Boutique Hotel Secrets Podcast

39 - One-Star Reviews, 3X Work Ethic, and a $2M Revenue Target with Micah & Adam

• Micah

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 46:21

In this episode, Adam and Micah pull back the curtain on the messy, motivating reality of renovating The Wesley Hotel — from a gut-punch one-star review to a new GC delivering three times the workload of the last team. They also dig into exciting new revenue experiments including a public pool, a local coffee truck partnership, and a smash burger food truck — plus what a triple net lease actually looks like in practice.

 Affiliate code for Quo

https://get.quo.com/mdvsnezsa1lk


 Affiliate code for MEWS
https://referrals.mews.com/u0AExnZa


Connect with Micah:
Instagram: micahinvests
Tiktok: micahinvests1

Connect with Adam:
Instagram: adaminvests1
LinkedIn: adaminvests1
Tiktok: adaminvests1

Thinking about Boutique Hotels? Schedule a call:
https://bit.ly/4t1q3bb

🏨 Check out The Wesley Boutique Hotel in Page, Arizona: https://www.thewesleyaz.com/visit

📍Welcome to Page Mural — one of the local spots mentioned in this episode:
http://bit.ly/4tCjOu4

SPEAKER_01

We think the Wesley when it's stabilized and totally dialed in, close to or over $2 million top line revenue. When you back that up, okay, a $1.2 million top line is $100,000 a month. I don't have any Airbnbs that are grossing or netting anywhere close to $100,000. So the numbers are inspiring and get you really excited very quickly.

SPEAKER_00

Hey everybody, I'm Adam Walls, and I'm here with my co-host Micah Thomas.

SPEAKER_01

We're short-term rental operators who made the jump into boutique hotels. And we're in it right now, raising capital, renovating a 50-room property. We're figuring it out as we go.

SPEAKER_02

This is the boutique hotel secrets podcast, and these are a secret.

SPEAKER_01

Welcome in, Boutique Hotel Nation, to another episode of the official Boutique Hotel Secrets Podcast. I'm your host, Adam Walls, co-founder of Comeback Hospitality, and we're chronicling our journey, our jump, our leap of faith from short-term rentals into the commercial hotel asset class, starting with the Wesley Hotel. It's not just me though, luckily. So let me bring in and invite into the show my mister from another sister, Micah Thomas. How you doing, Micah?

SPEAKER_03

I'm doing good. Man, I think it's 104 today. So it's a little warm, just a little bit warm here at the hotel, but things are going great. Excited for this episode. We got tons of updates, a little bit of trial and error happening at the Wesley, and a little bit of development we're talking about. Really excited to jump into this episode, but I think we first need to lead with a little bad news.

SPEAKER_01

Oh man.

SPEAKER_03

I'll let you expand more, but we got a one-star review today, and we don't take this lightly. So maybe you can expand. Maybe you're willing to even read the actual review and let listeners just get a piece of what it's like running a hotel while also undergoing renovations.

SPEAKER_01

Yeah. And I came back from a beautiful weekend camping in the Redwoods, doing all these lovely activities, and then you start your week. And this is the worst thing that you know, I feel like an Airbnb guest, we get so used to five-star reviews that a four-star even feels personal. Guess what? The rating game is completely different in hotels because I think people feel a little empowered to go, that's a commercial thing. That's a big institutional billionaire. So you always hear from the ends, you hear from the kind of nine out of 10 or 10 out of 10 on Xpedia booking. And you certainly hear the ones and two stars. So we thought it might be interesting for people to see this. It's always, I always kind of cringe a little bit. So it's not like we get thousands of these, but we get too many. One is too many. And so we just want to read this. This is public information. If you looked up our hotel, so I don't feel like we're revealing anything confidential or anything sensitive here, but I'll just read it, man. So one-star review from our active project. Remember, this is old rooms, it's the old property. It had been on love for over a decade. It was losing money. So this is what happens when you're buying distressed assets, and you and your whole thesis is we're gonna reimagine, reposition, and create something unique and different and elevated. It's a journey to get there. And so I so wish we could have put this person in a new room, but of course, we don't have new rooms ready yet. So let's hop into the review. On a 10-point scale, we got a one, which is terrible, as Expedia would break that down. And so it says, I if I could have given a negative five-star review, I would have holes in the walls, paint peeling, hair in the bathtub, toilet loose from the floor. The office was closed because we arrived so late, so there was no help. We were exhausted, but honestly, we should have just slept in the car. The bed springs were so uncomfortable. The refrigerator stunk to high hell. It is a total dive. The next morning, I went to turn in my key and to tell the front desk about how terrible it all was. And the guy was nice enough and said that they were renovating, but that they should have nothing to do with housekeeping. I wish I could upload pictures. Krista, June 16th, 2026. Thanks, Krista, for the feedback. And feedback, of course, we say in personal development in the HR world, feedback's a gift. So there's always something to learn when you get good news, kind of bad news. It's all information, it's all data. So when you saw this, Mike, or when Roberta, our GM, sees this, what's going through your head?

unknown

Yeah.

