Defining Hospitality

Dan: Today's guests are co founders with a focus on bringing experiential and sustainable accommodations to the outdoors.

Their combined experience has spanned companies including Compass, Goldman Sachs, TPG, and Airbnb. They founded their new brand due to a lack of thoughtfully designed accommodations near the country's national parks. They are co founders of Castle Peak Holdings and co founders of Trailborne. Ladies and gentlemen, Mike Weiss and Ben Weinberg.

Welcome, gentlemen. How are you?

Ben: Doing well. Thanks for having us on today, Dan.

Dan: my

Mike: to be here.

Dan: Oh, thank you. Thank you. It's really good to have you. And I want to just share with you and the listeners why we're speaking Um, I go to all these conferences, I hear all these things, and then you hear all these buzzwords. You know, you hear there's, there's AI, there's algorithms, there's this, there's this, all of these buzzwords.

But the one I'm hearing the most right now in within the hospitality circle is this idea of outdoor leisure and outdoor hospitality. And I think you guys are kind of on the vanguard of that. Um, and I'm really intrigued by it. I want to learn more about it. And I'm just so grateful that you both are here to like, share with me and our listeners about kind of your journey to get to where you are and how you're changing lives and creating memories.

So thank you.

Ben: Of course, of course. Excited to chat about it.

Dan: So before we get into it, I'll start with you, uh, with you, Ben. Um, And if you guys have the same answer, it's okay. Um, if there's difference there's that's okay too, cause we can explore what it is, but, you know, as defining hospitality, um, what does hospitality mean to you? And, and how do you define it, Ben?

Ben: Well, given how much time Mike and I spend together and how great partnerships work, I'm sure there'll be overlap. Um, but I'll, I'll start by most simply saying that the hospitality business is the memory making business. And I think to dig into that a little bit, there's a handful of dynamics that are worth unpacking, at least to start. Number one is that luxury is often confused with making memories. When most people think about their favorite experience in a restaurant or a bar or a hotel is typically not the nicest hotel or the nicest bar or the nicest restaurant they've ever stayed in. We are very focused on delivering an extremely high quality, thoughtful, design forward experience that may not be luxury.

But it's accessible and it's beautiful and stunning, um, and capturable nonetheless. The second thing is that to create memories that people hold onto for an extremely long period of time is something that we are going to fail at most of the time. but that's ok We need to be taking a shot at that every time a guest walks into one of our hotels or one of our restaurants.

But we also need to be self aware and we need to be humbled that that's not going to work most of the time. You cannot force it. And it has to be authentic and real. And it's different for every guest at different moments in time for different groups of people on different stays. Um, I

Dan: that. I especially love that you're embracing failure and failure is almost like a motivation, you know, for, if you're in the, in major league baseball, you're If you miss seven outta 10 at bats, you're still going to the Hall of Fame. Right. And that's a really, that's, that's really interesting.

And, um, it's almost like that's your nuclear reactor that's powering your, your drive. Would that be accurate to say?

Ben: think that's accurate to say. I think also Dan, and you know this, self awareness and humility is critical to winning in hospitality. Um, and I think there's a self awareness and humility that we find refreshing for ourselves to understand that we are doing the absolute best that we can to create something that is indelible, that is permanent, that people will carry for the rest of their lives.

But we also don't want to make the claim that we don't feel as real or honest, that that's going to happen to every single guest that walks in our hotel.

Dan: Hmm. I love that. And I, and I think that that applies not just to the hospitality ex experience, it's entrepreneurism, it's family dynamics, it's just. It's just living. And I think that it's really exciting when you can find that purpose and passion and it just aligns and it just makes everything work that much better.

So thank you. And I just wanted to go to Mike, like, okay, so Ben, your partner, you spend so much time together. Do you agree? Disagree with his, uh, With his definition, do you have anything you want to add to it? But like, how do you define or what does hospitality mean to you?

Mike: Yeah, um, I, I, I definitely agree, uh, with Ben. I think the thing that I would add to it, um, that, that is maybe slightly, uh, different than Ben is when I think about hospitality, I think about making people feel effortlessly taken care of. And I think that really comes down to understanding who the guest is.

Planning for that guest and thinking through every detail for that guest. Before they arrive so that when they get there, it feels like magic. It feels like, wow, they've really thought through everything. They've really taken care of everything for me. I didn't even know that I needed this, but they thought of it for me.

Um, and I think that magic is, is hospitality.

Dan: Yeah. And when, when all of those, when you make the Venn diagram of all the things that you guys have just said or shared with us, um, it is magical and it is memorable. And I also love, um, the idea that it's not necessarily lu it's not necessarily luxury, right? In fact, I totally agree with you and I would go a little bit further on the Sometimes the best memories are not from that luxurious experience.

I think sometimes my best memories of traveling with my family, not so much on business, but with my family and they may disagree with you is when everything goes sideways. Flights are canceled. Storms are coming. Like everything is there and you're just forced to do something completely unexpected. And those are the memories that I know I'll remember and laugh about hopefully with them.

