00:28:51.359 --> 00:28:55.920
You can do that math pretty quick and then say, what would that RevPar impact be?

00:28:56.079 --> 00:29:02.000
If it's below 1%, then it's basically people asking for upgrades and that front desk is not offering anything.

00:29:02.160 --> 00:29:06.400
They should be at a 1% impact if they're making any effort whatsoever.

00:29:06.640 --> 00:29:08.319
And then turnover of the front desk.

00:29:08.400 --> 00:29:09.119
That's another one.

00:29:09.200 --> 00:29:20.079
If there's a if they're turning them over every month or two or three months, then you're gonna struggle to get any kind of upsell revenue going because it takes a little while for people to get into their rhythm.

00:29:21.440 --> 00:29:24.480
This is like this is changing people's lives.

00:29:24.640 --> 00:29:28.160
I mean, hourly employees, and I could share a lot of these stories.

00:29:28.240 --> 00:29:36.880
We have stories where we find out that a front desk agent is living in their car, and through our incentive program, they get an apartment for their kids.

00:29:36.960 --> 00:29:47.359
You know, like people that in even in South America, we had a story where someone came to us and said that they they live in a dangerous place and their kid was being bullied horrifically at school.

00:29:47.440 --> 00:29:50.400
And because of her incentive, she was able to put him in private school.

00:29:50.640 --> 00:29:57.759
These are not trivial things, you know, and so we can change people's lives, we can help them make more money, we can help the companies make more money.

00:29:57.839 --> 00:30:06.000
So it led me into this company, and I came in as a managing partner and pretty soon was president, and then five years ago was CEO.

00:30:06.079 --> 00:30:07.680
And the founder is still very involved.

00:30:07.759 --> 00:30:09.359
I talk to him on a daily basis.

00:30:10.000 --> 00:30:13.839
But the move toward technology was something that we had done in my last company.

00:30:14.000 --> 00:30:17.839
We had converted from a services company to a SaaS business at the end and sold it.

00:30:18.000 --> 00:30:19.359
And so we've done the same thing.

00:30:19.440 --> 00:30:22.079
It's, you know, you learn and you apply what you've learned.

00:30:22.240 --> 00:30:27.599
But for me, it's always just been belief in myself and a curious mind.

00:30:27.839 --> 00:30:31.920
And if there's a problem to solve, I want to figure out how to solve it.

00:30:32.000 --> 00:30:34.160
And that's led us into this front desk.

00:30:34.400 --> 00:30:36.640
The founder came from car rental.

00:30:36.720 --> 00:30:42.960
So if you've ever been upsold at a car rental counter, you can blame him because he pretty much invented that model like 30 years ago.

00:30:43.200 --> 00:30:48.559
And so I I brought it to hospitality and theme parks and a few other things and and changed the profile.

00:30:48.799 --> 00:30:55.279
But I just I gotta talk, I gotta stop you there because respectfully, that's like that's a poor example.

00:30:55.519 --> 00:30:57.039
No, it is, but they he doesn't work.

00:30:58.400 --> 00:30:58.960
You know what I mean?

00:30:59.039 --> 00:31:03.920
When you go to the car rental and someone, you're like, no, I just want to give me my effing car.

00:31:04.000 --> 00:31:05.279
I'm tired, I want to go.

00:31:05.359 --> 00:31:08.880
And what shuttle do I have to hop on now to go get my damn car?

00:31:08.960 --> 00:31:11.039
And I don't want to upgrade and I want to spend more money.

00:31:11.279 --> 00:31:21.680
So, what you're describing to me with the way that you can train your team to offer more value, value-based selling, is feels significantly different than the carry still.

00:31:21.759 --> 00:31:22.000
I don't know.

00:31:22.400 --> 00:31:29.359
Now it's like a superpower, and when we went away, they took that superpower to the worst possible extreme.

00:31:29.519 --> 00:31:30.000
I agree.

00:31:30.079 --> 00:31:35.920
It's it's like one of the worst experiences that you can have, but it wasn't back in the it was a much better experience.

00:31:36.000 --> 00:31:40.079
They've they've perverted it, they've become too focused on the ancillary.

00:31:40.319 --> 00:31:41.119
Same with the airlines.

00:31:41.200 --> 00:31:45.200
Now that they've discovered the crack of ancillary revenue, now it's like obnoxious.

00:31:45.359 --> 00:31:46.960
Like they want to sell you everything.

00:31:47.119 --> 00:31:48.400
That's not our philosophy.

00:31:48.480 --> 00:31:49.920
That wasn't our philosophy then.