SPEAKER_03

Coming from the Airbnb world, like you said, it's either five or nothing. Yeah, I would much rather you don't leave a review, but it it I can see two sides. It's demoralizing, especially when we're trying to be the best hotel in town. Getting a one-star review feels like a really bad way to start. But there's another side to this coin. Like you said, she's in an old room and we're dealing with an old product right now. And it gives us an opportunity for growth. Every bad review, which is one of our main KPIs on how we see what needs to be done better. We need to take this information, synthesize it, and find ways to improve, even with an old product. Because, like she said, if the room truly was dirty, that has nothing to do with an old product. That has something to do with maybe housekeeping or quality assurance or room audit. So this is room for growth. These are things that we can implement now that only get bigger once we have new rooms online and we have even more guest staying at the hotel. So I see both sides of the coin, but nonetheless, heartbreaking to see yet another one too many one-star reviews.

SPEAKER_01

It's so hard. And right now, for full context, because we've got 30 rooms underway that are so close to being ready and done. And when we've got 30 rooms, we're demoing the old ones. That might literally be the last room that we sell under the old umbrella that a guest has to have, even close to an experience like this. So we're the expectation we've wanted this so badly, but the reality is people are still having crummy experiences. But like you say, there's something to be learned here. And I think one of the things to point out is our hotel in the off season shrinks to about five team members. And in the summer and peak season, it explodes to over 20. And right now, when we don't have 50 rooms sold out every night, you don't need a huge staff. And one of the first things to go is that QC, that quality control, where a cleaner comes in, cleans a row of three, five, 10 rooms, and then you've got a professional third party or a secondary cleaner, a fresh set of eyes coming in with a little checklist documenting. Did we clean this? Did we wipe that surface? Did we check under the bed? Did we all of those things that happen in professionally run Airbnbs and happen in hotels every single day just become harder when you've got four or five people. If you only have two guests staying for the night, does it justify, right? And this is for the aspiring or the existing hotel owners out there, if you're paying somebody even minimum wage to sit at the front desk and then cleaners, that's a lot of cash out of pocket to service one guest. So it actually gets easier with volume and a fuller staff to meet all of these quality standards. So, anyways, that but that's like explaining away some of it. And I thought it was interesting when we had our bi-weekly kind of development and performance check-in with our general manager. So this is just arcadence to let our hair down, check in with our GM. How are you feeling as a person, as a leader? What's getting in the way? How can we set the cultural tone for where we want to take this product and how we can elevate things? And no knock against her, but I think her first reaction is, oh, that's that this person's lying or they're making stuff up, right? And that's like an emotional response, right? Somebody's saying something damaging, she's putting up the shield, she's protecting herself and her staff. And I think that's a very human reaction. And as leaders, as owners, we need to allow some of the discomfort to come in, right? What's the silver lining? What's the one nugget in here that we can take away so that we can invest in becoming better every single day?

SPEAKER_03

Yeah. And I think we did a really good job at that. We kind of stuck a pin in it. We didn't just move past the comment. We let her know, hey, maybe there is some truth. And whether there is or there isn't, we need to take a look at our operations and see what we can do better. Just this morning, I was reading Emouth Revisited, and they made a good comment saying businesses continue to get better or get worse, but the matter of staying the same is pretty much non-existent. So we need to continue to improve and to grow our business, or else we're doing the exact opposite. And that led us into a really good conversation about maybe some book recommendations that RGM can start reading and bringing to the meeting with more feedback. If you're in hospitality, these probably won't be new to you, but unreasonable hospitality, like I said, e myth revisited, as well as I'm drawing a blank right now.

SPEAKER_01

Oh, yeah, we talked about the checklist manifesto. Yep, yeah, yeah. And look, there's a thousand books that we could throw at our GM or our staff to build culture. The goal here is not to overwhelm one one person, but just checking in on hey, do you read books? Do you listen to audio book? What might be the right pace? Is this one a quarter? Is this one a week? You know, we settled on let's try just as an experiment, like one book a month. And then since we're already meeting bi-weekly, that means every other meeting we would have a chance to talk about some of the key frameworks, key ideas, key strategies. And we all also told her, hey man, use AI. So maybe you only get halfway through. It's not cheating, there's no test here. So you can ask AI for what are the big ideas, or how does this apply to me in my specific situation? And AI can actually help you bridge the gap. But start starting with some of these frameworks from people that have either been there and done that or they've just learned things, right? For 20 bucks, you can get access to some incredible experience, skills, new ideas. I think it's so refreshing. And you actually even almost pulled a goodwill hunting here and saying it's not even 20 bucks, Adam. You don't even need to own the freaking book. It's get your Boston public public libr library card. So, do you want to mention for folks the app that you'd mentioned to our GM?

SPEAKER_03

Absolutely. So before I go and purchase a book, I'll look on an app called Libby. If you're not familiar with it, it's pretty much a public library app that allows you to read either the words on the screen or you can listen to the audiobook for free of charge. It's a loan. I think they have them for 21 days, and you can extend it even if you want, or get put on a wait list. So a lot of times I'll check there first and bam, just like that, I have access to a book. I can listen to it. I'm a little bit of a crazy person. I read while I run or listen to an audio book while I run. And I'm always in search of something to listen to. Music won't do it, especially when you're running miles on miles. So I love listening to a good book and learning something while I'm catching my breath, so to speak. Yeah, just a great resource. And she we sent it to her, and I think she's going to take advantage of it almost immediately because it's of no charge to her. She just has to have a public library card.

