Defining Hospitality

DH - Scott Roby
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scott_1_09-29-2025_121555: [00:00:00] what are we in control of? And let's focus on that. So forget the headwinds. Forget if RevPAR is flat. Are we the best operators? Are we taking care of our team members? Are we taking care of the guests? Uh, are we keeping the hotel clean? Are we keeping it well maintained even if capital hasn't been invested?

Speaker: What I do is inconsequential. Why I do what I do is I get to shorten people's journeys every day. What I love about our hospitality industry is that it's our mission to make people feel cared for while on their journeys. Together we'll explore what hospitality means in the built environment, in business, and in our daily lives.

I'm Dan Ryan, and this is Defining Hospitality.

This podcast is sponsored by Berman Fall Hospitality Group, a design-driven furniture manufacturer who specializes in custom case goods and seating for hotel guest rooms.

dan-ryan_16_09-29-2025_151555: Today's guest is a passionate leader with over 25 years of experience in hotel revenue and [00:01:00] operations. He's an entrepreneur who founded a consulting company called Storyteller Hospitality, and who previously co-founded Evolution Hospitality. He's also a frequent hospitality guest lecturer at universities throughout Southern California.

He's currently the president at Pacifica Hotels. Ladies and gentlemen, welcome Scott Roby. Welcome, Scott.

scott_1_09-29-2025_121555: Thank you, Dan. Excited to be on with you.

dan-ryan_16_09-29-2025_151555: I'm so excited to have you on here as well, and mostly, well, it's just exciting to have a president of a, of a hotel, um, of a hotel company on the podcast because I think you give a much different. Perspective on the state of the Union as it will because you are dealing with not only so many properties and so many channels of business within those properties and people, what I'm really excited about having you on board as well, is you are managing and running a hotel company in California, which is [00:02:00] arguably one of the more difficult states to run a hospitality company in.

And we read about it all the time. And having gone to college in, in California, it's very, it's, it is a difficult place. And if you can do it well there, it's kind of like in New York, New York, if you can make it there, you can make it anywhere. Um, it's just exciting to have you on because we all read about California and you know.

It's a difficult place, but it's also the fourth largest economy in the world, and it is one of the greatest places to live, having spent nearly half of my life there as well. Um, so I'm eager to get your take on the state of the Union or the state of the state, um, as it pertains to hospitality, but also, you know, just hear your experience and kind of hear what you're hearing and see.

And especially Uh, the lodging conference is about to happen next week. So I think everyone's out there talking. I can't wait to hear. Uh, I love sitting in the front row and [00:03:00] hearing what all the speakers have to say and, and all the prognostications of the future. But I'd love to hear as we get into this, just what your view on the state of the state is and the state of hospitality and why you love it.

And before we get into that, what does hospitality mean to you, Scott?

scott_1_09-29-2025_121555: So hospitality to me is the art of building relationships through storytelling and placemaking, whether it be with team members or guests, it doesn't really matter. It's uh, it's all about making people feel safe, seen, heard. And if we can do that for our team members at the management company level, and we can model that kind of behavior, they can turn around and take care of our guests in that same way. And so that's really what I view, uh, as hospitality.

dan-ryan_16_09-29-2025_151555: Thank you. And then just to give ev our listeners a, a, kind of a, a scope of your purview. Tell us a little bit about Pacifica [00:04:00] and how many properties you own versus third party manage generally where they're located. I think I spoiled the surprise there that most of them are in California, but just give us a, a high level of what you do and what, what your role is at Pacifica.

scott_1_09-29-2025_121555: so hotels covering the entire coast of California, we also have a great property in Hawaii, uh, where we have our presence there. Um, so really a great management company. The family, the marquee family owns two thirds of our portfolio, uh, and the balance are third party operated. Uh, so whether they be for a small family that owns one hotel and it's their only hospitality asset, uh, to some of the biggest names in hospitality, REITs and private equity.

dan-ryan_16_09-29-2025_151555: and how many properties is that total?

scott_1_09-29-2025_121555: So we have 30 hotels in the portfolio currently.

dan-ryan_16_09-29-2025_151555: Oh, that makes the math easy. So 10 are third party and 20 are wholly owned and managed.

scott_1_09-29-2025_121555: That's right.

dan-ryan_16_09-29-2025_151555: Um, [00:05:00] is that an unusual mix to have one third of the properties in your portfolio that you manage be third party and, because I actually, I, I don't know.

scott_1_09-29-2025_121555: Yeah, I think there are a lot of families that, you know, come from this owner operator space that have thought about and put some effort against growing. Uh, you know, they look at it, they say, we have this platform, we have the technology, we have the people, uh, that are managing our hotels so we can go out and we can manage for other people. Um, I think probably typically you either have a third party manager or you have an owner operator. Um, but there are quite a few of us that I think play in this space between owner operator and third party manager.

dan-ryan_16_09-29-2025_151555: Wow. And then but having third party and wholly owned, it must be a challenge to think about how to optimize each of these properties, especially as [00:06:00] an allocator of capital and how you reinvest in properties. Because with your wholly owned ones, you know what needs to get done and. Y you, you s like, you know what your capital stack is looking like and what you need and how you need to allocate it, but with a third party managed, sometimes you don't have that tra transparency or maybe the will of the third party owner to want to, um, allocate capital in an uncertain environment.

So how do you look through the lenses of those two different kind of mindsets?

scott_1_09-29-2025_121555: First off, I think it gives us outsized advantage to the typical third party managers to have 20% or 20 of our hotels, uh, to be owned. We have this mindset and we are in conversations shoulder to shoulder with the owner to understand the capital stack and understand how they deploy capital. So we can take that knowledge that perhaps a normal third party manager doesn't have, and we can [00:07:00] apply that to our relationships with our other owners. Um, as far as allocating capital in an uncertain time, uh, I think that that's true across. Any ownership group, whether it's our owned assets or our third party assets, everybody is looking at what is the short-term investment?

