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We had tunnel -- -- and John Russell our special guest for this hour.
Founders of night -- hotels guys before we even get into this did -- say that right -- You did did you did it stands for New York -- does -- not.
Who -- or New York London we're the only hotel you're -- accounting opinion down but let's just tell -- it is a hotel chain.
That's hit hard by the recession but you're expanding.
As we come out of this recession as -- is this country struggles.
You see growth so guys we're gonna talk to -- minute of course John Rollins is here.
A -- capital Danny bad we have all start venture capitalist coming up we have another pitch at the bottom of the hour.
But -- and John let's just start with you first.
Because again you have three locations so far too.
In Texas one in Rhode Island you started back in 2005 I know you had great great growth plans back then he planned to open.
I believe fifties so just how have you had to -- With this downturn in the economy either one you can star.
Yeah you're right we did have op plan to have -- the opener out of the ground by the end of 2010.
We we start this venture start his -- about four years ago.
And you're actually correct we have to open right now on the third opens in las colinas Texas in about two weeks.
We've had a ratchet down our growth expectations because we're really we wanted to build the first three to five hotels ourselves.
We -- -- we know exactly what construction cost would be.
How long would take to build how many employees would take to operate create a culture for this new brand and then we're going to use the franchise platform to grow.
That all -- good about you have two years ago.
-- now because of the and have been on available live off of funding.
It's very difficult for developers and potential franchisees to get money.
So we've had a ratchet down a little bit our growth plans to maybe 35 to forty by the end -- 2011.
And in addition to the debt situation measure you all heard a lot about it throughout a lot of guests talk about it.
The occupancy and hotels is has been down drastically.
And so therefore -- lenders.
They had cash aren't willing to lend right now until you can and developers are willing to do to develop a new product.
-- they see that the markets start to -- and we're starting to see some hope there.
Well done -- yet don't talk about that though how is business in the existing hotels is that really.
It is she is your central focus there should be rather than grub right now just -- -- to.
To manage -- -- is -- you have common with -- -- shortly men and jumped to make some money.
-- -- -- -- You're actually corrected -- fortunately we're making debt service on the two existing hotels that we have open today so that's good news and just like the whole industry's done.
We've had to do some soul searching and where to cut cost -- through operations.
What amenities we don't really have to offer what what which the consumer won't miss so yes we are definitely focused on on operations.
But like I say.
Fortunately we we are where we are like get the majority hotels today are making -- -- service and are making a little bit of money.
Yet truth be known about -- -- -- years ago the industry had a a robust occupancy of about 6869%.
And today it's it's hovering around 55%.
So it is difficult out there but not impossible.
Tell my tell people about your hotel I mean these are boutique hotels I -- -- not as though -- short for New York loft.
You're not in Manhattan so I thought I presumed it was vineyard experience outside of Manhattan so please explain -- -- you know the experience they get when they come to your hotel.
Well if it does give me the feeling of -- New York off the report you know -- Tom -- concrete and brick construction polished concrete floors.
Ten and a half foot ceilings exposed pipes.
I'm very much like the New York lost -- -- -- been converted and -- housing -- hotels so that was what we designed it to be with our other partners and it's been very widely accepted by the traveling public.
And -- why five and that's the latest in the technology.
And the -- allotment and it has food and beverage and and a very active.
That brings an a lot of clients and -- keeping us keeping us afloat because it really to use -- an accurate really -- on Thursday Friday and Saturday.
Say it's what we call -- destination bar and -- 7% of business actually comes from the local community office buildings and found recently in the area so we've been very fortunate there.
And by the way this hotel is built for business it's a business hotel and we purposely went into secondary and tertiary markets first.
Not the big gateway cities like New York -- Chicago.
Because of the expense now that being said the good news is the first couple franchise.
He's that we signed up.
Are are actually in the west -- in Chicago and in New York City so you'll see -- maybe 22 years down the road.
Yeah actually answer John really quickly one of my question that we just really quickly.
Have to welcome our radio listeners it's six minutes after the hour time to say hello.
How -- To people I was laying on Syria the next -- thank you for joining us I'm Dagen McDowell along with -- -- and if you have a question about your business starting a business anything entrepreneurial wanna hear from you email us your money at foxbusiness.com.
You can always call us.
966 and we -- just jumped back to our night -- guys quickly enough.
You're talking about the -- Warwick, Rhode Island -- jump in right.
Actually both leverage up -- pretty good.
Both of these.
Bars and restaurants we call of the loft.
Because it's 81 area that has it has a bar has a restaurant.
It's got a business center it's got to boutique it's got a library.
And it and but in both hotels it either goes out to a 5004.
Square foot courtyard like an entertainment courtyard.
Or in war it it it is -- patio deck.
But actually goes out to the -- -- river -- can have drinks in entertainment right on the river.
Yet you're talking about it that we talking about the hot bar -- in the two properties that are open so far.
And it really had outreach to the local community would that always in your thinking or did you.
Make that shift.
To bring in people as the economy began to struggle.