SPEAKER_01

Yep. And we're just all we're trying to do is put things in her path that might help her accomplish what she's already doing and help her grow, right? Because for sure. We said we know that she can rock and roll on this hotel, but what if we buy a second hotel or a third hotel? If she's interested in growing with us, then we've got to elevate the entire team. We at some point we need to talk about a successor who takes her role, who's the GM for the Wesley moving forward, if it's not her, if she moves on. So I think she gets that. She's excited to see the Wesley come online. And she's excited, quite frankly, to grow in her own kind of personal and professional development. By the way, you'd mentioned on the call, I thought it was great that some of these books, you take different things when you read them. So if you read a book five years ago and we're just in a completely different situation, the things that you're pulling out of that book, what it means to you, the takeaways are actually different. And what would you say? How many times have you read The E Myth?

SPEAKER_03

I think this is my fifth time reading it. And it's it just meant different things at different times. What I can tell you is the last time I read it, I didn't own a hotel. So I can almost certainly say the way I'm thinking about working on my business looks a lot different now than it ever did before because I didn't own a hotel. No matter how many Airbnbs I had, it's just different. And I think that's the case with a lot of these gyms because they're timeless. A lot of these books that we read, these business books or self-help books, depending on where you are in your life, it can mean something totally different. So I'm very grateful for that. And there's several books that I'll read once a year or once every couple of years, just because they're they continue to help me.

SPEAKER_01

Yep, yep. I love that. And look, to me, this is just good business. It's good leadership, it's good culture building to get exposed to new ideas, different ideas, and then infuse them into yourself and into others. So I know Micah, you're an avid learner, and I think that's why you and I kind of clicked right away. I like teaching as well because one of my favorite quotes to teach is to learn twice. You literally have to consume it yourself and then to play it back to another person really helps reinforce. Do you know this material or are you just kind of winging it? How deep can you go? How many anecdotes, how many frameworks, how many things can you pull out? And then it's more accessible once you've started to teach and share some of these ideas. So, by the way, I have no idea if this is normal, if this is what Blake Daly or if Mike Shogren's doing this with his GMs, for example, but it made sense to us, right? That our GM is one of the most important people at the Wesley. And so we want to make sure we understand her challenges, what's frustrating her. How can we eliminate some of those things? How can we leverage and play to her strengths? And well, how can we develop and grow her so she's more capable, makes a bigger impact with the team so she can grow? Anyways, it's been a really fun way to connect. And while occasionally we are still talking about, oh, we need to order some curtain rods, or you know, if you're not careful, you can get consumed with tasks and busy work. And this is our sacred, safe space just to come together as a management team and say what's on our mind, what's working, what's not working. Are we aligned to move forward? And I think that's one of the big keys of the game is staying aligned. And maybe this is a good segue to talk about maybe recent renovation or progress, but I feel things are clicking, things are humming that we are aligned once again with our kind of old GC, new GC coming on project. And you're there, you're in room seven, so you're seeing progress, man. But maybe you can tell people at home where we're at in the project.

SPEAKER_03

Yeah, the progress is remarkable. I was talking to our advisor, Isaac Oswald, earlier this morning. He's how much better is the effort now versus prior to this current GC arriving. And I asked, like, I was like, do you want a quantifiable? Of course, you know me, I'm a numbers guy. I want a quantifiable amount of how much effort is being like contributed now. And I had to say that's probably about three times the amount of the effort that was being done before. I'm seeing people work after hours. I'm seeing people wake up at six o'clock when I go on a run. I'm seeing people work over the weekend because they just want to help the GC and the project move along. So I'm just mind-blown because one side says, Man, I wish we could have had this level of effort from the beginning, but the other side is, man, they know they're playing catch up and they're doing everything in their power to get it done. And with that being said, today's what June 16th, it's a Tuesday. We're looking to have 20 rooms, and I feel confident saying that 20 rooms ready by Friday.

SPEAKER_01

Can you say that again for the kids in the back?

SPEAKER_03

20 rooms ready by Friday. And it's almost it's just a little touch-up stuff, like touch-up paint and making sure the dresser is in the right place, and it's very small things, but the furniture is in the room, the toilets are installed, it's just a matter of getting a few little things here and there, and the rooms will be ready to go. So this is something that we've been waiting practically months for, and I've seen it. I've been here for two weeks at this point. I've seen it happen in the course of two weeks. So the speed at which they're moving, and the GC is saying his goal is to have that's 20 of our rooms. He his goal is to have 30 rooms ready by the end of the month. So about two more weeks, and he anticipates having another 10 rooms ready. Wow.

SPEAKER_01

And do you buy that? Do you buy that? We've heard two two weeks away from 20 rooms for a couple months now. But new team, new energy, new phone, who dis. Do you do you believe what you're hearing? Do you believe what you're seeing?