Uh, if I, or hopefully when I live to be, hopefully. in my 90s. So, um, I want to go for a second into the, the vision that you guys are delivering. So you both have vast, varied past career journey experience. Um, we have a lot of budding entrepreneurs, other entrepreneurs, and just people who love hospitality and design here. Can you walk us through your origin story? Cause most entrepreneurs start off as just one. Oh, I'm going to take a step out here and do it. How did you guys find each other as partners and how did you test to make sure that this could work? A and B, what kind of like check ins do you do with each other to make sure that it's working on a daily, weekly, monthly, quarterly, annual basis?

Mike: the origin story for the business starts with the origin story for our partnership. Um, we've known each other, Socially for a long time. Um, we both worked at Goldman Sachs, but not at the same time. Um, we have a lot of mutual friends, a lot of mutual connections and a lot of mutual interests.

And that's really where it started was, are we the right partners for each other, hopefully for the rest of our careers, um, and that's what, where, where the partnership was born, we shared similar values, we shared similar ambitions, we shared similar passions for hospitality, for real estate, for the outdoors, um, And, and we started the business before we knew exactly what we were going to build.

We knew exactly the type of business we wanted to build. We knew exactly the type of people that we wanted to bring onto the team. We knew how we wanted to treat those people. We knew that we wanted to build something that would outlive both of us. We knew we wanted to try and build something that filled a real need in the world that made the world a better place.

Um, but, and we had, we had a bunch of ideas that we wanted to go and explore, but we weren't set on the exact thing that we were going to build. And so it started with. Partnership is the most important thing. We need to make sure that that is right. And then from there, we can go and test these ideas and, um, and, and look for the right thing to go and build.

And so pretty soon after that, we did have that light bulb moment, which, um, was us traveling to a bunch of outdoor destinations. Like I said, we're both passionate about the outdoors. Um, we both, Felt this belief that life should be an adventure, that life is, is just better when you're getting out of the daily grind, when you're getting out of the city, when you're getting out of your office, you're seeing new things, you're trying new things, you're experiencing new things.

Um, and that light bulb moment for us went off when we were in Estes Park, Colorado, which is where, which is where Rocky Mountain National Park is. Um, and it's the third most visited national park in the, in the country. There's millions of people that travel there every year. And we were sitting there paying over 300 a night to stay in a select service hotel.

And we, we were sitting there and, and that was the light bulb moment where we said, what, what is going on here? There's, there's all these people come to this market. There's not the hotel product that we and our wives and our kids and our friends would want to stay in. And we had, we had been to enough markets and seen enough hotels to realize that Estes Park was not the only market like this.

There was a ton of markets in the U S like this. where there needed to be a new brand, a new product that was coming into these outdoor destination markets and building something that was more designed for it and was more experiential. Um, and we wanted to jump on the opportunity. I'm sure Ben would, will add, add some more color and context to that story, but that was kind of, you know, Um, starting with our partnership and then moving to that light bulb moment of how we got the business going.

Dan: Yeah, Ben, why don't you, um, kind of share your light bulb moment or just, or agree with that light bulb moment. And then also just talk about like, partnerships are very, Difficult to do right, but when done right, I love how you guys said, I don't know if you said it here or just before we were talking, um, where you're taking a very long term view on your business.

You're looking 25 plus years. Um, and if partnerships are done correctly, they should last well beyond the 25 years. And it's just, it's completely accretive. And I love that it's not a zero something. It's a, it's a one plus one equals five, 10, 20, you name it. Um, But yeah, walk us through that.

Ben: Yeah, I'll, I'll, I'll touch on a couple of things. Um, the first I would say, I, I, I like to say to our investors, this is a 40 year project and we've got 37 years to go. Um, the reason why we anchor in such long term outcomes, such long term processes, such long term vision is that it impacts every single thing you do, whether you realize it or not.

So as it relates to very short term oriented businesses versus very long term oriented businesses, Almost every decision is influenced by that and impacted by that. And our view has always been that if you can set yourself up for the longterm, which is not an easy thing to do, but if you can't set yourself up for the longterm, you're going to end up making better judgment calls about people, about processes, about outcomes, about hotels and whatever it may be.

And so we've been very, very focused on, on kind of long term outcomes from the beginning. And then I'll jump to, to, to, to what else you asked about, Dan, which is kind of these, this light bulb moment. Listen, as, as many of your guests, uh, know, and, and your listeners know, entrepreneurship is a, is a dangerous game.

It's, it's a rewarding game. It's a special game. It's a unique game. It's very powerful game, but it's a dangerous game. And so while we certainly had a light bulb moment that, that, that Mike described that light bulb moment. Was followed by an enormous amount of work to ensure that we were building something that mattered to guests that was actually scalable. Um, scale is incredibly important to us scaling thoughtfully and scaling carefully, but having the actual opportunity to scale is really important. And so after we had that light bulb moment in Essence Park, we kind of continued our work surrounding, um, all of the markets that we could be in and how big this business can grow.

Dan: one of the things that I love about your approach where I think you had your light bulb moment was. And sitting over my shoulder, I don't know which one, is right there, Theodore Roosevelt.

