S3E5 Adam Dailey An investor’s mindset behind today’s hospitality deals

What I'm seeing and hearing and feeling kind of in the industry of like, just get through it and be better. We have conversations about all these things all the time of like revenue management and customer experience. And you know, how do we acquire that customer? And how do we acquire them in a scalable way? And how do we drive our views? And I mean, all these things that we're constantly obsessing about, right? Welcome to The Turndown. Today, we dive into the dynamic world of hospitality and real estate With Adam Daly, a seasoned investor with a fascinating background from Olympic trials to boutique hotels, San Diego is a very dynamic destination with the largest hotel pipeline of the U.S. 25 or top U.S. 25 markets. According to SDR, 2,900 rooms in construction and another 2,200 rooms in final planning. San Diego has 13,000 Airbnb listing and only 2,000 available homes for sale. Let's explore the current state of the market with Adam from Airbnb's trends to challenges of securing loans and unpack the unique charm of San Diego's hospitality scene. Adam shares his insights on what makes a successful hotel investment, the impact of technology on guests and even his favorite taco spot. Hi there. Welcome to The Turndown. Adam, it's a pleasure to have you on the program. Welcome today. Thanks for having me. It's awesome to be here. Absolutely. I want to kick it off with our standard opening question, which is what is keeping you up at night these days? Um, I think what keeps me up is kind of the future of, I guess, the business of hospitality with regards to kind of my future deals. I'm a real estate investor and I kind of take down these deals where I buy these boutique hotels or, or Airbnbs and it's, it's just becoming harder right now. Banks don't want to lend and you know, the it's, it's harder to pro forma things with the uncertainty going on. And so that really keeps me up. It's not kind of my current portfolio as much as like, what's, what's next. Right. So what is changing from your perspective? I mean, you've been in this business for some time, right? You must be seeing something that is probably causing headwinds for your, for your operations. I mean, I think it's, you know, 2024 wasn't like the best year for hospitality. It wasn't bad necessarily, but it's not this like, you know, going up in this, this curve that we would like to see necessarily. So people are a little strange. I've just found in terms of investors, in terms of partners, in terms of banks, especially on, like I said, on the banking side, it's just like, generally speaking, most banks don't want to touch hospitality anyway, like in general, a bank, you know, probably 80, 85% of the banks are like, Oh, we don't, we don't know enough about it to deal with it. And what we're just seeing now is just like, everyone's like kind of pencils down in general, not just with hospitality, but in general, because they're just like, they don't know what's going on. Everyone thought with this one election, this was going to happen and that's not quite happening yet. And so I think it's, it's just the uncertainty. I think everyone that that's where it is. Not like people are scared necessarily, but they're just, they're just kind of weirded out and they don't know what's next. Right. So they're not going to underwrite things. And so that, that's kind of what we're seeing is just like the banks are causing like a bit of like panic down. And is this panic recently? Like, is this, you know, we have to kind of talk about the election probably, right, a little bit. Is, is this like last 12 months, last six months, last three months? Give me a sense for. Yeah. I mean, I would say when Trump was elected, I would say there was all this like, Oh, that's going to be good. The economy is going to be good. Like this might be bad in other ways, but he's going to fix the economy. We're going to have a stock market up everything, you know, interest rates because he's a real estate investor. Oh, everything's going to be great. Free tacos for everybody. But, and I think we saw a bump for like 10 days or something. Right. But then it's just, again, it's just this uncertainty. It's like, what, what, what does it all really mean? And so, um, I think banks were really excited in the beginning and then interest rates didn't come down. So they're like, well, if interest rates aren't coming down, then we're going to get, you know, more conservative again. And so I think it's, it's, uh, it's just this environment where no one's like scared, uh, that might not have been the right word. I don't think people are scared. They're just like, unsure of where, where we're going in all this. Right. And so I think it's, nobody wants to get caught in a bad deal, including myself. And so that's kind of, like I said, what, what's keeping me up at night? And I usually have four or five deals kind of in the hopper that I'm working on. I have a couple right now, but they're not like exciting enough to where it's like, I'm going to push through and get this done no matter what, whereas I've had those in the past. You're operating mostly in San Diego area. Is that fair? Yeah. All in San Diego County. Let's