SPEAKER_03

I want to start by saying my confidence has been shocked because I feel like we've been promised and promised and let down and let down. And I probably said this before on the pod. I keep telling people I'm from the show me state. I'm not actually from Missouri, but I like to say I'm from the show me state because you got to show me. I'm so past hearing the words. I just want to see it. I want to see the results, the effort. And I'm buying it right now because of how fast they're moving and how diligent they're being. They're working from there's a few people that this morning I went up to run at 6 a.m. They were outside opening doors and they'll work until 5. Some of them will go get a drink from the bar, come back, and work even more. And I'm just like, what in the world? This is new and different. This it just doesn't, it doesn't feel normal. And there's this weird story happening because there's still a few people here from the old crew and the old GC, and they're seeing the work ethic of the new crew, and some of them are being intimidated. I don't know if I can keep up with this effort, and some of them are actually matching the effort. So you talk about a culture shift and just going with the culture of the project, it's like you kind of have to get with it or get lost because they're not going to slow down because you're used to moving at a certain pace, they're going to keep this thing humming. So very exciting. I actually went and took new pictures today that we're going to put up on our direct booking website on Expedia and Booking. And like you said, the goal is that last person to stay that gave us a one-star review. She may be one of the last people to stay in an outdated room. And I couldn't be any more happier than to get these rooms offline and get this new product out to guests.

SPEAKER_01

Oh man, we're so ready for some room revenue, baby. We modeled in six months of no revenue. We knew that we always wanted to keep at least 10 rooms open. So think of the room is basically uh or our property is like a big square. So 10, 10, 10, 10. So it's 10 rooms, and then we have one two-story building. So that's our and then a back building. So it lays out a little bit differently, but anyways, think of tranches of 10. And for the last, I don't know, several months, we've just had 10 old tired rooms keeping the lights on. But it allows us to not lay off our front desk staff, not lay off our cleaner, right? Keep our maintenance and pool guy on property. It justifies not laying people off. And that was kind of good enough for us. Plus, it gave us the ability to learn the operation. So I know that we've kind of commented on this in the past, but so excited to get room revenue. And just at a high level, we're talking 20 rooms is probably 50k gross per month. There's some seasonality and all of that, but that gives you a sense of we think the Wesley, when it's stabilized and totally dialed in, close to or over 2 million.2 million top line is $100,000 a month. I don't have any Airbnbs that are grossing or netting anywhere close to $100,000. So the numbers uh are inspiring and get you really excited very quickly. Of course, on the other side, I don't have any Airbnbs that have a $42,000 mortgage payment or the type of utility bills, or I'm not hiring 20 people to run a handful of Airbnbs. So with great revenue comes great expenses, and we've just been kind of living in the red for a little too long. So this is very bullish, though, to hear that you're feeling the energy, the pace. 3x is kind of the quantifiable number on the increase. So that's inspiring. Let's maybe this is another good chance for us to pivot to talk about room revenue. Room revenue is usually most, if not all, of the story for most budget or roadside motels. But part of the thing that captured our imagination with the Wesley is that we have this exterior courtyard. We've got, we're right on Main Street, right? So our location is premium, and we're thinking about some ways to monetize, bring in some ancillary or secondary or auxiliary revenue. So I know we've got a couple experiments kind of coming up. Where do you want to start, man?

SPEAKER_03

I'll start with the public pool. This feels like maybe the first thing that's gonna happen. We've mentioned it before. We've talked about day passes and the pool being open to the public. And I think now we're ready to pull the trigger just as a trial. We're gonna start for two weeks, open the pool up to the public. Of course, there'll be waivers involved, and you have to be accompanied by an adult and the XYZ. We're gonna make sure they stay in a designated area, not in the construction area. But this gives us a chance to generate revenue. If you hadn't heard before, it's 104 degrees outside. And Page, Arizona does not have a public pool. So there is no opportunity for anybody in the community to cool off, quite frankly. And we want to be that source. We're in the center of town. People can walk to us from anywhere in town and take advantage of the pool. So it gives them a chance to have fun in the water, but we also can make a little bit of revenue on it. And just off of quick numbers, we're looking anywhere from like 6,000 to 10,000 additional per month that we are able to do this. And if we add a heated pool, of course, people don't really want to get in the pool as much during the fall and winter, but there's an opportunity for us to make money during the colder months as well with this. So we're gonna try it out. Of course, there will be things that we learn, things we need to improve or change. But we think that it's a really good opportunity to not only partner with the community, but also generate a little bit of extra money. So just wondering kind of your thoughts on it. We kind of talked through it earlier in the week, some of the things we need to consider, but really excited to roll this one out.

SPEAKER_00

If you're getting value from this, follow the show and share it with one person who's ready to move beyond short-term rentals.

SPEAKER_03

And if you want to learn more about the boutique hotel secrets community, the link is in the show notes.