He's really, you know, everyone has their goods and their bads, but I think on the whole, to me he's a hero because The work that he did in creating the national parks, and I think looking at the United States as a, as a country of entrepreneurs and developers, and I'm so grateful eternally to him for protecting these lands, because I just imagine, like, just the neon signs and the poster, I don't know, the big, uh, billboards and just Huge, uh, hotels that could have erupted around our national parks.

And the vision that he had is just incredible. So incredible. In fact, that when my son was born back in 2010, we were living on 20th street in Manhattan. And also on 20th street in Manhattan is Theodore Roosevelt's birthplace. Right. Um, which is cool. It was just a couple of blocks away and we decided to name my son Theo after that.

Ken Burns had the national parks, um, uh, documentary that was happening right around then. And, um, it's amazing. I mean, it's really incredible what he did to preserve that for all of us and, and generations to come. So I know you're not limited to, you know, These national parks and, but really more broadly outdoor space. are your, how, how do you approach from like a design perspective when you're around these beautiful places to kind of just tie into the environment that you're around?

Mike: that's a good question, Dan. So authenticity and designing for the location is one of the critical pieces of, of creating the right brand here. Um, you know, if we came in and dropped the same box in every one of these locations, it just wouldn't be the type of experience that these guests are looking for.

Um, and so. In all of our markets, we've partnered with a different design team that we're working with to design all these properties. Um, and we are, we are starting from square one. We come up with a concept and we come up with a design approach that is for the guests that is traveling to this location that celebrates everything that is special about that location and is creating the type of experience.

For that location that the guest wants and needs. Um, and so, uh, we certainly have our pillars, our, our design pillars, our programming pillars that we run through every one of our properties, but from a design standpoint, we want to make sure that when you walk into. Our lobby in the Rocky Mountains, it feels like a modern mountain lodge that belongs in Colorado.

When you walk into our lo lobby in Wrightsville Beach, it feels like it is a casual, fun beach vibe, not it, not like a mountain vibe, right? And, um, and so we, we are very focused on, on designing for the location, both in terms of materiality and form and function.

Dan: Okay, cool. And then, um, I guess to Ben, just picking up on the pillars that Mike just threw down, when you approach a new project, how do you define those pillars and are you doing that before you bring on the design firm? Um, are you doing, like, what's your process in, like, identifying the space and then how do you create the pillars and where, what trickles down from the pillars?

Ben: Yeah. So even stepping back from the pillars, I'll kind of start when we just are getting to know a place and just getting to know a market. Um, we are somewhat obviously constantly on the road and exploring new places. Some places work, some places don't. And we can talk about why that is, but getting to know a place.

Getting to know the community, getting to know the look and feel of that place and forming our own view as to what is missing there, as to what fits there. And what would really resonate with a customer that's going there today. And in some cases, a customer that's not yet going there is a lengthy process that unfortunately cannot be rushed. Um, in some cases it takes a year, in some cases it takes longer, in some cases it might take a little bit less, but it's constantly going to a place until you feel like the learning curve around. People and organizations and feel and vibe and tone of that place is sort of starting to decline and you're really starting to get a handle on what this place is and what it stands for, because that's going to flow into everything from what you see when you first walk into the hotel, the music you're listening to, the art on the walls and the rooms, there's an enormous amount of detail that all kind of drives and flows from one very specific image. Um, I'm sure Mike will have, um, a bit to add to that as well.

Mike: Yeah, I mean, what I'll say is the pillars that we think about, uh, whenever we're going into a new property are beautiful and thoughtful design, magical moments, and guiding the adventure. And those three pillars, you know, when we think about design, it's not just the physical design of the space, it's the design of the entire experience.

But thoughtful and beautiful design for us is the authenticity that I talked about before, and then also making sure that we're making the right functional decisions for the guest. Um, and so in, if our hotel doesn't have en suite bathrooms, we need to, we need to, even if it means that we're losing a few keys, we need to put en suite bathrooms because that's what the guest is looking for and, and needs, right?

If we don't have a bar and restaurant, you know, moving into magical moments for us, every one of our properties needs to have a center stage. We talk about center stage being that local gathering place where not only our guests are gathering, but people. Around the entire town are coming. That's where they're going to come for happy hour.

That's, we're going to come and gather socially. Um, so creating that center stage, if there's not one that already exists at that property is really important. So we have F& B in every one of our properties and every one of our markets. Um, because that, that's a crucial part of designing those magical moments.

Um, and then guiding the adventure is the third thing that, that we're very focused on, and we do that in a lot of different ways. It starts with. Creating field guides. You know, Ben was referencing the research that we do going into a market, but we become real experts on the markets, partially from the research we do.

But I think more importantly, from the team of people that we bring around the table, right? We're, we're hiring people that are working at these properties that are truly passionate about these locations, right? The, the person working at the front desk in Rocky mountains. loves Rocky Mountain National Park, and they know more about Rocky Mountain National Park than anybody, right?

And so they are the ones that are guiding the adventure for our guests that are coming in and asking for local tips, in addition to the staff members having local tips, we put together an insider guide. We put together field guides for anyone who's traveling to our markets, where, which we put up on our website.

We send them to guests ahead of time so they can start to plan their trip before they get there. And so we really want our guests when they're traveling to one of our properties to feel like once they've arrived, they've got all the information they need at their fingertips. And it's really the best jumping off point to go and experience these markets in, in totality.