00:31:50.000 --> 00:31:58.240
But that's when I came in, it was like how this there's this magical thing that he had, which is this process for how to sell at the front line.

00:31:58.480 --> 00:32:00.880
And I said, okay, where else can this be done?

00:32:00.960 --> 00:32:05.359
Well, I had been an upseller at a hotel myself, and so it made perfect sense to me.

00:32:05.440 --> 00:32:05.839
And it did.

00:32:05.920 --> 00:32:07.279
It made it does make perfect sense.

00:32:07.519 --> 00:32:09.200
We've had a lot of success with it.

00:32:09.599 --> 00:32:10.079
Yeah.

00:32:10.319 --> 00:32:15.599
You did pull on my heartstrings a little bit when I think about the person that's working the front desk working their butt off, right?

00:32:15.680 --> 00:32:16.960
And sleeping in their car.

00:32:17.119 --> 00:32:19.039
Like I know that this is a reality.

00:32:19.119 --> 00:32:21.440
It's this is not just hypothetically.

00:32:21.519 --> 00:32:26.799
There are people that have to work two and three jobs, especially in hospitality, because sometimes the wages can be so low.

00:32:27.039 --> 00:32:32.160
And as a property owner, as a business owner, like I want to feel good about what I'm doing.

00:32:32.240 --> 00:32:33.680
I don't want to exploit my labor.

00:32:33.839 --> 00:32:35.200
I do have to look at the bottom line.

00:32:35.279 --> 00:32:37.440
Like, I'm it's about making profit.

00:32:37.680 --> 00:32:44.480
I guess kind of pivoting back to what we were talking about with implementing these systems and such.

00:32:44.640 --> 00:32:49.680
I'm I'm curious, like, what's a what's a simple scoreboard for a property?

00:32:49.839 --> 00:33:00.640
Like, how do you keep track of this so that you know how people are performing and if they're they're hitting the goals to keep them in that position where maybe they're working the shift that has the most check-ins, things like that.

00:33:00.960 --> 00:33:07.039
Yeah, that performance-based scheduling is a thing that owners have at their disposal that is way underrated.

00:33:07.119 --> 00:33:09.519
And that's true for every even housekeeping.

00:33:09.680 --> 00:33:12.799
Whoever cleans the best should be on the most rooms, you know.

00:33:12.960 --> 00:33:14.240
That just goes without reason.

00:33:14.640 --> 00:33:16.720
But a lot of people overlook it because they're too busy.

00:33:16.799 --> 00:33:23.119
But if you can figure out those performance metrics and you could schedule accordingly, you can raise your revenue or lower your cost, as it were.

00:33:23.279 --> 00:33:26.720
But from a leaderboard standpoint, there's a couple of simple metrics.

00:33:26.880 --> 00:33:32.799
Obviously, revenue is ob is the clear one, but what is beneath the revenue is more important.

00:33:33.039 --> 00:33:38.160
So we like conversion, and just like any sales environment, how many of your arrivals purchase something?

00:33:38.319 --> 00:33:44.960
That's probably fairly easy to get out of your POS or your PMS if if you have access to reporting.

00:33:45.039 --> 00:33:46.480
It's probably not that hard to find.

00:33:46.720 --> 00:33:53.599
We also like a metric called we we coined it, but it's free to use URI, which is the upsell rate index.

00:33:53.759 --> 00:34:00.400
So you take the the average upsell rate, meaning the extra amount you're charging, and divide it into your ADR.

00:34:00.640 --> 00:34:03.920
And you really want to see that above 30% on average.

00:34:04.160 --> 00:34:06.160
So that tells you how well you're selling.

00:34:06.240 --> 00:34:07.599
You don't want to sell rooms for$10.

00:34:08.159 --> 00:34:09.280
Like that's crazy.

00:34:09.519 --> 00:34:10.880
You want to be in the right ratio.

00:34:10.960 --> 00:34:14.719
So if you have a hundred dollar room rate, you want to be selling a$30 upgrade as an example.

00:34:14.800 --> 00:34:16.239
In luxury, it's more like 50%.

00:34:16.639 --> 00:34:20.000
But in in mid-scale, upscale, you're probably looking at 30.

00:34:20.239 --> 00:34:22.400
Maybe in economy, it's 15 or 20%.

00:34:23.360 --> 00:34:31.920
So you take conversion and URI and you and you can pretty much predict what you're going to do because it they both handle occupancy as a variable.

00:34:32.239 --> 00:34:38.159
So when with those two, you can put the conversion rate on a leaderboard very easily, top to bottom.

00:34:38.239 --> 00:34:39.599
And we believe in leaderboards.