What is the long-term investment? Are we gonna get these dollars back that we spend? And so we just have fruitful conversations, uh, with our owner. We look for ROI projects, uh, that we can present to them, uh, but we also help show them, you know, is either keeping up with the Joneses or this is what's gonna set us apart in a competitive set and enable us to outperform the competition.

dan-ryan_16_09-29-2025_151555: And then I would imagine as California being the fourth largest economy in the world. And then if you were to look at travel and Leisure, the segment in California, and then say how much re revenue that is in California, I would assume it's [00:08:00] not one 50th of the United States. Total pie of travel and leisure, I would assume it's probably more like a 10th or somewhere between a 10th and a 20th.

But I don't know the math, and I'm not an economist, but if you were to think about next week when everyone is in Phoenix for the lodging conference, I think that you're a pretty good bellwether and you have your finger on the pulse of travel and leisure. For California, and I would also say by outsize weight the rest of the United States.

What do you think the forward looking economists or soothsayers are gonna say about the state of hospitality over the next 12 to 24 months? When we're, when I'm in Phoenix next week?

scott_1_09-29-2025_121555: Yeah, I, I think it's so interesting because we've both been at these conferences for years and everybody says, okay, well, year is gonna be the one where we start talking about optimism, and we've seen the [00:09:00] turnaround, or we see it right around the corner, and it just seems like the last. It like four years, five years, everybody's come out of it the same way.

You know, there is cautious optimism, maybe even a little pessimism. don't know that we're gonna see a lot of differences. The fed cut rates recently, um, you know, we expect one or two more cuts, coming in front of us, but I believe everybody's baked that into all of their thesis, uh, for how they're gonna approach their next steps in acquisitions, dispositions, capital investment. I frankly expect this conference to be more of the same. Uh, you know, it's great news that, uh, the stock market is at an all time high, but it does not feel that that is translating to consumer confidence, getting more people out on the road, getting more people, uh, either as leisure or more companies sending more business travelers out on the road. Uh, it's been a very stagnant [00:10:00] RevPAR year for the country.

dan-ryan_16_09-29-2025_151555: Hmm.

Now I wanna dig into those headwinds a little bit more in a couple minutes, but one of the things that struck me about speaking to you as, as much as the, it's, there's a stagnant in environment, if you will, and in some cases I would say many areas declining because of international travel. Everything else.

When I was speaking to you previously, the idea when I asked you about the people and the teams and the leadership that you've built and are, and are always growing and recruiting and the teams that you have across your portfolio and at the management level, you really lit up. And how do you think that the recruitment, selection, retention of those high level managers are a way to kind of slice through the malaise of just the stagnation?

How, how much effort do you as Scott, but also as Pacifica put into [00:11:00] finding the right people?

scott_1_09-29-2025_121555: I mean, if, if we go back to how I defined hospitality at the top of the show, right? It is all about how we take care of people, how we build relationships, a, a hotel management company. Is its people, like the quality of the company is first and foremost about the people that they have on their team and how they're leading and inspiring the hotel teams. Uh, so we focus all of our energy on how do we attract, recruit, retain the absolute best talent here in California. you know, if we can win that game, then we are going to have outsized performance. We're gonna increase, uh, people's longevity with the company. We continue to talk about learning and development, uh, and, you know, expanding our focus in that area to make sure that we're training and developing the people that we have on the team from [00:12:00] line level team members all the way throughout our corporate staff.

So, um, you know, it is what this business is all about.

dan-ryan_16_09-29-2025_151555: Hmm. Um, one of the things that I'm seeing as a supplier to the hotel world of furniture predominantly is. Just uncertainty. Um, whether it's high interest rates or tariffs currently or increased construction costs, hotels for a new development or a renovation, it's all about ROI and all of this uncertainty and costly uncertainty in many cases, um, is a real headwind there.

And, but what I'd also say is that we can all deal with headwinds. Like as difficult as California is to manage a business. If you manage a business well in California, you're doing something really well. And I would, my thesis right now is, okay, we have all this uncertainty and for me, specifically on the terra front.

[00:13:00] It's not the end of the world. We just need to know what it is and stop moving the goalposts. But I also think that if you can manage through that, through the messy middle, as a previous guest talked about it, um, when everything is stabilized and nothing is ever stabilized forever, I think that the team, the people, the company, the allocations of capital become all the more successful.

Um, how do you respond to that thesis on my, from my mouth to your ears?

scott_1_09-29-2025_121555: Well, I think a few things. You know, first off, we've gotta focus on what we're in control of, right? We're in the state of California. We've chosen to do business here. I think we're in a great state, uh, you know, look legislative, uh, perspective. have a ton of headwinds that go against specifically the hotel industry. Uh, you know, the state of California passed a fast food minimum wage, uh, that's in effect here. Um, but all of the [00:14:00] local ordinances have been laser focused on the hotel business. you know, if you look at living wages that would go across industries. O okay. I'm open to talking about that. I just think it's so interesting, uh, that all of these have been laser focused on hotels now expanding slightly to convention centers and arenas, but there's very little talk about living wage in California and it's more what are we doing for the hotel workers? Um, and so, you know, it's. not the easiest state to do business in, but to your point, if we can do it here, we're very confident. It's a transferable skillset. Um, and frankly, a lot of these ordinances are up in Portland and up in Seattle as well. So, you know, we know we're going to be able to expand throughout the West coast and apply our learnings here. But going back to, you know, our focus on what are we in control of? And let's focus on that. So [00:15:00] forget the headwinds. Forget if RevPAR is flat. Are we the best operators? Are we taking care of our team members? Are we taking care of the guests? Uh, are we keeping the hotel clean? Are we keeping it well maintained even if capital hasn't been invested? it's up to us to partner with the owners and show that we have an ownership mentality. We understand return on investment, and we understand that you can't just, you know, go to an owner and say, we think you should spend $5 million on this hotel without a follow up of, and here is what we believe it's going to get. You know, we've fallen behind on the STAR report. We're gonna get that share back, or we're gonna exceed our previous share. We need to be very specific about what our business plan is and what we think those capital dollars can induce.

dan-ryan_16_09-29-2025_151555: Uh, great. And then sounds like. The Serenity Prayer, right? It's like Grammy, the serenity to accept the things I cannot change, the courage to change the things, things I can, and the wisdom to [00:16:00] know the difference. That is very wise, and I think if I shift it back over to, to the business plan and the 30 hotels that you have, whether you're two thirds owned, one third, uh, third party, how do you, how do you at Pacifica differentiate, differentiate yourself in the crowded marketplace of California and Hawaii and wherever else you are.

scott_1_09-29-2025_121555: Yeah, I mean, look, I, I think again, first and foremost, we think that we have a solid culture and that we do hire. And retain the best talent. we are based here. There have been a few of our competitors that have been acquired by out-of-state companies. You know, their home office is now, uh, in other states.