talk about San Diego as a destination, right? Like, I mean, you're, you're in hospitality. A lot has happened since I've been coming to San Diego, probably 20, 25 years ago for the first time. It has seen a significant boom, uh, I assume as a city. What else has changed in San Diego in the last few years? You know, obviously pricing has gone up and we've seen a lot of like change in the market because after COVID, because a lot of San Francisco and LA people moved down to San Diego and we didn't have that huge, you know, outflux of people leaving, uh, like some other places on the West coast, like Portland and Seattle, and like I said, San Francisco, I mean, for us in the hospitality industry, San Diego is unique because it is like a, like a Barcelona or even a, you know, a Las Vegas or something where it's like, there's conferences, people are coming year round. I mean, people are coming in January because they want to get out of, you know, wherever they are in Nebraska or, or, you know, anywhere because it's, it's good weather and they also come in the summer because it's good weather. It's not hot, like it is Florida or something like that. So it's like, even though obviously we have, we have seasonality, a ton of it in San Diego in terms of the hospitality industry and rates and things like that, it's still, there's no, like, there's nothing where it's like, nobody's coming, there's, there's always business travelers coming. There's always people coming for vacation. So that's our, like our thesis of why we're, why we're in San Diego and why we invest in San Diego is because it's like, even, even in the bad months, we can still pay the bills, right? We don't have to write a check in the bad months. Whereas I know some other regions, they write checks, um, to, you know, to, to, to stay open. And so it's like, if we can make, if we can make it in the winters, here, then we can crush in the summers. That's amazing. And your portfolio, which I found fascinating is covering vacation rentals, hotels, and hostels, right? Like you've, you've played in almost every type of hospitality. What's your favorite? Uh, I haven't thought about it like that. I mean, I'm not like the best operator. So it's like, for me, I liked the deal part. I like figuring out how to fix this hotel up and how to finance it and how to, which partners we should bring in. Um, and then when the, when the place is done, you know, my passion isn't, isn't continuing to operate. My passion is going and finding kind of the next deal. So for me, it kind of depends on, it depends on the opportunity. You know, it's like this, this latest deal we did was a 18 room hotel at mission beach and it's the, you know, might be one of the best locations in all of San Diego. So it's like, it's very, it was very exciting because everyone knows where it is and it's this, like I said, it's this amazing kind of location and an opportunity, but it's, it's not easy. You know, it wasn't the easiest deal. It wasn't like the slam, the biggest, like slam dunk in terms of like the financing or the basis or the price I bought it for. So, you know, sometimes my favorite deals are like ones I, I know I bought really well on, or sometimes my favorite deals are the ones I don't do anything with, but still kick back money to our investors without ever doing anything. So it's fun to have, you know, boutique hotels and obviously with, with those, we don't, we don't worry as much about kind of the regulations that there's a lot of uncertainty around short-term rentals in general. You think you're in a good spot, but then something can change two years later. And it makes it tricky with, you know, when you're underwriting or when you're bringing on investors or something like that, because it has to, you can't just have those types of assets, like pencil out just as hospitality, right? So if you buy a house and, and it doesn't pencil out as a long-term rental, a lot of, there's a lot of factors out of your control, right, right in that, in that component. So to me, I would never want to buy something where it doesn't have like a B and a C plan, like a couple of backup plans to work and survive. And, and have more avenues potentially for revenue, right? Yeah. I mean, that's what COVID taught us, right? I mean, we had a boutique hotel in the heart of San Diego and it was empty. If we wouldn't have gotten rid of some of the kitchenettes, we would have been, we would have had some deals with the city where we could have got some of, you know, some of their workers, or I don't know if it was homeless people. I can't remember what it was, but there was a lot of need for housing, but we didn't have kitchenettes, right. Or any, any kind of kitchen because there were small hotel rooms. And so now one of those things I always try and think of is like, can we put a kitchenette in here? Is there enough room just to put a small, basic kitchenette type of thing? Because then I can de-hedge some of the risk on it, or I can have a backup plan. You know, if another COVID hits, I can put people in here for 30, 60, 90 days type of thing. Makes sense. You equated San Diego to Barcelona to a certain extent. And when I look at the hotel portfolio in San Diego, it's much more