Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stenebek on Bloomberg Radio.
Speaker 2: People are going on vacation, folks. We are in the
Speaker 2: thick of summer. We heard from the US airlines too
Speaker 2: over the past week or so. United just yesterday, latest
Speaker 2: major US carrier to benefit from strength and global travel.
Speaker 1: Yeah, aren't you going overseas?
Speaker 3: I'm going to Spain next week.
Speaker 1: See, So everybody's on vacation.
Speaker 3: Not looking forward to it.
Speaker 4: Why so hot? Oh?
Speaker 1: I know, it's hot. It's yeah, it's going to be rough.
Speaker 3: I want to go to Alaska. Do you want to
Speaker 3: go to the Arctic right now? I need to be somewhere.
Speaker 4: Cool, Fyi.
Speaker 1: It's melting.
Speaker 3: Yeah, I know, but at least it's still chilly.
Speaker 2: All right, So let's get to it. Let's talk about vacationing,
Speaker 2: demand and pricing. I'm curious what our next guest to see.
Speaker 2: Montage International founder, chairman and CEO, Alan Firstman is with
Speaker 2: us on Zoom in Maui. Montage is a luxury hospital
Speaker 2: to that, but at a luxury hospitality management company.
Speaker 1: Try that again. It's got properties in California, Mexico, Bahamas
Speaker 1: and more.
Speaker 4: Alan.
Speaker 1: Nice to be talking with you again.
Speaker 3: How are you.
Speaker 1: I think it's been about a year. Talk about great.
Speaker 4: Great to be back.
Speaker 1: Well, great to have you. How busy are you? Guys?
Speaker 1: What are you seeing?
Speaker 4: We were We're in the middle of summer, busy summer.
Speaker 4: The resorts have been the place to escape the heat
Speaker 4: and enjoy the relaxation, seeing a lot of families traveling
Speaker 4: and an exciting time for us.
Speaker 3: So what's it like out there? I mean, I Hawaii
Speaker 3: is like a bucket list place for me. I've also
Speaker 3: seen Mawana like a thousand times.
Speaker 1: He has a young daughter, Maui.
Speaker 3: The name Maui has a special place in my heart.
Speaker 3: But it's hot here. I can't imagine wanting to go outside.
Speaker 3: What's it like there?
Speaker 4: Well, here, it's it's it's tropical beautiful. I mean, the
Speaker 4: beaches and the pools amazing. I'm here with five grandchildren
Speaker 4: and extended family. It's it's it's just a great opportunity
Speaker 4: to work a little bit in the more and relax
Speaker 4: and enjoy the afternoons with the family.
Speaker 1: But eighty one degrees, Matt, Oh, that's nice humidity.
Speaker 3: I'm just trying to get to what this heat wave
Speaker 3: and what these air quality issues. What kind of effect
Speaker 3: has that had on travel?
Speaker 4: Well, I mean there's an escape to markets that aren't
Speaker 4: as hot I would imagine, and it's important that those
Speaker 4: areas that are hot are taking all the necessary precautions
Speaker 4: to make sure the staff stays hydrated and there's plenty
Speaker 4: of water stations for guests. We've taken some additional steps
Speaker 4: of late to make sure that there's plenty of water everywhere.
Speaker 4: But hotels and resources are a good place generally to
Speaker 4: escape the heat.
Speaker 2: All right, So let's like we said, it's about a
Speaker 2: year since we last talked with you. Give me an idea.
Speaker 2: You say, great, everything is a good place to be,
Speaker 2: But give me an idea in terms of demand and pricing.
Speaker 1: What it's like.
Speaker 2: Is demand up from a year ago? Is it down
Speaker 2: from a year ago? What's pricing light? Is it a
Speaker 2: pricing like in terms of deals?
Speaker 3: Is I saw I will say, allan, we saw AMX today.
Speaker 3: They had record volumes, but since they had such difficult
Speaker 3: comps because last year was so great, the market was
Speaker 3: a little bit disappointed.
Speaker 4: Yeah, I think pricing might have has come down a
Speaker 4: little bit over the highs of last year when you
Speaker 4: think about so much of the luxury travel heading to
Speaker 4: Europe and other markets that have opened up that weren't
Speaker 4: available a year ago, but well above conditions pre pandemic.
Speaker 4: So we're seeing some relatively strong numbers still. So that's
Speaker 4: a very positive sign, and we're just seeing that there's
Speaker 4: continued demand for highly differentiated special places.
Speaker 2: What about for you guys specifically, right you're involved in
Speaker 2: the management of these properties. Do you have the workers
Speaker 2: you need or are you again having to pay up
Speaker 2: for them?
Speaker 4: Well, we've had to pay up. There's been certainly a
Speaker 4: rise in costs, and again it's been market by market.
Speaker 4: Some markets have been less difficult to attract labor, but
Speaker 4: it's an important component of what we do. You've seen though,
Speaker 4: part of the price increases that have been passed on
Speaker 4: to guests have come from the need to pay up
Speaker 4: both for wages and for cost of goods. There's that's
Speaker 4: been the story of the inflationary time period we've been
Speaker 4: going through. It's good to see it's settling down a
Speaker 4: little bit and we're somewhat optimistic that things will stabilize.
Speaker 4: We've had a very strong workforce fect we're in the
Speaker 4: process of opening Pendry Newport Beach, which is going to
Speaker 4: open in September, and we're hiring over four hundred new
Speaker 4: associates there and have had great success in attracting and
Speaker 4: finding superior talent.
Speaker 3: Are there any have trend shifted at all, you know,
Speaker 3: pre pandemic to now in terms of where people want
Speaker 3: to go, what they want to do, what they're budgeting.
