Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. Back in May,
Speaker 1: Business Week Pursuits Travel editor Nicki Eckstein had a story
Speaker 1: that mentioned Virtue. Oh, so it's a global consortion for
Speaker 1: luxury travel specialists and have they were seeing a fifty
Speaker 1: percent increase from a year earlier in the number of
Speaker 1: people seeking its services. People, Tim wanted to travel and
Speaker 1: they wanted help in doing so. Yeah, it's not just us.
Speaker 1: We're ready to get out there. Take me away, Take
Speaker 1: me away, as long as our plane does in our
Speaker 1: flight doesn't get canceled. Right. Alan Firstman is the founder,
Speaker 1: chairman and CEO of Montage International. They've got properties all
Speaker 1: over and they're in the Bahamas, Laguna Beach, California, Deer
Speaker 1: Valley that's in Utah, Los Cabos, Mexico, and more. Alan
Speaker 1: Firstman joins us via zoom from Orange County, California. Allen,
Speaker 1: good to have you with us. How are you. I'm great, Tim, Thanks,
Speaker 1: it's a pleasure to be with you. Well, it's good
Speaker 1: to have you back with us. I We were reminded
Speaker 1: by producer Paul Brennan and my colleague Carol that you were.
Speaker 1: You were on with us years ago before the pandemic.
Speaker 1: It was before I even was doing this, and we
Speaker 1: just wanted had an update on what the last two
Speaker 1: and a half years have been like for you. Been well.
Speaker 1: FROST has been very exciting times. Obviously, COVID was traumatic UM,
Speaker 1: but we once once the vaccines UM we're prevalent. We
Speaker 1: saw a return to business levels and the last two
Speaker 1: years have been UM exceptionally strong for our company, with
Speaker 1: domestic resourts, luxury resorts, and the inability to travel to
Speaker 1: some of the global destinations. UM many the luxury consumers
Speaker 1: discovered us and we've seen just a tremendous increase in
Speaker 1: business and we've been particularly busy opening new hotels and resourts.
Speaker 1: Over an eighteen month period in the last couple of years,
Speaker 1: we opened six new hotels, both Montage and Pendry's. Wow. Wait,
Speaker 1: so take me back there from moment all and before
Speaker 1: we move on, so did you guys just did you
Speaker 1: have to shut down completely just because there was no
Speaker 1: travel happening for for for the first few months, UM
Speaker 1: virtually shutdown. There was some hotels, we had a residential
Speaker 1: component that we would operate UM barely UM. But it
Speaker 1: came to a to a stunning halt in in the
Speaker 1: in the early stages of COVID. Okay, and then it
Speaker 1: started to come back, certainly as vaccines came down. Because
Speaker 1: what's interesting is, I remember, you know, talking about everything
Speaker 1: shutting down. Then there were people who realized, Okay, I
Speaker 1: can't go back to the office for a while, I
Speaker 1: can work from anywhere in the world. Did you see
Speaker 1: any indications of that where people were like, well, if
Speaker 1: I'm going to be home, why didn't I go live
Speaker 1: somewhere else that's a lot prettier and nicer and maybe
Speaker 1: has an ocean view and I can work from there.
Speaker 1: Did any of that play out for you guys. Absolutely?
Speaker 1: And then we leaned into it and offered UM schooling
Speaker 1: for the kids that we're doing remote learning. You could
Speaker 1: be on vacation at Montage Palmental Bluff and we would
Speaker 1: set up UH mostly tutored, monitored study room for for
Speaker 1: kids to do their schooling. And you can combine vacation
Speaker 1: and and UM and either school work or work. And
Speaker 1: that's one of the things we're seeing in our industry
Speaker 1: with untethered working, so to speak. So you could um
Speaker 1: take a Monday or Friday or even midweek and and
Speaker 1: be productive and from from from a hotel suite or
Speaker 1: a room and um enjoy the best of both worlds.