independent than I would say the average North American city. Why do you think that is? I mean, San Diego, it's like one of these, like it's on the radar, but it's not, it's kind of scrappy. I mean, the people, you know, you just don't meet a ton of people from San Diego, I guess. And so it's just a, it's just a, it's like this like forgotten culture in a lot of ways that people, that we like it like that, I mean, the residents and the people that live here don't want to promote or feel the need to promote San Diego, you know, everywhere. For you, it's a best kept secret. Like you. It is. And like I said, everyone's been to San Diego, but the unique thing about San Diego, in my opinion, without going on a tangent, just how much I love San Diego is just that, like, I lived in Barcelona for three years as well. I see some parallels too, in terms of neighborhoods of like, you go to this one neighborhood over here and you go to a neighborhood two miles away and you're like, I can't believe these are in the same city, like they feel different, the people look different, they dress different, the restaurants are different, you know, the, the architecture is different and I, I think that's what makes a great city in general, right, is having this uniqueness. And, and when you go in neighborhoods and not feeling, you know, everything's like so vanilla. Okay. And how, how does that translate then to the, I guess, hotel culture of independent versus, you know, the Wyndham's, the choices, the, of which there are fewer in San Diego than there are independent hotels. Yeah. I mean, I think a lot of it is we're, you know, there's, there's some regulatory kind of challenges, I think, in California, in terms of development and in terms of changing things, you know, in terms of moving forward. So it's like getting big, you know, getting a 300 room hotel in San Diego is probably harder than almost anywhere in the country, I would assume, because of, you have to deal with coastal commission and you have to deal with the city and you have to deal, and you're, you're talking about years and years and years and years of, I mean, if you were wanting to do something like that, I would, I would imagine it'd take five to 10 years at least. So the red tape is enormous. Yeah, which is, which, which is the opportunity for a lot of people too, because I mean, most people want to stay out of California, right? But if you can deal with the politics, you know, then in the bureaucracy and the red tape, then you can, there's some good opportunities if you're patient. We have many hoteliers on the program that are either looking at expanding or, you know, they have one or two properties and are looking at acquiring a new or expanding, right? Because they, they feel they have a winning formula. What are you looking for from an investor perspective? When you look at a hotel business as an opportunity, what, what are some of the things that you're really spending time on understanding? It's obviously a cliche to talk about location, location, location, but I don't want to apologize for the location. I don't want to sell a new, like, I don't want to attract people to this new location because it's going to be great. And I don't want to be part of that, that group, that lobbying group that's like, no, trust me, this neighborhood's going to be great in 15 years. I'll get on the board and I'll help attract people. So it's like, I'm, I, you know, I ran an events business for a long time and people would always come to me and tell me, you should, instead of the Olympics, you should do this festival over here in Germany or whatever. And I'd be like, dude, I don't, I don't sell that. I'm I'm wait until the events are coming to me and there's already demand for it. So that, that's part of it is the location is, you know, is you're not apologizing for the location off the bat. And another component for me personally is I'm always looking for this value add opportunity, right? So if it's, if someone came in and they fixed it all up and it's beautiful and they've leveraged ADRs and it's just like, here it is, right? That's not my type of deal because I want it, I want it ugly, right? I want it to where I can come in and put my touch on it and where I can take ADRs and double them or whatever, right? Because they're, they're not off because the design is bad. They're operating it poorly or something like that. So for me, it's a big value add in addition to location. That's the main things I look for. Right. And in addition to like, go ahead. So it has to be something where you see the opportunity, but it's not perfect. Like you, like you want to come in and change it to give it that extra value. That will come from your expertise, from, you know, your experience and by you changing the mattress, the coat of paint, the shower head, you can immediately extract, I don't know, whatever the amount is, an extra value. Is that fair? Yeah. It's whatever value add. It's like, oh, they're, they have this huge area out back that they're not using that could, we could put, you know, a tiki bar with hot tubs and whatever. Like, it's like, it's a, it's a space as well as a room, as well as an experience, as well as, like I said, when they're, when they're half