And so we think that we have a unique advantage being based here in Orange County, uh, the entirety of our team, uh, offices out of our Orange County office, or in one of our [00:17:00] markets. Um, so, you know, we think that that is a competitive advantage and the fact that we're on top of all these different ordinances and the labor pieces, and think about it differently, right?

We came from a boutique independent background. I think that gives an operator a little more gumption than, uh, just coming from the branded world. We can apply that knowledge to the brands. We love the soft brand space. We're a big operator of Tapestry hotels by Hilton. Uh, we also operate hard brand hotels for, uh, multiple brands. And, you know, we can apply our entrepreneurial independent thinking in that brand space. And honestly, we can take the learnings of our brand operations and apply that, uh, back to our independent hotels. So we have this nice kind of diverse portfolio of types of hotels, size of hotels, geographic locations of hotels, and I think all of that makes us stronger. Um, but [00:18:00] we also have these pockets where we've been operating for decades and we know these markets like the back of our hands. We know the customers in them, uh, and we know what's worked and what hasn't worked in the past.

dan-ryan_16_09-29-2025_151555: I love that you used the word entrepreneur in what you just said, and having started two companies in your past and having been an entrepreneur, and I believe we're all entrepreneurs because we're just trying to make something happen with limited resources, right? We all have limited resources, but what do you think?

Being an entrepreneur on your own has taught you as you've stepped into a leadership role in this larger company?

scott_1_09-29-2025_121555: Yeah, I, I think just moving fast, um, and not letting roadblocks or hurdles get in the way. Like there's only one way through it. And, and that's to keep moving. And so I think just to have attitude of, we we're going to be successful, we're [00:19:00] going to continue to improve every single day, we're gonna make it better. And if we can do that, then we're going to

dan-ryan_16_09-29-2025_151555: I.

scott_1_09-29-2025_121555: And so I think taking that, you know, Hey, I'm willing to do anything and everything, when you're an entrepreneur, you know, you're the president, you are the, you're, you're housekeeper, you're ordering, you know, you're doing everything. And so I think to be that jack of all trades and to be willing to do all pieces of it, um, but to set a goal and to go get it and not let things get in.

dan-ryan_16_09-29-2025_151555: Uh, one of the things that surprised me from an allocation of capital perspective and the communication around it is typically in the past, if there were the Olympics or the world fair or something big in a country or a state, there's a lot of talk about, a lot of prep, a lot of how do we get ahead of this and get everything up to par.

I have been re remarkably [00:20:00] surprised that the World Cup, which is coming to North America next year, we all see it coming, but I haven't heard that same. Excitement or commitment to allocate capital, to get everything up to speed in the markets where those games will be played in Mexico, the US and Canada.

Not withstanding, it's not just a US thing. Um, what are you seeing in advance of the World Cup and are you surprised? Am I just making this up or are you noticing that as well?

scott_1_09-29-2025_121555: No, I, I, I, I think you're onto something. I think the World Cup is interesting because it's dispersed demand generating events, right? Uh, even for the cities that have it, they may not have many games. They may have earlier round games. Um, it's quite dispersed. And so I think, at least in the World Cup situation here in the US versus an Olympics where it's primarily one city or one very small region, uh, people might get that [00:21:00] mindset more. Um, but I, I think it's more, um, a result of what the recent hotel economy has been like, um, and that there's just been this continued flat to slight growth. Um, and so. Owners are looking at and saying, okay, we may have this one pop, but is that going to be sustained? And so is it worth it for me to go and replace my ff and e?

Or, uh, do we need to do a soft goods renovation or are we still gonna get that World Cup business? you know, and it's, they're one time visitors and so do we really need to make the investment? I think there's a.

dan-ryan_16_09-29-2025_151555: Hmm. And I, uh, and I don't know if I would, yeah, maybe I would consider the World Cup like a micro trend, but then in hospitality we're also very sensitive to macro trends that we're seeing, um, in California and the, the broader market in general. What kind of. Market trends. Trends are what are the biggest [00:22:00] market trends that you're seeing that are, might be these headwinds, and then what signals do you watch as a leader for when the green shoots start to come?

scott_1_09-29-2025_121555: Yeah, I think California. Look, it's a great state. I have lived here my whole life. I love it here. Um, I think from a hospitality perspective, we have so much going for us. We have a ton of diverse destinations within our state. We obviously have the beaches, we have the mountains. You can go skiing, you can live the lake life.

You can go to the desert, national parks, state parks, um, cities. I mean, there is so much to do here. And obviously with our population base and the draw of nearby states like Arizona, where, you know, it can get to 115 degrees. Hopefully it's not that hot when we're out there next week. Um, but you know, we have great drive to. Demand, uh, which is tremendous. So when we get in a world where consumer confidence might be lower, [00:23:00] uh, we really lean into the fact that people are going to maybe not take that plane trip, but they're gonna put the family in the car and go on one of these epic road trips that California has to offer. I, I look at everything we have to offer in California is a great plus.

Now the downside is, you know, we've had Highway one closed for years. Uh, so you can no longer do the very traditional almost bucket list item of driving the entire coast of California along Highway one. You've got hop off and, know, kind of go around. It's still an, an epic adventure. we're excited to see the reopening is slated for, uh, March of next year.

That's gonna be a huge. Generator of demand for us along the central coast. Um, but we've also taken our lumps too, right? When the fires occurred in Los Angeles, um, it really, really came across as Los Angeles is closed for business, much like Maui felt, um, you know, during the [00:24:00] Lahaina fire. So that part is difficult when the news media really focuses in on that, and it, it turns a market into this no visit destination for a period of time. California is prone, it seems, you know, maybe Florida, California are prone to more natural disasters, fires, floods, rains, uh, earthquakes, things of that nature. And so, you know, those to me are the headwinds of how can we, how can we push through those things. Um, you know, same thing when we had the demonstrations in LA earlier this year.