Speaker 1: And I think that I think COVID accelerated people feeling
Speaker 1: comfortable doing that. Okay, so bring us up to speed
Speaker 1: now on on where you are. Because at the same time,
Speaker 1: with the hike and with the you know, increasing demand
Speaker 1: that we've been seeing when people wanted to get back out,
Speaker 1: at the same time, it's been tough for companies like
Speaker 1: yours to to find talent, to find the people to
Speaker 1: actually help staff these hotels these properties. Give us an
Speaker 1: update there. Yeah, Well, staffing has been from an industry perspective,
Speaker 1: the biggest challenge we've been But but it's it's it's
Speaker 1: not a um one size fits all problem. Some markets
Speaker 1: rebounded much more quickly than others. For example of going
Speaker 1: to Beach or our montharger is fully staff been so
Speaker 1: for a while now, um, it's it's it's it's it's
Speaker 1: a stronger labor labor market. But the emphasis on hiring, retaining, recruiting, training,
Speaker 1: and the creativity to to get the best talent has
Speaker 1: never been more important. And UM assisting in finding housing
Speaker 1: and relocating people to different markets to help support those
Speaker 1: markets where you don't have folks UM has become a
Speaker 1: keen focus for for for our industry. Hey, listen, just
Speaker 1: got about thirty seconds and then we're gonna take a
Speaker 1: break and come back and talk some more. But in
Speaker 1: thirty seconds, are you paying? Are you having to continue
Speaker 1: to pay though a lot more for those workers? Wages
Speaker 1: have gone up? Um? UM that that was a reality
Speaker 1: of of supplying demand and and and but not not
Speaker 1: nothing that um that we did we didn't expect actually
Speaker 1: and that UM and you'd seen it actually in room rates,
Speaker 1: it's been it's so much that's been passed on obviously
Speaker 1: to to our guests. UM. But we've been UM. We've
Speaker 1: adjusted rates and incentives and then whatever we can to
Speaker 1: to stay fully staffed. All right, Well, listen, we're going
Speaker 1: to continue to talk about this because I'm also curious
Speaker 1: about some other inflationary pressures that you might be dealing with.
Speaker 1: And then I want to take us around the globe
Speaker 1: and tell us where we can go visit a montage
Speaker 1: residents or you know, take a vacation we're gonna come
Speaker 1: back with Alan Firstman, founder and CEO at Montage Internationally.
Speaker 1: He's joining us via zoom from California. Will continue in
Speaker 1: just a moment. So we want to get back to
Speaker 1: our guest still with us as Alan Firstman, founder and
Speaker 1: c at Montage International luxury hospitality management company. He's still
Speaker 1: with us via zoom from Orange County, California. So, UM, Allen,
Speaker 1: let's talk about Uh, we were talking. Let's just finish up.
Speaker 1: I kind of where we were before when we talked
Speaker 1: a bit about inflationary pressures. You talked about wages have
Speaker 1: definitely come up. Are there other inflationary pressures that are
Speaker 1: packing you guys as well? And I think about food transportation?
Speaker 1: What else is across the board? The supply chain issues
Speaker 1: read havoc on the construction we were doing and building
Speaker 1: our newer hotels and also getting products. So um, it's
Speaker 1: created pressure on pricing on virtually everything we buy. UM.
Speaker 1: And that's UM, that's been the reality we we we've
Speaker 1: dealt with over the past six eight months. How have
Speaker 1: you passed along these prices? To guess at this point
Speaker 1: how much have you had to raise prices since pre
Speaker 1: pandemic there's been there's been price increases. We've been we've
Speaker 1: been the leader in we've been the rate leader in
Speaker 1: the markets that we perform. But but for for us,
Speaker 1: it's also about what kind of value are you adding?
Speaker 1: So our focus needs to be not just on pricing increasing,
Speaker 1: but what other what other value things can do? For example,
Speaker 1: UM Montage are gonna beach where I'm sitting today, We've
Speaker 1: added new amenities and services that that we didn't have before,
Speaker 1: entertainment at the pool seven days a week, and a
Speaker 1: virtuality experience, and some other things to help make it
Speaker 1: a value proposition not just a price proposition. So tell
Speaker 1: us about how it all works. Do you do you
Speaker 1: actually own all the properties UM? Are you just you know,
Speaker 1: overseeing them? How does it work? We're hotel management company,
Speaker 1: not like four Seasons with Carlton Marriott UM, so we
Speaker 1: we manage UM luxury properties. Often will take the lead
Speaker 1: role in UM finding new opportunities and work with hotel
Speaker 1: developers and owners UM and then we provide the brand
Speaker 1: standards and the and the creative energy to to continue
Speaker 1: to put forward great Montage and Penry hotels. Where are
Speaker 1: you seeing the opportunities right now? For expansion for growth. Well,
Speaker 1: we're seeing it um resort destinations, which have always been
Speaker 1: a strong suit for Montage, and we're seeing great urban
Speaker 1: opportunities for Pendry and there'll be some for Montage as well,
Speaker 1: major gateway cities. There's great interest internationally when we open
Speaker 1: our hotel in New York City are Pendry UH Manhattan
Speaker 1: West UH. It has been incredibly well received and of
Speaker 1: course that's that's given us great visibility. In fact, it's
Speaker 1: the number one hotel in New York on trip Advisor
Speaker 1: right now, and we've had just incredible support and it's
Speaker 1: created even greater interest UM for hotel developers owners as
Speaker 1: they looked to build new iconic hotels. Well, I do
Speaker 1: wonder Allen. You know, you guys played definitely into the
Speaker 1: high end, and I wonder about you know, how much
Speaker 1: you think or see your consumer UH is pretty resilient
Speaker 1: to the economy. Because we are talking so much here
Speaker 1: at Bloomberg right about what's going on questions. I think
Speaker 1: one of the latest stories in the Bloomberg about chance
Speaker 1: of a recession UH in the in the making. So
Speaker 1: is that something that you have to be really that
Speaker 1: concerned about? Is your consumer? They can deal with it,
Speaker 1: they can deal with it better. Um. But what we
Speaker 1: deal with recessions, we you know, in you know, oh
Speaker 1: nine tend you know, um, we felt it as well. UM.