Ben: I think, I think Dan, the end to end nature of how we think about our hospitality product is really important, and I think where the world is moving. So, it's not just a hotel room, and it's not even just the experience that surrounds the hotel room in the public spaces, at the restaurant, at the bar, out by the fire pit. It's sort of even bigger and wider than that. So when you, when you land in Denver to drive up to Treble and Rocky mountains, you should be getting an email that says, here's the long way. Here's the short way. And by the way, on the long way, Carwater Cherry Pie is absolutely outstanding and you should stop there about 15 minutes away from Essence Park.

And by the way, here's a Spotify place to listen to kind of on that trip. Once you get there. Here you can book, you know, ice fishing and snowshoeing, or here you can book a separate activity with the kids. I think that kind of handcrafted, unique, end to end nature, where you feel like you're calling your friend who's lived in Estes Park for 25 years, is, is really the, the feeling and the tone that, you know, That we're focused on striking.

Dan: I'm going to go out on a limb here and I'm going to bring some baggage into this from our, from previous conversation, but I love this idea of pillars. Okay. Cause that's what holds up everything. And I know, uh, you said on the, from the design pillars, it's, It's, uh, I don't know if it's a design or guest, but it's really beautiful design, magical memories, and adventure, right?

Those are three big brand pillars for what you guys are trying to bring across. Um, I know we've been talking about the guests a lot, which I appreciate, because, like, it's their experience, but I've, you just brought up, Ben, the employees and the type People on your team that you attract. And to me, so I think that there's like this for what you're doing.

There's a guest pillar, there's a employee or teammate pillar, right? The people you attract. And then you mentioned earlier, your investor pillar, right? So I've heard about the guest experience. And I like that. And we can dig into that more where you've touched upon the employee. I just, I want to talk more about the employee and the investor.

So on the, on the employee side, tell us, how do you differentiate from other hotels or other hospitality experiences in those areas, which you are, as far as attracting the best and brightest from either locally, they might fly in cause they're so passionate about it versus like, what, what, what's happening in other places in those markets?

Like what's, what's it? What can some, a prospective employee expect? And why is it different and better to work with you guys?

Ben: Yeah, I think there, there, there are a few layers to that. So the first is, is what every hotel owner needs to guarantee their employees, which is getting paid on time and getting good benefits, right? That's the baseline. Um, that's beyond table stakes. I think once you start to think about the second layer and not only what it takes, but also how we assess, and we go very deep on assessing people across the business of every role, um, in, at any asset is do you want to win? And are you energized by results? And if you can find people who understand what we are creating, who understand where the business is going, who understand the opportunities to go along with that and want to be a part of that, and are also energized by the quantification of results, whether that's guest reviews, whether that's peak rate in the peak season, whatever it might be, you've managed to attract people who are very unique and that becomes a flywheel. A lot of what we talk about is kind of that flywheel of mutual respect between, between teams. So for a manager and the employee of any, at any point in the company, whether, you know, it's at our headquarters or whether it's within the housekeeping department, there needs to be a mutual respect where the manager sees someone working hard and committing themselves to the business in a way that is unique and a way that is reliable and a way that is thoughtful, which in turn, Creates an atmosphere where the manager feels the need and the push to deliver for that person, to deliver the flexibility, to deliver the transparency, to deliver like a culture that they really want to be a part of.

And once you get that flywheel going, it becomes quite powerful and people start to kind of attract from the outside more naturally than I think you might expect. And then the third layer I would talk about is just brand. Um, I think that the brand has been a more powerful tool than we expected from a recruiting perspective as it relates to kind of what people want to be a part of, um, when people walk into our hotels, they are a tight operation.

It's very clear kind of who's doing what and who's responsible and why. Um, I was saying that clarity is power and we want to remove fog anywhere in the business, whether it relates to, you know, moving a shift or it relates to, you know, a work stream at headquarters, either one, you have to have that clarity and really the movement of an organization that people want to be a part of that really kind of supports, supports that brand and builds our brand.

Dan: I want to go back to something there, but before we do that, Mike, um, your partner, Ben has just shared these really awesome ideas from flywheels to winning and benefits and, you know, removing the fog. Is there anything that. You know, you'd like to elaborate on or, or add some color to,

Mike: Yeah. The only thing I'll add is, is, In terms of attracting talent that is already in these markets, you know, Ben mentioned the power of a brand. I would just mention that the power of a growing brand that they can join as it is still growing as, and they can play a meaningful part in helping shape how that brand comes to life in that market is a very special thing.

And people are getting really excited about Being a part of the team that is helping shape that and helping build that. Um, so it's being a part of the brand, but being a part of helping shape a brand in the early days. Um, and then in terms of attracting talent from outside the market, these are really special places.

I'm trying to convince people to go and work and live on the beach in Wrightsville beach, or on the coast in Mendocino, or, you know, at the foot of Rocky mountain national park. There's a lot of people that love those places and it's not easy to convince someone to pick up and move and take their family with them in many cases.

But if you're going to convince them, it's going to be to go to a special market like this, to, to help build an opportunity like this.