SPEAKER_01

I think this is awesome. And actually, one of our investors, when he was up in Oregon, was in Bend and he stayed at the Campfire Hotel. So I can't remember if that's a one-off hotel or if it's franchised or built out, but kind of similar vibe that we're doing. But they're one of their big shticks is you've got like a little bar right there, and then they have a heated pool. You have pictures of people in the winter wearing beanies with snow coming down and heat coming off the pool. I'm sure it's a pretty penny to heat a pool at whatever they do, 90 degrees or something like that. But you can imagine if that's available and you market it well, people will come just for that, literally for that. To rather than stay closer to the place that we're gonna go, or this place was a little bit nicer, or this place had a restaurant. Having a killer standout amenity with great lifestyle photography can really set you apart. So I think the other half that gets me excited is yeah, the revenue is nice, but thinking about capacity, right? And okay, a community pool like that brings up that conjures up memories of me and the Black Hills of South Dakota, our community pool, and it was loud and it was mostly families and kids running around. And what the sign said, this is our ool. Notice how there's no pee in it. Let's keep it that way. There's all the pool jokes out there. And so I'm just thinking about if we're kind of going to elevated and wellness, and we've got a lot of international, maybe older couples and they're hiking, having a lovely time, and then all of a sudden you've got just basically a kid's frat party happening six feet away. So I think that'll just be interesting to go, okay, what's the right amount? Are there safeguards? How do we just make sure that this whole thing flows right? Should we be selling these in hour increments, two hours, four hours? At some point, should we hire a lifeguard? How do we communicate? What if somebody bought one or two hours but then wants to stay? How what's the mechanism to upsell them or keep them back in? So there's a lot of just operational pieces, even with 10 people, 20 people, I think this gives us a chance while the hotel is kind of under renovation and we're not selling 50 rooms and there's not a hundred paying guests on property to just kind of give back to the community in the short run when it's really hot, make a little bit of money. But then I'm actually most excited about using this as an experiment. What can we learn from this? And how do we make sure that what we're trying today matches where we want to be six, 12, 18 months from now? So that's kind of my take on the pool.

SPEAKER_03

Yeah, I'm excited. I'm sure there'll be some like, oh, we shouldn't have done that, or oh wow, that worked out great. But the one thing that comes to mind, and then I'll pivot really quick, is we had to check and see what the capacity of the pool was, and the number was 52, 5'2. Immediately, I think everybody was like, There is no way we're putting 52 people in our pool. It's just it's not gonna work. But our GM, she made a good point. She's like, There's 50 hotel rooms. So essentially, if each hotel guest wanted to use the pool, they can it can kind of accommodate it. But I think when we open it up to the public, those numbers get down significantly lower. But just interesting to hear, like as we're thinking through all the things and hours, oh wow, we can accommodate up to 52 people at a pool.

SPEAKER_01

Yeah, but look, we've got a lot of Krista who left us the one-star review. She got in after hours, so we only staff our office until 10. That's maximum. And in the winter, it might even be until eight. And then there's a whole after hours mechanism right now to get guests their key and orient them to the property. But it used to be if you just were late and didn't know, you might call at midnight and it just rings, or it goes to voicemail, or our GM and staff are sleeping. So that used to be the experience. And I gotta, I don't know, is it 20% of our guests, 30% of our guests are arriving at the complete end of the day, 10, 11, 12, 1 a.m.? And some of these people are waking up at six or seven, then pushing on. This is just literally a roadside stop, get some rest, recharge the Tesla, and then be on our way.

SPEAKER_00

Yeah.

SPEAKER_01

The whole goal though is to build kind of an oasis of sorts to go, man, you're did you realize you're two hours away from seven national parks and monuments? What if you kind of hub and spoke out of this place? I know when we travel, we're coming up actually on a family vacation, we're actually taking off tomorrow. But like the prospect of changing rooms every single night, and that's by the way, a lot of these grand circle tours are like one night in Bryce, one night in Moab, one night in Zion. You can see a ton of stuff, but implicit in that is every day you're packing up and moving to a new Hampton Inn or Best Western or name that place. I think we make a real case to start building agendas and patterns going, come stay with us for the week and knock out everything. It's a little bit more driving, but you're at a great place once we get the barrel sauna cold plunge, right? Relax and rejuvenate, have some wellness elements. I think some people will take us up on this.

SPEAKER_03

Yeah, I agree. I think it's gonna be a great several amenities that we're adding. And you just think about how tired you are after coming back to a hotel and you hiked all day and you were in the sun all day. Let's go relax by the pool, or get in the cold plunge to help with our sore muscles and then kind of detox in the sauna. Yes. It's just it's a no-brainer for me. I would love to get into a cold plunge after a day out in the mountains.

SPEAKER_01

Yeah, that's right. Or I have a buddy who has just stayed with us sitting trialed in one of our new rooms. Thank you, Aaron. So a good buddy from Minnesota lives in Alaska now. They're on a multi-day trek. He showed me some of the beautiful pictures, slot canyons up to their waist and water. Epic. A little too hard for me, but he's an adventure kind of guy. But this market attracts very adventurous, very outdoorsy type people. And again, but he was rolling into Canab. He was gonna kind of come to, he wasn't even gonna stop in Paige because he didn't realize the proximity to all of the things. And actually, the next thing he wanted to hit what was within shooting distance of Paige. So, yeah, so, anyways, I think the our location is great. If we can kind of craft and cultivate this story, and then I think about people like Aaron, who he checked out of one hotel, and then he couldn't check in until four o'clock. And let's say he's in Paige, cool. We go to the brewery, we have lunch, we got four hours, and the hotel is saying we can't check in early. All of a sudden, a day pass option looks pretty sick. Or let's imagine people that are doing the great RV State Park, national park thing, and they're on the road for three months, six months, nine months. Sometimes just taking a breather, not seeing anything, having an off day, and just a place to rest and recover and do laundry becomes beautiful for sure.