horrible operators, I'm like, oh, this is good. I love dealing with crazy, crazy, bad operators. Right. Because it's like, they know they're bad operators, but they don't know how to get out of their own way. And so it's like, that's where it is for me. Like I said, where the opportunities are is finding these, these nasty kind of beat up places and, and that nobody else wants. Right. So, um, cause it, cause it, cause San Diego is competitive in terms of what I do and looking at these properties. So it's like the uglier, the better, I kind of always joke. What's the project you're most proud of? That's a good question. I, like I said, I just mentioned the mission beach one. That was a pretty, that was a pretty good one. It was a very hard deal to get through, you know? And it was, like I said, the things were changing with the economy and it just wasn't, it was like not a, it was not a steal of a deal. I mean, we bought it pretty expensive, so, but we're, we're, we're really making it work well, you know, and it's finished and the product is beautiful. And so it's kind of, usually I'm kind of like boutique-y, but also like, I don't want to say transactional, but like with the Airbnbs, we're like, it's focused on quality, it's focused on unique stays, the experience, whereas like a lot of our hotels are, it's more of a commodity, right? It's like, it's a really good hotel, but it, and it's got a little better reviews than the one next door and it might be five bucks cheaper. So you're like, you're going to go there and you're going to have a good time. You're going to be satisfied, but you might not tell your best friends, like you've got to go visit this hotel the next time you see San Diego. Whereas like the, the new one we did in boardwalk, the boardwalk hotel and mission beach. It's one of those, like you would tell your best friend, like you've got to stay here, it's a really great location. It's awesome. The people are awesome. You can go to walk everywhere. There's free bike rentals. Like it's just a great kind of brand already. Nice. Is there a deal you lost that you regret losing? Uh, yeah. I mean, there's always those types of deals and ironically, one or two of them sometimes come back. Yeah. Sometimes when they come back though, I've had a couple where they were, they're like a million dollars more than when you saw it a year or two ago. And you just like the pride or whatever it is, can't gets in your way. You're like, no, I can't, I can't buy it. I can't look at this deal for, you know, 800,000 more than it was a few years ago. And they, they still didn't do a good job of fixing it up. You know? Um, it's like, I always think of like these deals of like you, you can't get too emotional in these transactions as well. You have to be a little emotional to get the fish on the hook, I guess you could say, but like, I remember the first time I did eBay, probably whatever that was 1995 and I was buying a laptop and, and I was like, this is the laptop. This is the one I got it. And it's, you know, 500 bucks and I'm bidding on it and I lost. And I was like, Oh man, that was the, that was it. That was the laptop I wanted. And I was so disappointed. And then like 10 minutes later, I looked again and basically found the exact same laptop, another auction. It's, you know, same price. Like it's just, and it, and, but, but there was this emotion for me of like, I wanted to win that transaction and I was disappointed when I didn't win. And so I think about that a lot as work as I'm like, don't, you know, as you're underwriting like a hospitality product too, like it's easy to, to get in your spreadsheet and then kind of manipulate it, right? Like you self-sabotage yourself because you're like, well, this really needs these ADRs are 120, but they need to be 140, but I think they could be 140. I think I could actually do better than, you know, what I was thinking about earlier. So yeah, I'm going to change it to 140. And it's tough when you, when you do that, right. When you get too emotional about these transactions. I want to take a step back and, and understand how you became Adam Daly in your current role, right? Like you have a background in sports, right? You were a vivid traveler. What formed you the most, let's say. So I, like you mentioned, I was an athlete. I competed in the U S Olympic trials. And a few years after that, I got an opportunity to buy Olympic tickets from, from the U S Olympic committee, which I did not really thinking much about it. I just bought a few thousand dollars worth of tickets, not knowing whether I'd make the team or what, or if I just would sell them on eBay or whatever I would do, but I did take those tickets. I forgot about them for a year. And then I was kind of miserable in my, you know, job at the, at that point in 2003, and it was like, I'm moving to Athens and I'm going to set up an Olympic business with all the tickets I bought, I'm going to book a hotel and just sell them to my friends and their family, you know, sell them to athletes, families, and I ended up selling to a lot more than just kind of my network and that started me in kind of, I guess you could say the Olympic hospitality business, which I did for another dozen years or so, where I would