Dan: on the people side, I love the idea of removing the fog. So as you're from the assets that you have and where you're growing, um, pull back on that a little bit. Cause like, I assume like, I haven't been to Estes in a while, but it's from what I remember, it's you're out there, right. And like, that must be.

Difficult from staffing, getting there, shift changes. I like what, how do you actually remove the fog and create more transparency around, around your team from, you know, accountability, shift changes, all that. Is it like a technology or is it just communication or like walk me through that I love because everyone does better when things are clear from a North star where they're going to like, okay, we got, we have a surprise.

How do we handle it?

Ben: Yeah, I think it's probably three things. Um, one is quality of leadership by far the most important. Um, our GMs are extremely high powered, high quality, high intensity, high integrity folks who are really leading the charge, um, at our properties. Of course, everyone on the team more broadly is on property frequently, but our GMs are really leading the charge and setting the tone of this is how this works here, and I'm going to provide clarity where there is fog. Fog is very natural. You cannot avoid it. Fog always sets in, but it's a question of seeing that fog, moving towards it, and saying, I see it. I'm going to unpack this, I'm going to attack it, and I'm going to fix this. And that in itself is very energizing to folks, even setting aside the outcome, which is, I see fog, we're working against fog, and we're going to fix this, even if it's not fixed instantaneously. Um, I think the second thing is just using the basic technology and tools, um, in place, um, to make sure that there is clarity and reliability and flexibility across the board. Um, As, as, as I relate to kind of folks on property. Um, and then I think there needs to be a shared understanding. And a shared culture amongst our GMs.

We just finished our GM summit, um, at headquarters here, and there needs to be a collective understanding and collective view of this is how we interact with our teams. This is what our teams expect of us. And this is the bar that we need to hold and not compromising on that. Hospitality is often kind of boiled down in my mind to some level of compromise in certain areas.

We are pushing to not compromise. From a people perspective in every possible way, every day of the week. And we feel that that's a real driver of results. It's hard to do, but it's a real driver of results.

Dan: Yeah, that's super cool. I like, I'm always intrigued by distributed businesses that are in hard to reach locations and how do they get, how do they keep everyone rowing in the same direction? So again, it's, it's, I mean, people are super important, but I love how you boil it down to quality of leadership, um, tech tools and clarity and shared understanding.

So, and the shared understanding thing is really. It all comes from culture, right? So as entrepreneurs creating and building and growing this brand, um, oftentimes you're so focused on putting the deck together, getting investors, getting it open and getting it running. How do you, how did you prioritize your culture and how did you help define that?

And like, how did that all come together for you guys, Mike?

Mike: Well, I think culture starts and ends with the people that you bring on board. Um, and the culture starts with Ben and I, and we decided to partner together. That, that, that, that's the beginning of the culture, right? And then the next five hires have to embody that same culture that we're trying to build.

And, and then the five people that they hire need to embody that culture as well. So I think, I think one is hiring people that represent the type of, And represent the type of culture that you want to go and build. Um, and then I think continuing to talk about what matters and what matters most and the type of business that we want to build, um, you know, especially in a growing business and a distributed business, Dan, back to your prior question.

Like we, we need to say things and we need to write them down on paper. We need to put together property level brand books. We then need to go and do a training on that brand book. We then, we need to come back in three months and retrain on that and make and do brand audits and make sure that they're still happening.

And so it is constant communication and constant check ins and making sure that the things that we. Hope to happen are actually happening. And the people that we expect to behave a certain way are actually behaving that way. And, um, and we've, we've hired a lot of really, really incredible people. Um, I'm sure that we will hire people that don't work out.

And it's making sure that if that happens, that they're not at the company for very long, because we need to make sure that. You know, we're surrounding ourselves with a team that represent the type of culture that we want.

Dan: And a lot of that must be really, it's got to be value driven as well, right? How do you check in on your values and culture, um, as a, as a company? And then down to the, down to the properties and from the teams there. So how do you keep alignment there?

Ben: It's interesting. Sometimes I think the way we think about the barometer is how we can measure trust at any given time. Trust is such an important concept and word and value for us. I think, especially over the last 10 years, the world seems to have gotten More chaotic, less trustworthy, and less predictable. Um, we see trust as something that spreads kind of throughout the business in multiple different dimensions. So our guests have to trust Trailborn that we are delivering the product that we say we're going to deliver in the email and on the website that you see. We are delivering that. Um, our team has to trust that Mike and I will deliver on growing the business and actually on the vision that we said that we would and maintain that vision.

Maintaining the culture and maintaining the day-to-day feel and tone of vibe of what we do. And then our investors, of course, have to trust us that we will deliver on very simply what we said we were going to do. Um, and if any of that trust breaks down and you ever feel that trust breaking down, that is. Ultimately the result of a deterioration of values or the emergence of fog or any variety of things that you have to focus on immediately and remove from the business. And listen, that's natural building any business that just happens. It's going to, you have to accept that. But again, the important thing is focusing on it and identifying and fixing it versus kind of letting it sit, which can be really, um, really negative and toxic.