SPEAKER_03

That's exactly right. And I guess this will bring me to our next venture, ancillary service, so to speak, and that's the coffee truck. We've been talking about coffee, and it finally seems to be happening sooner than later. I got a chance to meet with, we're working with it's three sisters, they're partners, and we kind of walk the property and talk about logistics and food truck placement and XYZ. And this is really exciting to me because I get their coffee off of the property at least once a week. So to have them actually on site in a permanent location to not only be able to service the general public, but most importantly, our guests. So our guests can get curated coffee, they have Navajo tea, you name it. And it just gives people who, especially our international travelers who probably don't know much about Navajo Nation, now you can have a curated meal, curated drink, specifically from the culture that exists all around Page. So very excited for this and really just ready to be able to walk out of room seven and go get a fresh ice latte.

SPEAKER_01

Man, how nice is that? And by the way, this is 10 feet from our mural. So exactly. I don't know if it's changed at all when I was down there. It felt like every hour on the hour, two, four, six people were posting up, kind of getting selfies. And by the way, imagine if there's a little food truck or coffee truck 10 feet away. You're probably gonna check it out and at least look, right? And then imagine if our QR code has 10% off or it's got little offers on it, right? Or information about other places in town. I remember the I was when you were in Italy and I was in page and just I didn't have a car. And so guess what? In the evenings, I can only go to the bowl so many times. In the evenings, I found myself walking down the main street, and there's a ton of tourists out there just looking for something to do, anything to do. It's 7:30 p.m. They just ate dinner and they're kind of looking to explore, right? And so I think having a coffee truck or a food truck on property that comes in early. So, hey, for your 6 a.m. runners or maybe the 5 a.m. runner who wants to get the coffee afterwards, or late. Maybe it's 8 or 9 p.m. If they're making money, I bet you anything, they'll find ways to staff it and stay there. Absolutely. One of the things I thought might be interesting for aspiring boutique hotel owners, or maybe you've got one, or maybe you invest in this, is what does that partnership even look like? And this is obviously the first time we're like negotiating with a coffee truck, but I thought it might be interesting to kind of get into it a little bit on how we structured this with them.

SPEAKER_03

For sure. No, no secret. We used AI to help us with a little bit of a structure. We went with a triple net lease option, which is basically us being able to charge a monthly rent, but also collect a little bit of the profit share on gross profit. So basically, we're saying we want to we want you to pay to stay in our space and prime real estate, but we don't want to gouge you on a bad month. So that profit share says if you do really great, then we get a little piece of that. And if you don't do much of anything at all this month, then we take a little slither. But this allows us to align in more than one way so that they're not just paying the bare minimum and making hand over fist. And again, we're not gouging them and overcharging them, and they can barely keep up their rent every single month. So it took a little bit of give and take, and we're still some of the details, but generally speaking, I think we're aligned and we both agree that this is a really good deal moving forward. Interesting, interested on your take, because I believe you're the first person who actually drafted the uh the offer to them, and then we kind of iterate it from there.

SPEAKER_01

Yeah, and this actually came from some of my work on the Nevada City Hotel where we were just apart a little bit too far on price. The seller wanted too much, I didn't want to pay it, and so I had to get really creative around is there seller finance, are there earnouts, are there profit incentives? And actually, on that property, if you remember, Mike, uh the first floor was communal cafe. It was a bakery and coffee shop. And the owners of the building wanted to essentially structure a triple net lease. So I'm not gonna give you any of the money, but I'll pay you rent. That's one way. So you've got a solid floor, it's very predictable, but you don't participate in any of the upside. Or it could be all upside, almost like a sales-based person's 100% commission, no salary, right? That's the other end of the spectrum. I do great when you do great, but if you do poor, I then we're both kind of starving together. Yeah. So we thought it made sense to go a little bit more hybrid. Let's protect the floor with a moderate rent, below market rent, or maybe on par with market rent. Again, the spirit here is not to gouge you, but it's to make some money and to kind of lock in at least some dollars because you're using electricity, your water, space. There are some very real costs for you being here. But at the end of the day, yeah, we wanted to participate a little bit in the upside, protect the downside by having some consistent rent. One of the concessions we made is because we're a seasonal, probably like lots of hotels. So we have a higher rent in peak season and we have a lower rent in the off season. And that just makes it easier for them to cash flow. So I think the fact that we're business operators ourselves, I've structured leases and things like this in the Airbnb world. I tried to creatively take down another hotel that had FB elements, food and beverage elements with it. I think all of that gave me some spidey sense. And then, of course, talking with Joel and Isaac and Roshmi and the great coaches in you heard it here, Boutique Hotel Secrets, right? We had people looking over our shoulders going, yeah, take that out, move this around. Yeah, that's BS, get rid of that. Oh, add this clause. For example, I forgot to put in kind of mandatory escalations. So all of a sudden, just triple net lease typically operate on very low kind of rates, but over time I at least want to stay aligned two, three percent escalations so that I'm not wiped out just by inflation. But yeah, but anyways, yeah, I'm bullish. At the end of the day, I think Shogren and other people have talked about whether it's a bar, whether it's a food truck, whether it's something like this, is really an amenity. It's not a big money maker for us. If it can be a little bit profitable, that's way better than a little bit negative. So we want to kind of turn it to be slightly cash flow positive. But the goal here is not to get rich off of we want to be great partners and most importantly to have that amenity right there. Because think how many people, maybe there is a bus full of people that get dropped off, right? And right now where they're stationed, it's about two miles away. So very easy to get to if you got a car. But I was in Page for a week and I didn't have a car and I didn't get to have their coffee once, even though it's my favorite coffee there.