00:34:39.679 --> 00:34:48.559
So whether you're using a system or not, write it on a piece of paper and stick it on the wall, it has a dramatic impact on people's psyche when they're at the bottom of the leaderboard.

00:34:49.119 --> 00:34:50.000
Yeah, absolutely.

00:34:50.159 --> 00:34:57.920
Yeah, we we do something similar where we have our staff, they each pick a Hawaiian kind of iconic animal, whether it's a turtle or a dolphin or something.

00:34:58.159 --> 00:35:00.880
It's kind of silly, but it's fun because of the other age, right?

00:35:00.960 --> 00:35:01.760
They're they're younger.

00:35:01.840 --> 00:35:07.119
And and of course, what we are judging their performance on has been reviews, right?

00:35:07.280 --> 00:35:13.360
So we incentivize that if someone leaves a review and mentions them by name, then they get a they get a small amount.

00:35:13.599 --> 00:35:16.880
It has really dramatically improved the quantity of reviews.

00:35:17.039 --> 00:35:22.880
I mean, like we bought a business that had 500 reviews and had been in business for like 20 years.

00:35:23.119 --> 00:35:28.400
And in six months, we got 500 reviews just by incentivizing and five-star reviews.

00:35:28.480 --> 00:35:34.400
Like, like we have a 4.9 rating out of five because we put intention into it.

00:35:34.559 --> 00:35:35.519
We builded culture.

00:35:35.599 --> 00:35:38.880
This wasn't just like you're describing, like it was aligned.

00:35:39.039 --> 00:35:46.480
There was mutual benefit for the guest and for for us, because people are not going to just write a review unless they're getting great service.

00:35:46.559 --> 00:35:47.840
They go hand in hand.

00:35:48.000 --> 00:35:52.159
So I believe unless something goes horrifically wrong, that you're right.

00:35:52.320 --> 00:35:55.360
A good review is going to come from the service, not the property.

00:35:55.519 --> 00:35:58.719
I mean, I have this debate with restaurants all the time.

00:35:58.880 --> 00:36:01.840
What's more important, the aesthetic or the service?

00:36:02.079 --> 00:36:14.480
And maybe I'm biased because of the business I'm in, but I think you can have a hotel or a restaurant that's a little shabby, that needs a refresh and get great reviews because the staff there is amazing.

00:36:14.639 --> 00:36:19.840
Or you can have a pristine brand new property and the staff are jerks and you're going to get terrible reviews.

00:36:20.000 --> 00:36:21.920
So that's sort of how I come down on it.

00:36:22.079 --> 00:36:32.480
Obviously, you want both, but I think the biggest impact on the guest experience is the people serving them, which is again why I don't think going to pure automation is a good idea for hoteliers.

00:36:32.719 --> 00:36:37.119
But yeah, I mean, building a culture of fun, of trust, and of reward.

00:36:37.440 --> 00:36:39.599
And don't forget accountability.

00:36:39.840 --> 00:36:42.239
You want good reviews, you incentivize good reviews.

00:36:42.320 --> 00:36:43.920
You also don't want bad reviews.

00:36:44.079 --> 00:36:45.679
So don't get bad reviews, right?

00:36:45.760 --> 00:36:47.920
It's like you want both going on at the same time.

00:36:48.159 --> 00:36:49.840
But yeah, and you can add in.

00:36:50.320 --> 00:36:52.639
Here's another really simple way to think about this.

00:36:52.800 --> 00:37:02.719
If you owned a bar and you wanted to sell more margaritas, the best way to sell more margaritas is to raise the price by$2 and give that$2 to the server.

00:37:03.280 --> 00:37:06.320
You will sell more margaritas than you've ever sold.

00:37:06.559 --> 00:37:06.880
Right?

00:37:07.119 --> 00:37:10.639
So that premise kind of permeates what you're doing.

00:37:10.719 --> 00:37:17.599
If you have hostels and you have a certain room type that you could upgrade more to, put an incentive on it.

00:37:17.679 --> 00:37:32.159
Even if you don't want to have to calculate commissions and percentages and tiers, you could just say, look, every one that of those that you sell above their check-in, I'll give you five bucks or whatever, you can make it very simple and add that into that culture you've created for your reviews.

00:37:32.239 --> 00:37:33.440
It's the same concept.

00:37:33.679 --> 00:37:34.000
Yeah.

00:37:34.159 --> 00:37:44.800
I mean, if we're selling beds for 50 bucks and we have vacancy and we have a private room available that we sell for$170, well, I'd rather have someone upgrade to the$170 room if it's sitting there vacant.

00:37:44.880 --> 00:37:45.920
So all of this is applicable.