Speaker 3: I mean, are they focused more on vacations, because certainly
Speaker 3: I think a lot of employees are focused more on
Speaker 3: life in the work life balance.
Speaker 4: Yeah, I think so, And I think the advent of
Speaker 4: being able to work remotely means doesn't mean working just
Speaker 4: remotely from home. Why not extend your stay at a
Speaker 4: vacation destination at longer and there's a lot of combination.
Speaker 4: I'll work a little bit, but I'll also be enjoying.
Speaker 4: So we're seeing longer length of stays as a result
Speaker 4: of the need not to get back to the office
Speaker 4: as promptly as we may have years a few years back.
Speaker 4: So that's been a plus for us being able to
Speaker 4: work from our hotels and resorts effectively.
Speaker 1: Ell where are people going?
Speaker 2: Because you guys have properties in Los Cabos, Mexico, obviously,
Speaker 2: in Hawaii where you guys are Utah, Laguna Beach, California.
Speaker 2: I know I'm leaving stuff out other places.
Speaker 4: Big Big Guy, Montana, for example, it's it's such a
Speaker 4: such a cool temperature wise and otherwise get away. And
Speaker 4: when we opened there a year ago, essentially the first
Speaker 4: luxury hotel in that market. It's opened up a new market.
Speaker 4: And and in the case of Big Sky, you're an
Speaker 4: hour from Yellowstone and you get to experience the park
Speaker 4: but also the luxury amenities, the outdoor lifestyle. So we're
Speaker 4: seeing some newer destinations like Big Sky Montana, and certainly
Speaker 4: great strength in in the other mountain destinations. We were
Speaker 4: in Deer Valley, we're in we have a penry in
Speaker 4: Park City, so good good breath across our portfolios. So
Speaker 4: we're seeing we're seeing strong travel throughout Big Skies.
Speaker 3: Also close to Bozeman, so it's an easy, uh drive
Speaker 3: from the airport. And I have to say, my family,
Speaker 3: we go skiing in Big Sky. Love that big backcountry.
Speaker 3: You know, nice off piece of powder, very cool.
Speaker 1: It looks gorgeous.
Speaker 3: Can I ask you, Unlus, you've got a very exclusive
Speaker 3: resort on the backside of the mountain. Sounds like Yellowstone.
Speaker 1: Okay, sold sold?
Speaker 2: Is it the in the Bahamas, there's a forty eight
Speaker 2: acre private island resort and community that I guess you
Speaker 2: can rent out.
Speaker 4: No, we're under construction there. We're building abbocos called Montage
Speaker 4: Key private Island. We're selling real estate there now homes,
Speaker 4: amazing homes on the on the ocean front, and building
Speaker 4: building the resort. Well, we should open the end of
Speaker 4: twenty four to early twenty five, and it will be
Speaker 4: an amazing destination, easily accessible the entire East Coast, and
Speaker 4: it'll be a truly global destination, very special resort under construction.
Speaker 3: Allen, what's the rates? How is the rates picture affected that?
Speaker 3: Because I when you say that, I think, well, I
Speaker 3: want to buy a house there, But then I realized
Speaker 3: I don't want a seven percent mortgage. I guess those
Speaker 3: people maybe pay cash.
Speaker 4: Yes, I think there's the buyer for that. Markets is
Speaker 4: less interest rates sensitive.
Speaker 2: Yeah, sorry, Matt, Hey, listen twenty years in that you
Speaker 2: guys are happy twentieth anniversary. What do you think about
Speaker 2: You talk about the you know, the development you're doing
Speaker 2: in the Bahamas, but how do you think about what's
Speaker 2: to come.
Speaker 3: The next twenty years.
Speaker 4: Now we've got fourteen hotels open today, seven montages and
Speaker 4: seven pendries, so we have the two luxury brands. We
Speaker 4: have another twelve projects that are either under construction or
Speaker 4: in design right now, and of those eight are pendries
Speaker 4: and four are montages. And we're seeing some real international growth.
Speaker 4: Initially we were mostly North America. Now we're expanding globally.
Speaker 4: We've announced a couple of projects in the Middle East.
Speaker 4: We've just announced two hotels in Puntomita, which is near
Speaker 4: Porta Villarta, Mexico, both a Montage and a Pendri there.
Speaker 4: We announced a project in Barbados. So I think you're
Speaker 4: going to continue to see both domestic and international growth
Speaker 4: for our company.
Speaker 2: Sounds like you're moving ahead. You're not worried about a recession.
Speaker 2: Are those higher rates?
Speaker 1: Is that fair? Just got about thirty seconds or tell me, yeah,
Speaker 1: we are.
Speaker 4: But high interst rates are concerning obviously for capitalizing new projects.
Speaker 4: It's obviously a big concern, and we're hopeful that we've
Speaker 4: seen the height of the interest rates. But we are
Speaker 4: very optimistic. We build hotels for generations to come, so
Speaker 4: we'll withstand small blips if they happen which are due
Speaker 4: to happen.
Speaker 3: So cool, you know, to think that a kid from
Speaker 3: New Milford could go to Gettysburg. Then he runs the Phoenician,
Speaker 3: then he runs the Bolagio, and now you found this
Speaker 3: great big business. I think it's a super a super cool,
Speaker 3: story inspiring dream.
Speaker 4: I've got to say how fortunate I've been and how
Speaker 4: I'm truly lucky.
Speaker 2: Well, enjoy Maui and always good to check in with you.
Speaker 2: Alan Firstman, founder, chairman and CEO of Montage International joining us,
Speaker 2: as we said from Hawaii,