SPEAKER_03

Yeah. Yeah, that's a good point. And with Prime Real Estate, it gives them more visibility, more traffic, and better access for people who don't have a car. Because, like you said, many people walk up and down Lake Pow Boulevard, especially as the sun sets, looking for things to do. Maybe they stop and have a coffee and they're going to be offering food items. So maybe they get a snack or something on their way to dinner. The opportunity is great. Like you said, another amenity. We don't intend to get rich. We're looking at this like a long-term partnership, and both of us can win in the end. So, with that being said, one of our friends reached out to us about another food truck being on site. And we were entertaining the thought the priority was that we solidify the partnership with the coffee truck first. And then our kind of senses said, let's try, let's trial the food truck maybe for 30 days on certain days, see how they do, if they like the spot, if they like the traffic. And the biggest goal was to make sure there wasn't any conflicting interests. And we talked to the food truck girls about that. I'm sorry, the coffee truck girls about that. And we wanted to make sure that they didn't have to feel like they were competing for the same type of customer. Luckily, they didn't feel that way. They're gonna be selling coffee, tea, pastries, maybe a few light refreshments. Whereas the other food truck who we're gonna try for about 30 days, they're a Smash Burger food truck. So they literally sell four different types of burgers, three different types of fries, and canned soda. So it's almost a stark difference in the clientele that come up to a Smash Burger food truck versus a coffee truck, but they'll both be on property at least initially. And then we just kind of want to see how things go. One we know we'll be locked into for I think a year or so. The other, if we don't like how it goes after 30 days or so, we can always change, iterate. Maybe they come on certain days or busy weekends. But we're interested to see how it goes because yet another way to get people to the property, to get eyes on the Wesley, uh, and then possibly profit share again. So yet another revenue stream that doesn't have to come from our 50 hotel rooms.

SPEAKER_01

Yep, exactly. And we've got kind of two natural places once we knock down that information kiosk right on the corner over by the bowl side. So that sounds like might be the home to the Smash Burger place, or something else. There's probably this is not New York City, this is not Portland, thousands of food trucks available. There's like four. So we I remember originally when we were down there with Courtney, our designer, and we're testing out a few of them. This is pretty decent food, but my goodness, the your generator, sir, is blowing me away. You're just trying to try to think about what might be the right fit. Could we get some guest variation for people? So maybe on Fridays it's Smash Burgers and Saturday it's pad ties. So, anyways, I think this is a really interesting thing to explore, but you know, we're feeling it out. We're not committing to three-year contracts with multiple vendors. We're focused on one and then we'll test out an experiment, see what ultimately makes sense. Are we creating a win-win between the vendors? And ultimately, is this something that aligns with the guests who are staying here? Like you said, if this is more wellness and a little international, and we've got a bunch of vegans there, and we show up with smash burgers, you know, might be a little tone-deaf. So I think we'll play this out. We don't have thousands of choices, but hopefully you're getting a sense of our spirit of exploration, experimentation, and partnership, which I think is great.

SPEAKER_03

Yeah, yeah, that's exactly right. And I think I know we want to be respectful of people's time, but got one last thing we want to mention. So I'll pivot and talk about my story when I visited Glen Canyon Conservancy. For those who don't know, Glen Canyon Conservancy is kind of like your visitor hub to learn about the history of Paige and the Glen Canyon Dam and just John Wesley Powell, which is one of our most important and favored people here in town. So I went to visit. We had been pretty much gifted the boat, Emma Dean. It's a replica they use it in the one movie made about John Wesley Powell. But our designers and we did as well, we had the thought process of maybe cutting it in half and turning it into a display shelf for some of the John Wesley Powell memorabilia. The reason that we wanted to cut it in half was because it's about 25 feet long, and you just run out of places to put something so big. So we're like, maybe we could cut it in half, set it on its side, use it as shelving. So I just wanted to go to the conservancy and see what they thought about this. And let's just say it was met with a little bit of resistance. They were nice about it, they were they're great people, but they were like, Yeah, if you guys are thinking about cutting the boat, we may have to reconsider and talk to the board of trustees about what we're going to do with the boat.