Dan: I'm glad you brought up the investors. Cause as the third pillar that I kind of wanted to dissect, um, the beginning, you said, you know, you're, you want to, you're, you're looking at everything with a 25 plus year timeline and then as a partnership beyond, correct. So with many investors that doesn't square with them, like they want a fast return.

They want, you know, a five year hold and, you know, turn and burn and go and move. Now there are other ones like Warren Buffett on the other side who are, you know, he. If you read all of his books, he wants to buy and hold a great company forever. So walk us through like a 25 plus year horizon seems like a long time.

How do you attract that type of investor? And like, how do you court them and how do you. Report to them and check with them to like, make sure everything is okay. And like you guys are aligned just like you were with your guests and your employees. Now let's talk about that third pillar.

Ben: Yeah. So I think Dan, first to address your point on, on duration, you know, there are. Assets and hotels that we will buy and sell over time based on capital structures and what investors are asking us to do. Um, and then there's duration of the business and the platform, and those are two separate things. So there are the realities of the capital markets where certain investors will say, guys, we support you and we'd like you to sell this, this asset in, you know, seven plus years. That's okay. Um, and then there's the platform and the team. Which long outlives that, um, without question. Now, over time, do we feel that we'll move to longer and longer duration capital structures and fund vehicles?

Yes. Um, but that happens over time. Um, and that happens with, um, the generation of return, um, and the kind of the, the evolution of the business and the, and the platform, um, when, when there's a bunch of different ways to kind of characterize our business to, to investors, um, But the simplest way that, that we characterize our business is acquiring, renovating and repositioning hotels where millions of people are going, you can't build hotels anymore.

And people are looking for a product that they can't find. And, you know, simplicity on the far side of complexity is something that we think about. We like to, to boil everything down based on an enormous amount of work and digging. To something that's very simple that people can digest, um, generally investors and capital allocators have a lot of options.

They have a lot going on and they need to be able to understand businesses very succinctly, very quickly, and then be able to kind of dig in a layer deeper. Um, and that's, that's what drives a lot of how we present ourselves.

Dan: I guess that's another good avenue to go down. So you're looking for these properties that can't be built again, right? They're just there. They're in these like really magical places. How do you cast a net to try and like find these opportunities to get more guests there and create more memories?

Ben: Yeah, it's, it's, it's digital and it's analog. Um, so it's boots on the ground and it's data driven. Um, so boots on the ground, um, part of our team is dedicated to identifying and going to iconic outdoor destinations with supply constrained real estate, where we are. Introducing ourselves and getting to know folks in the community.

Some are real estate owners, some are not, but breaking in that way, just literally boots on the ground, knocking on doors, picking up the phone, and just getting to know people and figuring out what these destinations actually look and feel like and what type of real estate opportunity we're talking about, where you find the supply, demand, and balance that we're looking for. And then, um, From, from here, from our offices, you know, there's a huge amount of data availability out there as it relates to where people are going, what their incomes are and what their preferences are, that you can spend an enormous amount of time and we do, and a bunch of our team is dedicated to this, figuring out where is the supply demand mismatch, the demand being.

wealthy Americans who are, um, uh, desiring to go into the outdoors and pursue outdoor adventure where supply is fixed. And when you find those two things, and you find a very low quality supply, we tend to find that the Trailborns are the right fit.

Dan: as you're getting your, your properties up and the ones that are up and running, you're operating the new ones you're getting open and up and running. And then as you're looking for new deals out in the future, like. Mike, what's exciting you most about the future of what you guys are doing and your partnership.

Mike: What excites me most is just getting these projects open and getting guests to, to actually experience these markets and experience these hotels and see what we've been working on for the last several years. Because every time I go to one of these markets, every time I visit one of our properties and I see what is in the works, I just can't wait for guests to come and experience them.

Um, so, um, getting, getting the doors open to these other properties gets me really excited. Um, you know, I think Dan, to your prior question, um, on investor communications and, and Identifying opportunities and how we position ourselves. I think the only piece I would add to that is, um, vertical integration for us is something that is super important, um, and is something that we think is.

Essential in order to operate in these types of markets and this type of product, because it allows us to become true experts on these markets, identify more opportunities in these markets, control the guest experience and making sure that we're delivering what the type of experience that guests come to, to expect and holding ourselves accountable.

There's no third party that, you know, is making excuses or to point fingers at. Um, it's all on us. And so we control everything from what is the product that we're putting out there? How is that product operated? And, and what is the brand doing to, to make sure that, that guests are finding out about this product and coming to these rooms.

So, um, that's the other piece that I would add to what Ben said.

Dan: And just for the listeners on the vertical integration part, that's in the sense that you're owning the assets and you're managing them.

Mike: Yep. We're, we're owning, we're managing, and we're developing the brand.

Dan: I think it's really awesome that you're vertically integrated. Many other companies in hospitality who start off acquiring and repositioning hotels, they don't, um, they don't necessarily operate them. They bring in third party managers, um, for whatever reason. What was your thought process on taking that on out of the gate as well?