Um, just a lot of bad press about. You know, don't go to la. Um, when it was a pretty confined area that that activity was occurring in. So those are things that are difficult that we've just gotta manage through and we've gotta work with our D os to get the word out that no LA is not closed. It's an amazing place. Um, and we're open for business.

dan-ryan_16_09-29-2025_151555: I was in Los Angeles [00:25:00] during the height of that, flew in, drove to downtown, drove out to the South Bay, went up to Hollywood, and I saw nothing.

scott_1_09-29-2025_121555: Mm-hmm.

dan-ryan_16_09-29-2025_151555: Nothing. And it is amazing how asymmetric the news is at reporting. I guess it always goes back to as far as I can. I just remember studying in history class, like even I think it was called like yellow journalism around the Spanish American War.

Just if it bleeds, it leads right that old newspaper term, 'cause they would sell the most newspapers I guess, rather than newspapers. Now we're just dealing with clicks. But I just remember being shocked and I was like, wow, I feel like LA is falling into the Pacific Ocean right now. But then, then driving like all around it, doing the grand tour, I was like, I see nothing.

scott_1_09-29-2025_121555: Yeah, yeah. It's, um, you know, not, uh, I guess as profitable to report, you know, Hey, look at all the great things going on in LA and reasons to [00:26:00] visit. Obviously that'd be self-serving, uh, if that was the news story. But yeah, it's, it's obviously sensationalism and, you know, people are focused on, you know, unfortunately seeing the downside or the tragedy in this situation.

dan-ryan_16_09-29-2025_151555: Hmm. Uh, and I don't, I don't wanna say, and, and by me sharing that I'm by no means saying that it wasn't happening. But it

scott_1_09-29-2025_121555: Right.

dan-ryan_16_09-29-2025_151555: ha it was not happening all over Los Angeles in the way that I was led to believe it was. And,

scott_1_09-29-2025_121555: No,

dan-ryan_16_09-29-2025_151555: yeah.

scott_1_09-29-2025_121555: hor horrific, obviously, we,

dan-ryan_16_09-29-2025_151555: Yes.

scott_1_09-29-2025_121555: we had team members and friends and people that we obviously love and respect that lost their homes and an absolute tragic situation. But, you know, more of the focus on how does the news portray it. Um, you know, as far as an impact, going further, going over a longer period of time.

dan-ryan_16_09-29-2025_151555: So, having shared kind of many of the headwinds that we, that. That we all read about and are experiencing. Um, again, going back [00:27:00] to where you would light up in our initial conversations about getting the right people, rowing in the right direction and attracting and retaining and recruiting from as, as a entrepreneur and now leader in a larger company.

Um, how do you attract the best and the brightest and not only attract, but also retain high caliber talent? Like what's your leadership style and how much time in your week do you dedicate to finding, retaining at Yeah, I guess finding and retaining the right people.

scott_1_09-29-2025_121555: Yeah, so I, I think it starts with, you know, having a clear vision, right? Setting that vision and being able to articulate that vision, right? You, you've gotta sell to the team or to people that are going to join the team. You know, what are we doing here? Why is it special? What's your role going to be in it? what can you expect from me? What can you expect from the company? [00:28:00] so we set those expectations upfront, and then we've gotta hold ourselves accountable to delivering on those expectations. So if I share with somebody, you know, we're gonna give you a great technology stack to work within, it's highly differentiated. Or here's how we treat people in our company. they join, and then that's not the experience that they have, obviously that's not going to lead to retaining them. It's not gonna lead to them telling. They're also highly capable, highly respected, you know, industry counterparts to come join the company.

So we need to set the vision, we need to set the expectation, need to make sure everybody's trained, uh, to deliver on that expectation. And then we can hold people accountable to that expectation, myself included. So, you know, but. I that that's one piece. Um, and then I would say highly collaborative.

You know, as far as my leadership style of [00:29:00] how, how do I spend time? You know, I spent a lot of time when I was first onboarding, you know, just doing round tables with people and just hearing the voice of our internal customer, what's going great? What do you wanna make sure I don't mess up here? Um, but what are some hurdles?

What are some frustrations? What are things that get you down or slow you down? Um, and so from that we acted very, very quickly on many things that came off of that list of things that were points of frustration. if you can do that, whether it's for your housekeeper or for an executive at the home office, if you can listen, ask great questions and act on the feedback that you're getting. Showing Again, we're making this better. We're taking steps to make it better every day. Um, then I think that builds

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: see you're out there hustling and then therefore they're gonna be out there hustling.

Speaker 2: Hey, everybody. We've been doing this podcast for over three years now, and one of the [00:30:00] themes that consistently comes up is sustainability, and I'm just really proud to announce that our sponsor, Berman Fall Hospitality Group is the first within our hospitality industry to switch to sustainable and recyclable packaging, eliminating the use of styrofoam.

Please check out their impact page in the show notes for more info.

dan-ryan_16_09-29-2025_151555: I think a lot of that as a leader also has to do with making it okay for people to share where they're stuck or what could make their job better. Because oftentimes I've found, in my experience, people don't want to share that vulnerability because they think it makes them a less optimal employee or however you want to call it.

But as a leader, and I, I, I would assume you would agree with me, if you can get the people to share where they're stuck, oftentimes leaders and managers are able to solve those stocks very easily [00:31:00] and. Without a lot of capital or effort or initiative behind it. It's just like, oh, usually it's a communication thing.

And do you agree with my sentiments there? And have you ever had a light bulb moment around that? I.

scott_1_09-29-2025_121555: Yeah, I think two things on that first off is, you know, I am, I'm very open, uh, like I am willing to say I messed up or I did something wrong, or I'm struggling with something. You know, I was up, joined a mid-level manager training class that we were doing, uh, development class, uh, last week in Los Angeles.