SPEAKER_01

That's hilarious. You were like effectively saying, Hey, I like this Mona Lisa part painting, but just the part where she's smiling. So we're gonna we're gonna just rip ever so slightly, we're gonna keep it, but just the good half. Oh my god. And yeah, I get it why they were reacting that way. This is a museum piece, this is artifact one in the Powell Museum.

SPEAKER_03

Yeah, so that's exactly right. And again, they're very nice people. So we kind of sat inside the conservancy and brainstormed what could be done with the boat. I was very happy that I was able to explain that our current carport will be closed off. We intended to put planters on the front side with some shaded seating underneath the carport. And they brought up a great idea of turning the boat into a planner. So taking the boat, leaving it kind of flat the way it is leveled, is on two types of what do you call those Adam stands or uh yeah, but they're on like it's on a stand, maybe two feet above the ground as it is now, and just removing that entire thing to the front of our carport as a display and turning the boat into an actual planner itself. I was mind blown, didn't think of that ever, but it was a great way to utilize a really historic piece and accomplish the planner idea that we had that would sit in front of our shaded seating. And then I'll kind of let you fill in. Your dad had some really good ideas even further on what to do with it.

SPEAKER_00

Yeah.

SPEAKER_01

And look, I kind of pitched it at first. He's like, look way cooler if you hung it from the carport vertically leaning. And so you just we've had so many great ideas in this project, but champagne taste, beer budget. Or I thought, boy, we could put it vertically and have it as a trapdoor or secret door into our game room, which I still love that idea, by the way. But it just all the refurbishment, all the work you need to do on the boat, all the engineering, probably spend, I don't know, 10 grand figuring this out. Now it could be cool, and maybe we eventually do something like that. But I think the obvious thing is this is sitting on a street corner right now, just relocate it kind of as is, move it over. And my dad thought, and by the way, he was he owned an ace hardware, he's designed hundreds of homes. He was like a couple credits short of a landscape architecture degree. He thought maybe just get some natural kind of grasses or some sort of montage, use it against the boat, maybe a plaque the boat, and then some sort of illusion of rather than putting dirt actually into the boat because it's gonna rot, it's gonna leak, it's you're gonna have damage and all the things. So, anyways, just but hopefully you're hearing that we're being experimental, we're being open, we're making sure that people are good with our creative decisions and we're not taking too much license. But I was actually heartened when they came back with, oh, did you mean this? In the archives, they had a smaller boat, a different replica. They were like, Oh, yeah, that that's exactly what our designers were imagining. So this we might even get a twofer here, right? Where we've got a boat inside the lobby, a boat kind of blocking the carport. And literally the goal there is just to make sure that cars aren't coming in, that this is a pedestrian zone. Hey, those smash burgers and nice high-end coffees need to be consumed somewhere. While we can put up some sail fans and we can expand eating areas over time, we think right under the carport right now, when it's 100 degrees in the shade, makes the most logical sense.

SPEAKER_03

And again, this is just decisions you have to make. We're entertaining several options on almost every single decision we make. And there's a reality somewhere probably in the middle, you're either gonna kind of value engineer it, overspend, and sometimes you find deals. And you with the kind of culmination of those things, you try your best to stay on budget and on timeline and create the best product possible. That's all I got. I think that we have given the audience quite a bit of information on several different fronts, but hopefully people continue to just get this picture of what it takes to renovate and run a hotel. And this is our first time doing it. We are very transparent with what we're learning and what we're going through. But I think a lot of people can use this as kind of a guidebook on what to do, what not to do, and maybe what to prepare for if you're interested in this space, or maybe you want to do this with your next hotel. Any thoughts on that, Adam?

SPEAKER_01

Yeah, look, if you're getting value from this, obviously subscribe, do all the things. Thank you, by the way, for sticking around. If you're hearing these words, that means you're one of the loyal uh folks out there. So we love that. But reach out if you've got topics, questions, guests that you want to hear from. Again, we're repers of Boutique Hotel Secrets. That's how Micah and I met. That's how we're in this game together, taking down our first hotel. We're just having a blast, man. So it's it's scary at times, but if it were super easy, everyone would do this. We're learning it on the macro story for the Wesley is still extraordinary. Hopefully, a little bit of education, a little bit of showing people what it's actually like to own a hotel, renovate, reposition, sharing some of the numbers. Hopefully, this helps the next generation of hoteliers out there.

SPEAKER_00

Yeah.

SPEAKER_01

So I know you got to run. I got to run as well. But thank you everyone for tuning in for another great episode. Hopefully, we gave you some value on this one. And until next time, thanks for tuning in. That's the pod.

SPEAKER_00

All right, that's it for today on the official Bookie Hotel Secrets podcast.

SPEAKER_03

If this helps, be sure to follow or subscribe and send it to someone who needs that bigger push.

SPEAKER_00

And if you want the community or the resource and playbook to find what we're learning, the link is in the chat.

SPEAKER_03

Quick note we're VHS community members here in our own experience. And if you have questions or topics you want us to cover, reach out and let us know. We'll build this channel for operating just like this at Delpheus.