Ben: You know, we have worked with, uh, as you can imagine in our kind of prior lives prior to Castle Peak and Trailhorn, um, third party managers. It, in some ways, um, is, is a tough business to, to, to wrap your mind around. Um, and the, and the reason for that is, as you know, Dan, hotels aren't incredibly Operationally intensive business. Um, and it is a very high cost of failure business. Um, and it is very meticulous, detail oriented, execution oriented business that needs to be done. Right. Our view is that if we were going to put our careers online, if we were going to ask investors for large amounts of capital, and if we were going to promise and look people in the eye, both our team and our guests, and promise a specific type of experience, it was going to be very difficult to do that. without operating these assets ourselves. Now, most people don't do it because it's very expensive and very complicated to build companies from scratch. Um, that's true. But we decided to do it because we saw that on the other side of that we could unlock enormous amounts of value and differentiate ourselves and really just deliver, deliver results based on based on that team that we have here in house.

Dan: And are you using your management company at all, or do you have any plans to, to, to leverage that to owned, um, owned assets, or are you trying to just keep it aligned under like vertically integrated only for yours?

Ben: Not, not today. Not today. Um, we don't anticipate doing that anytime in the near future. Um, we are an owner operator that is very much in our DNA. That is very much who we are. Um, and we have no desire to, to, to lose focus on, on our assets and start spending time on others.

Dan: And Mike, if you were, if there's a listener out there that said, Oh, you know, Um, I love the outdoors. Normally I would go camping. Um, I want to come, I want to try like a, a, a nice hotel, like a brick and mortar hotel in one of these magical places. And they're kind of on the fence. Like what would you say to them?

How do you get them to give you a shot?

Mike: Well, if you're someone who is looking for something that is not camping or glamping, you want four walls, you want a warm shower, you want a comfortable bed. You want some fun experiences on site and you want to have access to great, experiences offsite. Like this is the jumping off point. This is the place where if you're coming to a Trailborn, you know, You know, it's going to be a great market.

You know, there's going to be a lot of fun stuff to do. You know, it's going to be in a great location within that market. Um, and you're going to have everything there that you need. Um, and if you have kids, we have stuff for kids. Um, if you're traveling with friends or by yourself, there's going to be stuff for you to do as well.

So, um, that's, uh, that would be the pitch. Um, you know, I think. Tying this to your prior question in today, today, we are going into markets where there's already millions of people traveling. There's already guests that are going to these markets and saying, what is the best hotel product in this market today?

And we firmly believe that once Trailborn exists, like we're going to be the no brainer option in these markets. I think if we do our job longterm, what gets us really excited is. You know, 10 years down the road, we, we will be introducing people into markets that they may not have otherwise thought to travel to.

Um, so someone who's traveling to Wrightsville beach and has been going there for 10 years may get. You know, introduced to our brand today, but, um, 10 years from now, they might say, Hey, I really enjoyed my stay at Trailborne Rocky Mountains, and I want to go for another outdoor adventure trip with my family, where should I go next?

Let me go to the Trailborne website and see where they've opened up some new trail warrants. Um, and so that's, that's where we're headed. Um, we've got a lot of work to do to get there, but. Um, but that vision is pretty exciting.

Dan: before Covid I was at a independent lodging congress, um, confab or a get together, I don't remember. I think it was in New York at the William Bale maybe. And. There was this idea of like getting financing for, uh, for hotels, for independent hotels. And it was someone from one of the big hotel lenders. I don't know.

It was, it might've been someone, it could have been Deutsche Bank maybe. And I remember, I forget his name, but he, and if it wasn't, I forgive, or forgive me. Uh, but I remember him saying something that, you know, flag is not important for debt. anymore. Um, if you have a real, if you have a good vision, an operating business, you know, uh, and a, and a track record, we can make it happen.

It wasn't like a box. You had to check as much anymore, but now having just gone to Alice American Lodging Investment Summit in, um, January, um, it seemed to be like, Oh, flags are important again, or maybe they always were important. Um, how are, how are you finding that out there? I know debt markets are really tough right now.

Uh, but like, how are you finding that as. As your own vertically integrated company.

Ben: Yeah, I think that from a lender perspective, you know, similar to equity investors, lenders have many deals coming across their desks every single day and they don't have time, neither would any of the three of us, to dig into every single one. And so, Oftentimes, independent assets are, appear to be more complicated, um, and more risky than a flagged asset when they are not. Um, and the reason for that is that a lot of these independent assets are in really attractive locations where the real estate is actually a much higher quality than some of the flagged assets. Now, let's I don't want to make generalizations about flags versus independence. There's thousands of independence and flags across the country that are different in nature, but there's, you know, been a better understanding over the course of the last 10 years.

And certainly in the last three around what is the real estate and what is the cashflow potential? Not just, is this a flag where you can turn on the distribution system? Now those distribution systems are Incredibly powerful. Um, there's no question about that, but the brand that sits next to them are very different and don't feel anything like what most independent hotels are offering or, or which are ones offering.

Dan: Mike, from your perspective, you know, having worked at Goldman Sachs and been, you know, being a finance guy, um, now a hospitality guy, and I like how they both overlay, you know, I'm always intrigued by returns in the sense that, okay, if you buy an index fund, it's a hundred percent liquid. You know, over time, it's, you know, you get an 8 percent return.