And, you know, I just joined and kind of had some off the cuff comments. But, you know, I found myself telling stories about, you know, how I am as a dad and like, you know, the things I talk about with my kids, you know, because it applies to what we were talking about. I, I think that that, you know, made people sort of sit back and like, [00:32:00] oh, well he is not just the president of the company, he is also a dad, and, you know, he plays these other roles and so he's, he's like me. Um, and so if we can find those points of relationship, I think that that's super helpful. And we have to lead if we want them to be vulnerable, in my opinion, we need to be vulnerable as leaders. So that's one thing. And then the other piece is oftentimes I'll either ask the question repetitively if, you know, the initial answer is, no, we're good, we're good. Uh, you know, I did it in that class. You know, I kept asking was, you know, kind of a quiet group and I just kept asking. And then one more person would speak and I would ask the question again, then another person would speak. so either that or I also love focusing on one thing, right? What is one thing I can do to make your job better?

What is one thing we, one hurdle we can remove for you? Everybody has one thing.

dan-ryan_16_09-29-2025_151555: Mm-hmm.

scott_1_09-29-2025_121555: You know, a question of like, Hey, what can we fix? Or what can we make [00:33:00] better? You know, that might be too broad, but if we are focused on, hey, just gimme one thing, that seems like a smaller step for that individual to take. Like, oh yeah, I could probably tell them one thing that I would like to be changed or different.

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: a lot of time just focused on, Hey, what's one thing I can do for you? What's one hurdle I can remove for you?

dan-ryan_16_09-29-2025_151555: Yeah, I love that because it's not as open-ended of a question, and it's also in that vein. I also find it if you're reviewing someone or asking a a, a stakeholder or a client. About a specific thing is like, how would you rate whatever on a scale of one to 10 and whatever they give, whatever answer they give it, that number actually doesn't matter.

The real one is, well, what would make it a 10? Right? It's, it's, it's refocusing that question into a, a thing that, that can almost force a binary [00:34:00] answer. Um,

scott_1_09-29-2025_121555: just, it's getting people to feel comfortable to open up.

dan-ryan_16_09-29-2025_151555: you mentioned the technology stack before as far as that might have been a stuck for someone. Um, and that made me think, and again, I don't really know much about technology in hotels, but, um, what I do hear a lot about, and I was wondering maybe you could shed some light on it. If you talk to any of the technology providers in the hotel space, they all say that their big stuck is that hotels, um, are usually the last to adopt different technologies and.

I don't know why that is. I'm, and I'm very confused and perplexed by it because it would seem to me like each hotel could be a laboratory to try new tech stuff, but also, you know, you're, you're getting direct feedback kind of immediately from your guests as far as is it working or not, but do you agree with that sentiment that hotels are [00:35:00] typically late to the party when it comes to technology and then converting to new technology is difficult.

A and then B, why is that

scott_1_09-29-2025_121555: Yeah, I, I think that's just a historical issue. I think, yes, historically our industry has been poor at moving quickly on technology and if you talk to friends, you know, on the weekends about technology and what they're doing in that

dan-ryan_16_09-29-2025_151555: I.

scott_1_09-29-2025_121555: And then we think about what we're doing, the hotels, uh, I, I think it's been, you know, uh, we're trailing a decade or decade and a half behind it feels like sometimes. I do think that gap is closing though, right? As you know, more institutional investors have been involved in hotels and they have purview over other, in. And understand technology and how it can, uh, help us all be more efficient. So I think that's one thing. I think the other historical bias has been, it is a people business, right?

And hospitality was [00:36:00] about how can our people relate to our guests. Um, and so there was this hesitation to, you know, perhaps eshoo technology in favor of to person interactions.

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: And I think what we've learned hopefully in the last, you know, decade that technology can enable us and it can take some of the rote tasks off of our plate, um, and allow us to have even better relationships with our team members or better relationships and interactions with our guests.

It can enable us to better deliver on the guest expectation. So I think that we're shifting. In that space and it, it's gonna come down to we're now on this next wave with ai. Um, and so now the question is how will hotels respond and hotel companies respond to, you know, the power of ai? And can we maybe just jump on the bandwagon and ride it with all of the other industries, uh, as we all learn the power of [00:37:00] this, this next wave.

dan-ryan_16_09-29-2025_151555: Hmm. Yeah, there's so much AI talk, just like there was so much blockchain talk a couple years ago. Um, but I'm hopeful that while AI. Blockchain can make things more frictionless and easier. I'm still hopeful that at the certain level, especially with the portfolio of hotels that you have, the people who are going to these, whether it's leisure or bleisure or business travelers that choose to stay in a more soft branded, um, type hotel, like I think you said you had many tributes.

Um, it's a choice because they want that experience and they want those people at those properties. Is that just wishful thinking on my part?

scott_1_09-29-2025_121555: No, I don't think it's wishful. I think, again, it's about enablement,

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: So you know, if we can be an AI enabled company. We're not trying to replace the interactions and um, I think it's more how can [00:38:00] we get more strategic? How can we be more forward thinking? How can we, get to the next trend before, you know, it's, it's less, uh, you know, the trend has passed. So I think about AI is a enablement tool to make us better at those individual interactions. So I hope that in our independent small central coast hotels, it enables us to know the guests better and to anticipate their needs or their desires before their asking us, um, you know, so we can really wow them during their stay.

And then when they consider their second trip or their next trip back destination, they're saying, no brainer. We wanna go back to.

dan-ryan_16_09-29-2025_151555: I wanna shift back to your, your portfolio of 20. Two thirds owned and one third or ten third party managed. As you look at with your ownership [00:39:00] lens, are you seeing deals out there now in this market? Um, and how do you approach those potential deals either to acquire or divest? Um, and number two, on the third party front, there's hundreds or thousands of hotel owners out there.