00:37:46.000 --> 00:37:48.639
I don't care what, you know, if you're big or small, I get it.

00:37:48.800 --> 00:37:50.320
At the end of the day, it's all a ratio.

00:37:50.400 --> 00:38:06.800
And if you can increase your bottom line through alignment with your team, through better culture, through better guest experience, better reviews, less bad reviews, all of this makes sense for improving the experience and for the bottom line of the hotel operator.

00:38:06.960 --> 00:38:08.320
So this has been eye-opening.

00:38:08.400 --> 00:38:08.960
I appreciate this.

00:38:09.119 --> 00:38:10.719
So, Joffrey, super tactical.

00:38:10.880 --> 00:38:16.480
I guess to give you an opportunity here before we wrap this up, what's one takeaway you think you want to leave the listener with?

00:38:17.119 --> 00:38:18.800
That you don't have to do it alone.

00:38:18.960 --> 00:38:26.800
You can, by all means, do everything that I've said, but for a very nominal price, you can have a professional group like us come in and help.

00:38:26.880 --> 00:38:30.079
And it just stream, it just accelerates the potential.

00:38:30.159 --> 00:38:30.960
But just do it.

00:38:31.280 --> 00:38:37.920
Whether you use us or not, look at your business as something of value that there is value to be upgraded into.

00:38:38.079 --> 00:38:40.079
And things like late checkout are a no-brainer.

00:38:40.320 --> 00:38:44.880
Every hotel, every domicile in the world should be selling late checkouts.

00:38:44.960 --> 00:38:47.039
Even Airbnbs don't offer them and they should.

00:38:47.119 --> 00:38:50.559
Like it's it's a no-brainer and it's just free money, basically.

00:38:50.719 --> 00:38:51.760
And it's a huge service.

00:38:51.920 --> 00:38:57.760
So yeah, just believe that you have value and then encourage your teams to sell it.

00:38:57.920 --> 00:38:59.760
And the other, there's another benefit.

00:38:59.920 --> 00:39:03.039
When you have a team that's engaged and they're making more money, they don't leave.

00:39:03.119 --> 00:39:05.920
And you can anchor your culture around these employees.

00:39:06.000 --> 00:39:10.239
Like our business in particular, our average tenure is over 10 years.

00:39:10.480 --> 00:39:12.159
We don't people don't quit.

00:39:12.320 --> 00:39:18.880
Occasionally, we've had to fire someone, but they really don't quit because the culture is what we spilled the whole business around.

00:39:18.960 --> 00:39:21.360
And we we try to pass that on to our clients too.

00:39:21.519 --> 00:39:25.360
Is culture is what you do every day as a business.

00:39:25.519 --> 00:39:29.920
And if you do it in a way that people want to be there, then you're gonna have a long retention.

00:39:30.079 --> 00:39:36.719
And creating opportunities for a front desk agent to make a little more money, make you a little more money, have more fun with the guests.

00:39:36.960 --> 00:39:38.800
Where's the downside to that?

00:39:39.280 --> 00:39:40.480
Yeah, so true.

00:39:41.039 --> 00:39:41.760
Awesome.

00:39:42.079 --> 00:39:42.960
All right, Joffrey.

00:39:43.039 --> 00:39:47.920
So if our listeners want to stay in touch with you, maybe they want to just follow your journey, how can they do so?

00:39:48.239 --> 00:39:50.639
Yeah, so our website is uh obvious.

00:39:50.719 --> 00:39:56.239
Uh that's www.frontlinepg, like performance group.com.

00:39:56.480 --> 00:39:59.599
I'm very active on LinkedIn, so they could follow me, they could follow us on.

00:40:00.320 --> 00:40:02.480
And that's our primary social environment.

00:40:02.559 --> 00:40:08.719
And I'd love to hear from any hoteliers out there or restaurant owners or both that have a need or question.

00:40:08.800 --> 00:40:11.199
I'm happy to answer it for them, whether they engage us or not.

00:40:11.440 --> 00:40:12.960
I'd love the interaction.

00:40:13.679 --> 00:40:14.159
Cool.

00:40:14.320 --> 00:40:15.039
Awesome.

00:40:15.280 --> 00:40:17.599
Well, I'll put all that in the show notes for our listeners.

00:40:17.760 --> 00:40:20.320
Thanks again for listening to the Hotel Investor Playbook.

00:40:20.480 --> 00:40:26.000
If you got any value today, share this episode with at least one person that you think will take action on it.

00:40:26.159 --> 00:40:27.599
We'll see you again on the next one.

00:40:27.920 --> 00:40:28.800
Aloha.