Speaker 1: But luxury tends to tends to bounce back, so quicker,
Speaker 1: a little more resilient. Um. But um, And there's there's
Speaker 1: there's a reduction in spending even at the ultra high
Speaker 1: end in in in a in a recession. But we
Speaker 1: are much more insulated than than um different products. You know.
Speaker 1: I was thinking, Carolin, I've been talking a lot about
Speaker 1: I know is miserable right now, and flights are miserable
Speaker 1: if you have to fly commercial, which most people do
Speaker 1: of course. So Alan, I'm I'm wondering if you're seeing
Speaker 1: if that concerns you at all, that it's just so
Speaker 1: difficult for families to get to these places in some
Speaker 1: cases that they're saying, you know what, we're just not
Speaker 1: gonna go, We're gonna drive somewhere because it's not worth
Speaker 1: the hassle. Is that concerning you? It does? But in fact,
Speaker 1: we've I think been somewhat of a beneficiary of that
Speaker 1: because the locations where our hotels and resorts are UM
Speaker 1: haven't had the same level of challenges that some of
Speaker 1: the other markets. I mean, try going to Europe today
Speaker 1: and watching the news and seeing what's happening. You know,
Speaker 1: where's your luggage going, and what kind of lines and
Speaker 1: what kind of problems are gonna face. I think that
Speaker 1: actually is driving greater interest in North American travel and
Speaker 1: resources some and we have some great drive to destinations also,
Speaker 1: which completely removes the hassle of air travel. For now,
Speaker 1: we'll tell us about kind of some of the destinations,
Speaker 1: and it is interesting and I'm curious. Is it people
Speaker 1: who just want to come and stay for a week
Speaker 1: or two or is it people who actually want to
Speaker 1: live and maybe make a purchase of some sort. You
Speaker 1: get a combination of both. Often it starts with a
Speaker 1: weekends stay or or a week or two visit, and
Speaker 1: then it transforms itself into acquiring acquiring a home. We
Speaker 1: have read everyone of our Montage hotels and and most
Speaker 1: of our pendryes, we have a residential component where you
Speaker 1: can um live what you've just experienced. So UM, being
Speaker 1: able to experience a Montage hotel and then be able
Speaker 1: to live it is a dream for many UM and
Speaker 1: we the kind of locations were in our our our
Speaker 1: ideal for primary or secondary residences. Well, and I wanted
Speaker 1: to just talk prices because I'm looking at one overlooking
Speaker 1: the azure waters of Santa Maria Bay. I can go
Speaker 1: for that about three and a half million starting at
Speaker 1: So give me an idea of the range of pricing
Speaker 1: and who ultimately does the buyers at US buyers is
Speaker 1: that European buyers. Give me an idea. We have international buyers,
Speaker 1: but the predominantly a North American US buyer um and
Speaker 1: across the portfolio, our homes range from three million and
Speaker 1: thirty million dollars. It's a it's it's, it's it's it's
Speaker 1: a broad range, but it's some of the most uh
Speaker 1: the most um highest priced reels state UM and and
Speaker 1: in our brand and the experience that we're selling helps
Speaker 1: drive huge premiums. Like I'm looking at the website, there's
Speaker 1: stuff sold out to him. Are they doing? Are do
Speaker 1: you doing any fractional alan? Do you see a opportunity there?
Speaker 1: We are We're introducing our first fractional opportunity up in
Speaker 1: our big sky Montana project there where we're we've sold
Speaker 1: out of our um whole ownership that we had in
Speaker 1: the building and UM we're doing some more cottages. We're
Speaker 1: also building another UM another tower that that will connect
Speaker 1: to Montage Big Sky that will have UM fractional product
Speaker 1: in it as well, so it will broad in the
Speaker 1: buyer base and more and meet another need more summer
Speaker 1: or winter demand for Big Sky. Do you think or
Speaker 1: is it equal? Equal? It's pretty, it's amazing, pretty equal.
Speaker 1: Big Sky is the is less than an hour from
Speaker 1: the entrance of West Yellowstone and so we have we're
Speaker 1: the beneficiary. You want to go see Old Faithful, We're
Speaker 1: actually the best place to to go. So we have
Speaker 1: the benefit incredible skiing, ski and ski out. And then
Speaker 1: in the summer we have a golf course right right
Speaker 1: at our front door, and we have let's go, you know,
Speaker 1: fly fishing summer winter. I see a remote broadcast in
Speaker 1: our future at a Montage. Let's work on that. Allen,
Speaker 1: all right, have a good weekend. Great to check in
Speaker 1: with you. Alan Firstman, founder and at Montage International. Joining
Speaker 1: us via zoom from Orange Country at Orange County, California,