Um, what's your ideal target on the third party front? So I guess first is acquisition, disposition, opportunity. How do, like, what lens do you look through it? And second is on the third party front, what is a mutually beneficial type of relationship between you as a third party manager and the perfect type of client?

scott_1_09-29-2025_121555: Yeah, so I, I think first off, maybe going back to me coming on board, uh, this past December, it's almost a year that I've been on board, you know, really the marquees focus was how can they step out of the management business, [00:40:00] uh, and be more focused on real estate and other ventures that they have. And so, you know, we're, we're spending a lot of time and discussion around how do we create more separation between the ownership group and the management company. Um, and not to say that we won't always have an owner. Operator mentality. I think it suits us. I think it enables us to deliver better results for all of our owners. but we are spending time kind of separating that. And so the brothers are really, uh, they're the ones that are focused on, you know, their disposition acquisition strategy. Um, and I think right now it's a wait and see approach for most everybody. We'll probably hear more of that at lodging next week. Um, but you know, you're seeing some things come to market, um, and some, the bid ask is still too big of a spread. And, uh, so they're, they're not trading. And then there are some hotels that are trading, uh, at a reasonable discount.

But I think [00:41:00] there's just, right now everybody's focused on current portfolio. You know, refinancings perhaps. Capital allocation, um, things of that nature. But I would say acquisition, disposition, we'll see, um, we'll see if lodging, if the spirit is any different when we get out there next week. But my guess is it's, uh, it's really gonna be more of the same there. Um, and the second question is, you know, on an owner and how we align or who we think is optimal, you know, really we're looking for like-minded. Owners that believe in this idea that we're carrying forward, which is we really don't even wanna refer to us as a third party operator anymore. We really wanna look at ourselves as a management partner. Um, and so we're gonna be focused as we grow, um, on who are the like-minded hotel [00:42:00] owners that, you know, can challenge us, can help make us better, um, but that we can have a great relationship with. So, you know, there's, there's an easy way to erode a hotel management's culture, and that's to partner with the wrong owner or to pick up the wrong asset because it's, you know, fee income. And so we're really going to look at how can we make an impact at a specific asset? How can we make an impact in relation with a specific owner? And if we can make those two things, uh, pencil, then we're gonna go after that deal. But we are not gonna grow for growth sake. We're gonna be very focused, like I mentioned to you, we wanna be a regional, super regional player, really focus on Hawaii, California, Washington, Oregon. Uh, you know, maybe go a little bit east, but we don't want our people jumping on planes flying across the country. Uh, we wanna be focused and have market knowledge that we can apply and make these hotels perform [00:43:00] at their full potential.

dan-ryan_16_09-29-2025_151555: Mm.

scott_1_09-29-2025_121555: So I, I think getting owner alignment in the early discussion of, you know, when they're in an RFP for us to really understand what are your hopes for this asset?

What is important to you in a management relationship? and make sure we have alignment.

dan-ryan_16_09-29-2025_151555: There's not alignment or I think you said if you by, uh, partnering with a, with a quote, bad owner, I don't, you might not have used the word bad, but just not a good fit for you. And it's probably like based on values and culture, um, you kind of know it sometimes you know it too late once you're already working with them.

But how do you know as you're talking to owners out there when the light bulb goes off and you're like, this is a great value fit. This is a great culture fit. This needs to happen.

scott_1_09-29-2025_121555: Well, I think first off, you know, look, hospitality's a a small, well connected industry, I, I think we probably know [00:44:00] more about the owners or the operators. than we give ourselves credit for. And so to really, you know, mine that institutional knowledge of, Hey, has anybody worked with this owner before? Uh, where were the hurdles?

Where were the things that went really well? Um, but primarily to just set up a conversation and for us to have a series of really, you know, insightful questions around, Hey, when things have gotten difficult with your management company, what does that look like? Um, and try to get to the root of some of these issues, um, that we want to avoid.

So, you know, if we can have those hard conversations either before the honeymoon period, before the engagement, or during the honeymoon period, then when things get rocky, um, we can point back to, Hey, you know, we had this conversation and this is how we agreed that we're gonna solve and work through this.

So, uh, you know, but it goes back to. Hiring, retaining your [00:45:00] best talent, right? If we build this incredible culture, we deliver on those expectations that I told you about. Um, but then we have an owner that's yelling at them, you know, once a week on a phone call. Like you ask that individual, Hey, how's the culture of the company? say, I don't know what culture I'm getting yelled at every week. Not by an employee of the company, but by a, an owner that the company partnered with.

dan-ryan_16_09-29-2025_151555: Yeah.

scott_1_09-29-2025_121555: Extension we've selected that.

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: we've just, we've gotta be so careful, um. And life is too short for us to, to get into business with people that we're not aligned with.

It's not gonna be good for the owner, it's not gonna be good for the operating company. And so we just need to have honest dialogue about what is a fit, what is not a fit. Um, also need to look at the asset and say, can we be successful here? So if we get a lead for 30 room hotel that's in a remote destination that we don't have any presence in, are we really going to be able to [00:46:00] focus our time and effort, get there easily, and impact change? Like we need to be honest with ourselves. Like, Hey, owner, you probably need to either self-manage or you need to find a, a very local operator, uh, that can take care of this asset. It's just, it's not a good fit for us. So

dan-ryan_16_09-29-2025_151555: Hmm,

scott_1_09-29-2025_121555: at it as a bit of a point system of, you know, can we be successful at this asset?

And then when we think we can't, we've gotta go to the owner and bow out of that process.

dan-ryan_16_09-29-2025_151555: Hmm. Um, the follow on question to that one, thank you for that, those insights is having talked to and seen and experienced many different hotel ownership and development companies from established to just starting out, um, there seems to be this feeling or thought or strategy that, okay, I'm buying these assets.

I know them the best I can. I know the market, especially in [00:47:00] a startup situation where. Okay. I want to, I wanna self-manage these, right? It's kind of like a chicken egg situation. In order to do that, you need way more capital, way more people. Um, and it's difficult. It's not that it can't be done, I've seen it done.

That has been done successfully in many cases. But is there a point that it makes sense to consider doing your own management company or, and is it not necessarily a size or size of portfolio, or is it more of a, um, experience that you're trying to tie across each of them?