You get a multifamily, you know, you're like a 15 or 16 percent return. Uh, hospitality is usually North of that. And I guess it's like correlated to risk. Um, how do you find hospitality returns in general as like a benchmark or a spectrum, and then for the projects that you're doing with the longer timeline, like where do they sit in that spectrum?

Mike: Yeah, well, I'll tell you kind of how we think about our underwritings and Ben can chime, chime in here as well, but everything that we focused on is on, on levered yields. Um, that is, you know, we, especially in an environment like today, you know, we, we always come back to what is the unlevered yield that we are building to, um, and everything outside of that is sort of noise.

Um, we look at other metrics, um, as, as benchmarks and as indicators, but if you're not generating a double digit unlevered yield, it's, it's not an interesting deal to us, regardless of what, The dollar per key is regardless of what the levered ROI is. Like we, we, we just, we're not focused on anything but on levered yields. I'll let Ben, I'll let Ben jump in as well.

Ben: Yeah, Dan, I think, you know, for us, um, as we think about kind of real estate value, investing, being our DNA and kind of being very much how we focus and approach this strategy, stabilize on every yield of cost, um, Is the metric to us that tells us with the most clarity and the most simplicity, are we creating value? Are we transforming assets? And are we delivering an outsized risk adjusted return and yield just starting with yield that is commensurate with the additional risk that's being taken, um, depending on what type of project is, whether there's renovation risk or kind of cashflow uplift, uplift risk, but You know, you talked about certain benchmarks that, that you look at as a relation of return and for our investors, what we, our job is to make sure that they're getting that spread, that they're getting that excess alpha in return, um, to ensure that they feel over time and they see over time how we track versus the benchmarks and that we outperform based on the additional risks that we're taking versus, you know, a corporate bond.

Dan: Uh, thank you. I'm intrigued to get more into conversations about this as. Again, coming from Alice. Um, One of the data points I heard, and I don't know if it's true or not, but they said in this calendar year, there will be more hotel assets bought and sold than any other calendar year in the past. So I think for myself, my own curiosity, but also for the listeners, it's like, it's really cool to talk about this and normally.

It doesn't come up in this conversation. So thank you for letting me fumble along and ask some slightly more or slightly different questions than I usually ask. bring us back to the time that you met and that light bulb moment. Um, if you guys were both sitting there in that room, the light bulb goes off the two of you.

Now that I'm talking to you, if you could go back to those two, when the light bulb went off, um, what advice would you give yourself? Ben, you can go first.

Ben: The number one thing I would say is the power of high quality people. Is despite how often it is talked about, despite how cliche it might feel, despite how focused people are on it, it is still mispriced and misunderstood. And the difference in outcomes and journey with remarkably high quality people versus people who are a step behind that is astronomically different. Um, And astronomically impacts outcomes in ways that you can't possibly imagine or expect. And compromising on people, um, is the, the thing that you want to stay sort of furthest away from. Um, we're extremely proud of our team, um, that we have today. Um, but at that point in time, I, I, I wish that, uh, that, uh, maybe if I had to go back, I would have told myself that.

Dan: That's awesome. Yeah, I totally agree. It's all about people and um, how you recruit, train, and, and engage and keep people is like, it's not magic, but it requires a lot of work, effort, attention, and systems and processes and communication all around it. So I totally agree. Um, Mike, what about you? Go back to that light bulb moment.

You're sitting there with Ben. Uh, you magically appear in front of yourself now, like what advice do you have for yourself?

Mike: I mean, I think, I think Ben, Ben nailed the number one. I think the, the, the second thing I would say is guys, Mike, Ben, you guys are taking a lot on, you guys are, are building a lot. You are renovating a lot of projects at once. Um, and you're trying to do a lot and my advice wouldn't be, don't do that because I still think it's the right strategy, but my advice might be something like.

Maybe give your friends and your wives a heads up that you're going to be pretty busy for the next couple of years and you'll see more of them, uh, uh, later on, but, um, that, that's kind of the advice is would be just like acknowledge how much you're taking on and, and what, uh, what that's going to entail.

Dan: Awesome. Uh, well, I'm super excited for you guys to get more properties open and prove your success over and over. And, um, this has been just really a wonderful and enlightening conversation for me and I'm sure our listeners. Um, if people wanted to learn more about Castle Peak, Trailborne, or you guys, how do they do it?

Mike: Um, easiest, easiest place to get more information is on our websites, staytrailborn. com and castlepeakholdings. com. Um, and then you could follow along on our Instagram handle. Our handle is at State Trailborne. Um, and you can find all of our LinkedIn's and everything else from those places.

Dan: Fantastic. Um, well, I know how busy you guys are building a company, building teams, finding properties, keeping investors happy, making memories for guests and like, and, and building an incredible team. So I just want to say for myself, I'm grateful and very appreciative that you had the time to invest in all of us here.

Um, and thank you.

Mike: Thank you, Dan. This was great. I enjoyed it.

Dan: Uh, and I'd be remiss without thanking our listeners, uh, without you, we wouldn't be here talking to these awesome entrepreneurs building great companies and making memories for others. So if this changed your idea of hospitality, please be sure to, uh, pass it along.

Thank you.