It was an -- thinking all along because we've we located in places about.
Several million square feet of class -- office space occupied and we marketed to those people.
They're both bring their travelers to stay with us but also to come there to dine and drink in the evening.
And the one thing we do to guys when we open a hotel.
In any community we have and -- contest with a local artisans.
In the area whether -- college or university students or you know people that are that are that are trying to paint or create.
In the community we have first second third place prizes for the arc in the sleeping rooms where their paintings -- photographs.
So we try -- -- -- that you knew that -- number one number two is.
We have something we call -- -- music.
And we try to we create a CD in whatever area we are with.
Ten to twelve.
Soon to be discover artists that that would put on CD we actually -- in the hotels.
We actually bring these these these bands are these singers and to -- throughout the summer or special events.
We have not a low not aware Daniel -- -- Vick who is the was up.
Front runner yeah first name yeah first leg -- that.
Yeah the first one and he was a runner up and he.
He's designed our uniforms for us and also -- clothing line.
For our our guests and our consumers.
So we have an island music not -- are not aware I don't know all the thinking it further throughout.
-- you're all we know you are -- not me.
It's still the ones that he's the one don't know I'm glad they got everything in the community can you talk is about -- little reality show on how you -- -- your -- apprentice.
If you have -- -- which was big success we wanted to hire -- sales person so we decided since -- unemployment.
Was so high -- solicit it to resume is from.
People who had history -- having worked in the in the business.
And we got -- -- lots resonated reduced it to twenty and normally I did face to face us like speed dating interviews with -- five minutes with.
Four different and -- kind of speed yeah I have a -- -- -- -- and a reduced it down to eight people and then they went through four days of different sales experiences we -- a winner and then we also had.
Opened it to people who run the hospitality schools so we hired a person as an apprentice for one year.
And we hire a person -- a student for a three year internship both pay.
And we and we chatted and at the final night we tied in with a charity event for the food bank of Rhode Island there.
And we raised about 4000 dollars for the food bank.
And had a reception -- at the hotel and that was part of the contest.
Eric and all of the apprentice -- candidates all lived in the hotel from Saturday night and Friday morning.
Tell me you said rat them -- eight.
But what I want and we -- they'll viewers want to know about your -- amazed because I know John had -- -- you know you worked in the hotel business.
But people think hotels they think.
An incredible cost.
Is incredible work.
Oversee you -- -- very very saturated.
Well and that that's what we know vast right but tell me -- Max altitude talent.
Well yeah I came -- -- I've started my business grew out of college of Procter & Gamble and brand management.
And I ended up in the electric utility -- from there and two.
Got active in the community -- got involvement convention bureaus and that eventually led me into the hotel business.
And and from from there after working for corporations for a number of years both -- much I've decided there.
We go out -- -- that's how we started branching out we have started other businesses besides not blow.
-- what you don't know is -- and I've known each other in the industry for about 34 years and -- we've worked together it it's about three different court court.
Three different times and and we've been in our own businesses together for about the last ten years you -- it send it John back in the day.
I did back in the day now and how I got in the hospitality business hotel businesses I want to West Point and went into the army for five years and so on the trained killers don't ask me any tough questions -- Let but but but here I -- not John but but but -- But but anyway so when I got a service I was and it would have -- executive search firm that used to help.
Actually military service the people find jobs in this in the -- business community my job was to -- set these big conferences up at hotels.
I like the hotel business more than I -- executive recruiting visit -- so I got a job offer from Sherron and that's how I got into that and the business back in 1975.
I think you have learned over the years -- -- sometimes -- The thing that we've learned over the years is that you have to keep the context that you have you know you may.
And today's economy issues that you all were very aware of people losing their jobs but not broke what they've lost their jobs they wanna know what to do -- -- you -- we'll start a business.
That's a great idea.
But you need to know how to leverage your capital and don't try to be on the whole thing try to leverage your capital bring in people that know your trust you are a lot of capital sources.
And and bring some men and and bring people in and own a piece of something and then.
I'm real restaurants we owned parking company we don't cigar company I don't Wear a variety of things besides -- -- -- -- Data -- active -- never burn your bridges that it's so.
The cigar Islam if anybody about the cars parking heights now that you guys could tell and hit any thing about anything that's where -- -- -- It's not a cigar in your car.
-- -- -- -- -- -- -- -- -- -- -- -- Guy that's flowers I don't do anything that you don't have fun that that's the big thing don't do anything don't threaten you in a business that you know the -- -- Our that you can't -- -- actually he's he's been right correct that.
The motto for the motto for our our are not a hotels passion service -- one.
And the fun is what I think over the last that you know five years with.
With 9/11 SARS in corporate malfeasance kind of the -- hospitality has been missing and that's what we're trying to get back the -- people serving -- people.
Now we've got 45 minutes of fun fun fun coming out and -- so I thought you -- -- -- hair.
Think keep calling in about starting a business -- just those two guys we can talk to -- -- -- to -- my math and inspiration now com.
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