Like at, at what point do you make a decision or seriously look at starting your own management company to manage the assets that you have versus, okay, these are. Real estate investments and I want to have a third party manager do it because I think that there's a good fit because you know, oftentimes you always hear you, a third party manager isn't gonna manage this asset because they don't have the skin in the game.[00:48:00]

But walk me through your experience with that chicken and egg situation, and maybe even you can finish it with where did you, where did you come in when someone was deciding that chicken and egg and gave them a big, giant easy button?

scott_1_09-29-2025_121555: Yeah, I, I think it's a really interesting question. I've seen it kind of in both phases. I've seen it at the beginning where it's their first asset and they're like, oh, should we self-manage or should we, you know, just hand this over. And I've seen it when, you know, somebody's starting to get to critical mass, 12, 15 hotels, and they're starting to ask that question of, well, should we just bring this in-house? You know, I, I make fun in some of those conversations of, Hey, just because I've chosen a difficult corner of our business to, to work in and live in and spend all of my time and effort thinking about doesn't mean that you have to. Um, and hopefully if we can create this owner centric management partner company that we're talking about, [00:49:00] going to have that easy button for owners when they're either thinking of their first asset or they're getting the critical mass and they're considering pulling it back in house, I wouldn't advise any owner that's used to just managing real estate or assets, asset managing real estate focused on acquisitions, dispositions, capital to add the layer and the complexity of the hotel operation and the management of that, especially in the state of California. Uh, I don't know why somebody would want to do that. Maybe that's my jealousy of, you know, hmm, should I have the real estate side and, and not been on the operating side. But, um, it, it's a lot of time, energy, uh, brain damage, you know, mind though, for us, right? It's all worthwhile. I think the other piece of it is if we're focused on. Attracting and retaining the best [00:50:00] talent. of the things that we can give to our team members, especially here in California, is a range of hotels that they could move to and advance their career. to the extent that you're an owner that has, you know, 12 hotels and you're thinking about, uh, bringing it in-house, you're now limiting those career opportunities to those 12 hotels or to the extent you think you're gonna grow. Um, and if we can have a reasonably sized management company, um, that enables people to move throughout the state, advance their career, maybe move back home closer to family, whatever it is, you know, if we have more hotels, we're enable those activities and we're.

dan-ryan_16_09-29-2025_151555: Okay. Thank you. That really helped me understand that because it must be such a difficult decision, especially these could be huge investments for especially nascent hotel owners and they, they want to do the white [00:51:00] glove thing for themselves, but having that flexibility and having team members be able to advance vertically or horizontally for whatever reason, that's pretty compelling.

And also that idea of the 12 to 15 hotel, um, scale or critical mass is an interesting kind of rule of thumb. If you were to look out at all the hotel owners out there. In California or in your markets? California, west Coast, um, and Hawaii. Are all of the third party contracts, or most of them with owners who own less than 12 or to 15, or is it still in a, in a different mix?

I think in the beginning you said that there were some larger REITs there as well. So how, how do you look at that and bifurcate your ideal client?

scott_1_09-29-2025_121555: Yeah, I mean, look, we, we are successful managing for publicly traded REITs. We [00:52:00] are equally, um, fantastic at operating for a single hotel owner, family office, or even they don't have an office. It's just a family that has a hotel. Um, and we, we can do that equally as well. going back to the management conversation of do you bring it in-house or, or not, I think the reason people look to do it themselves at that point of 12 to 15 hotels is because they don't have confidence or they don't have a level of trust in their current partner, and so they're considering alternatives.

If I were an owner of 12 to 15 assets and I had a great relationship, high level of trust, and saw that the performance was going well, I don't think you spend a minute thinking about do we bring this in-house? Now, in, in my opinion, if you look at, you know, the fees are just, they're, they're small in the scheme of things, the work is disproportionate to that fee. [00:53:00] They can be spending time going and, and doing deals that will bring in, you know, three x four X their money versus, you know, investing time in managing the operation, which, you know, does not have that kind of leverage on capital.

dan-ryan_16_09-29-2025_151555: and I think in talking to you through here, it's not so much the leverage on capital. I mean, that is obviously a critical component, but it's really the leverage on people, right? And it and time. And those don't necessarily have an r, I mean, I guess you could argue that there is an ROI with people and time, but if you have a large enough as a management company, a large enough pool of people, you can save yourselves and those owners the most valuable of all assets, which is time.

Um

scott_1_09-29-2025_121555: And that's really, that's what we're trying to do for the marquees, right? I mean, they, they own 20 hotels. They were an owner operator. [00:54:00] They still operate as an owner operator even though there's also ten third party hotels.

dan-ryan_16_09-29-2025_151555: hmm.

scott_1_09-29-2025_121555: They've looked at that and they said, this is not the highest and best use of our time,

dan-ryan_16_09-29-2025_151555: Yeah.

scott_1_09-29-2025_121555: we can't get more time. So we need to look at this differently.

dan-ryan_16_09-29-2025_151555: imagine you're sitting there in the front row with me. We're, we're hearing the forecasts and everything else, um, no matter what they say. And as you look into 20, 26 and beyond, what for you and Pacifica is your financial vision for the future. And also I would say culture, cultural or values, vision for the future as a leader.

So looking, no matter what they say, looking to 2026 and beyond, what's your financial vision for the future, for you and Pacifica and cultural and um, or values, uh, vision for the future.

scott_1_09-29-2025_121555: Yeah, I, I think financial, we know it's going to be a difficult year in RevPAR [00:55:00] growth. Um, Smith travel at the hotel data conference, I think put up a slide, uh, that talked about the 2008 downturn, um, and then maybe going back to 2001 and they aligned the percentage or the number of markets that were now showing declining RevPAR.

dan-ryan_16_09-29-2025_151555: Hmm.

scott_1_09-29-2025_121555: Um, and that those lines actually follow quite. Interestingly to like the 2008 downturn. And so, you know, we're starting to see more markets where we are in a negative RevPAR situation. And no owner wants to sit at a budget table and say, oh, we're gonna budget down next year. but we are gonna have some hard conversations where we might be down or flat or, you know, up one or two points. We all know the expense, you know, load inflation and tariffs and all the things we've talked about. Um, and so, you know, expenses are gonna rise, you know, five, six, 8%. Um, and so we [00:56:00] know we're in a situation where revenues are, are in a tough situation for 2026 expenses are going up and so we've gotta be maniacal. About every dollar, dollar. We've gotta look at productivity metrics. We've gotta look at how we're ordering. Uh, we have to look at everything down to, you know, overtime and meal penalties here in the state of California and all of these dollars that, you know, we can recapture. We have to be maniacal. So I think on the financial side, I tell you that's the word we're gonna use.

We are gonna be maniacal and we're gonna budget that way, and we're gonna go get it. on the culture side, you know, we, we talk a lot about, you know, we're dynamic and we're driven here at Pacifica, but really the layer that we've talked most about recently is accountability. so we've gotta be accountability accountable to each other.

[00:57:00] We've gotta be accountable to our guests, to our owners. Um, and so just this culture of having direct dialogue, giving open feedback, what the challenges are. And pushing through and finding solutions, like we just need to wake up every day thinking about that and that we are all working to make the company and each other better and help the hotels and each individual on the teams reach their full potential.

dan-ryan_16_09-29-2025_151555: Awesome. Thank you for sharing that. And hopefully we will sit next to each other in the front row of one of the prognosticators telling us about the rosy future. I hope it's rosy. Every time I go it's always rosy. They never give bad news.

scott_1_09-29-2025_121555: Yeah. It's only in the hallways, you know, that you get the real story. So maybe, maybe spend less, less time in the front row, Dan, and more time in the hallways.

dan-ryan_16_09-29-2025_151555: Uh, I, it's so funny. I remember, um. It was 2020. The [00:58:00] conference will remain nameless. You know, it's hard for prognosticators to prognosticate, but I remember hearing one guy, one person say, um, you know, there's this virus in Asia right now. But, you know, our metrics in our industry are so strong that no matter what happens, um, all the fundamentals are great and it's just gonna be a little blip, and we're just gonna, we're gonna move forward.

And I will always remember that as nobody knows anything.

scott_1_09-29-2025_121555: That did not age well.

dan-ryan_16_09-29-2025_151555: It did not age well at all. But, but then, you know, it's also interesting to hear. You say, uh, from the RevPAR trends, it's similar to 2008. And so my worldview is always CapEx, mostly for renovation, um, [00:59:00] and new builds. But from 2008 till now, there has are less new builds that came on online. There was less new inventory added than in previous years before 2008.

Right. Um, but from a CapEx perspective on the renovation cycle, I just remember 2008 happened, there was work in progress that kind of finished up in 29, 10, but then from 10 to 12 maybe, and probably it was probably maybe from nine to 12 because it did start slowing down, um, in 2009 for us. But it just seemed like the velocity and.

A number of projects was so reduced for so long, and every year at these trade shows or conferences, I'd be like, God, when is it gonna pick up again? When is it gonna pick up again? And I just remember it took two years longer than I thought it would, um, before it got back to quote normal and then whatever the world threw at us next.

And I'm just, I'm just [01:00:00] wondering if this is rhyming with that time where, okay, so there is this lake of CapEx that needs to get done, but because of interest rates, labor costs, construction costs, tariffs, you name everything, there's a dam holding it back. And I don't know when that dam trips away. I think the heavy, the heaviest part of that dam is probably interest rates.

Um, but I don't know, is it. Q1? Probably not. Is it Q4 next year? Who knows? Is it going into the next year? I just don't know. And that's why I think I love the idea of being maniacal about costs overhead or ruthless about it, because I think this is where dollars count and we gotta preserve that oxygen.

scott_1_09-29-2025_121555: Yeah, I mean a hundred percent. And we owe it to ourselves and our owners to be the best operator, right? So, you know, being transparent, you know, if we're not paying invoices on time and we're taking late [01:01:00] fees, like that's gotta be the, the level of focus that we have of, okay, why did we pay that late invoice?

You know, what, where in the process did it break down? We've gotta go after every dollar. Like our life depends on it. 'cause honestly, for some of these owners, it does. I mean, any owner that's on a variable rate, uh, interest, you know, uh, variable rate mortgage right now.

dan-ryan_16_09-29-2025_151555: Oh, they're getting smoked. Yeah.

scott_1_09-29-2025_121555: tough situation. Every available dollar that we're pushing, you know, for cashflow is, is going to pay the increased interest rates.

So, you know, yes, that is the number one thing in my mind is as that comes down, that's going to free up capital, let's gonna help people breathe easier. Um, so we've gotta do that. But again, going back to what are we in control of? We've gotta go and find every dollar. So we've gotta negotiate every contract. Uh, we've gotta make sure that we're we're pennies and that we've got the right [01:02:00] people in the right place at the right time. But that we're not overstaffing, uh, and that we're really thoughtful to the new model. Right? So, you know, maybe traditional, you know, restaurant operations, you know, obviously look different today and most of the places that you go have hotels pivoted quickly enough in that space.

You know, that might be an opportunity. So we we need to do what's in our control to give these owners the absolute best chance at, at surviving.

dan-ryan_16_09-29-2025_151555: I love it. Um, and I, and I appreciate you and, and you coming on here and sharing your perspective. If people wanted to learn more about you, Scott or Pacifica Hotels, what's a good way for them to find you, aside from trying to bump into you or sitting next to you and me next week in, uh, in Phoenix, up in the front row?

What's a good way for them to get in touch?

scott_1_09-29-2025_121555: I, I love connecting on LinkedIn. So, you know, my personal profile on LinkedIn is great. I think our Pacifica hotels, uh, dot com website, [01:03:00] uh, is a great way to learn more about what we're doing. Uh, and you know, we're looking forward to getting the story out. You know, we've really spent this year building the foundation, solidifying the foundation, and we're excited to get out into the industry, you know, with a little bit more fervor and, uh, really make a splash in how we're thinking about management partnerships differently and, uh, how we could be a great partner for many of the owners out there.

dan-ryan_16_09-29-2025_151555: Love it. Thank you. Um, and thank you so much for your time. I know how busy you are being maniacal about watching all the dollars for all of your owners, so thank you for being on here and hopefully I'll see you next week.

scott_1_09-29-2025_121555: Absolutely. Dan, thanks for having me on. Really appreciate the conversation.

dan-ryan_16_09-29-2025_151555: me too. And thank you to all of our listeners. Without you, we wouldn't be getting insights from industry leaders such as Scott here. So please keep tuning in, please, like please subscribe and please pass this to anyone who you think could benefit from this perspective of hospitality. Please keep tuning in and we'll catch [01:04:00] you next time.