move around to Torino, Italy and Vancouver, Canada, and set up offices in London and no, it was, it was, it was great for a while, especially the places where those events were, you know, I loved Europe. I, you know, kid born, you know, out of the country. And it was, and then, and yet, and I remember in Vancouver, we spent a million dollars on a hotel and I was like, man, I want to be the guy who owns the hotel, like that guy just made a million dollars in a month on this, you know, on this Ramada hotel, you know, and this was your room block or something at the time. I was buying it for a million and trying to sell it for more, right. But I, I, I had a lot of risk and it was a big, it was kind of a, it was a big deal, it was a huge deal for me at the time. And I just remember thinking like, dude, I want to be in, I want, and I liked the idea of buying that for a month and selling it out for three nights, four nights, 10 nights to these different, you know, the Canadian hockey team or whatever, I kind of liked the game, the transaction game too. So, and I liked the idea of like, you can get your butt kicked today, but tomorrow you have a whole opportunity to resell out again. So that, that, that I think started me in kind of this hospitality thing. Fast forward from Olympic to real estate. Yeah. So I had a couple houses in little Italy, a neighborhood here and, and, and was just doing well on Airbnb with them. One of them was an office or it was supposed to be an office and it wasn't renting as an office. And I was like, man, I looking at this new Airbnb thing, and I think I can actually make more money renting it as an Airbnb than we were doing as an office. And so I did, and then we got the lease for an office and I'm like, after six months, I'm like, dude, we're, we're making 50% more as an Airbnb. So we just kept as an Airbnb and I ended up, so we sold that and then transitioned that into a boutique hotel. And then just, like I said, it kind of the same, the same idea, I guess, of like, look, if I can build more economies of scale and take some of these learnings, take some of these investors, take some of these banking relationships, it's just all of it. And, and, you know, kind of buy more properties is kind of the, that was again, the, the, the thesis I think I had in my head all along. So the skills you developed early on when you packaged Olympic tickets with, you know, uh, stay accommodation, that's still something you're leveraging today, right? You, you're still looking for opportunity. It's something you think about all the time, right? I mean, we, we, in our industry, we stay in hotels and, you know, it's like I have kids that I travel quite a bit with and you're always looking at what people are doing, right? You're looking in the lobbies and you're noticing things you're at Airbnb's. You're like, they're sending their, they're doing this manually versus automatically or vice versa. Right. Or, Oh, this is a nice touch. They put fresh flowers on the table or, oh man, they really messed this up by not, by not bringing in the trash cans or whatever it is. Right. Um, to me, it's like, it's about kind of being a student as well, because I love traveling. I always have loved travel. And so I want to, you know, I, I liked, you know, the opportunity to have an impact with someone too. So that's why it's a little more fun to own those properties that are more experiential, more fun, more unique, and that they will tell their friends about versus, you know, versus the other properties that are, that are just kind of transactional. Now, when we talk to operators and I think you are an operator too, right? You own, or you're involved in a property, they're facing very different challenges, right? Banks are maybe less, less prevalent or the day-to-day changes, uh, challenges on banking is maybe less important to them, but they talk to us about, I have labor shortages, my cost of, you know, um, operating, you know, is increasing left and right. I don't know how to source and secure my next guest. I'm spending a fortune acquiring them. Their challenges are growing left and right. Do you see the same thing? Yeah, of course. Yeah. It's, that's why I was saying it's, it's getting tougher and I think part of that that I didn't say earlier was that with the uncertainty, there's also less people going like, Oh, I want to spend $20,000 in July on a vacation right now. Right. And they, they might spend that $20,000 vacation in July, but they're probably not going to decide till June or July, you know, and because they're, they're not certain. So it's like the booking cycles changed as well as just, yeah. I mean, people, people aren't spending, you know, not the super luxury, but the kind of what, you know, the, the nice houses that we have that used to rent for 1500 or $2,000 a night, those same houses are renting for half of that and we're, and we're, we're okay with that. We feel good about that, but you're like, it's still 50% of what the height was a couple of years ago. And so I think, yeah, in the labor thing is huge. And especially if you're running a service business, right. And you, you have a five hour window to clean a place or whatever. Right. And someone calls in sick. I mean, it's a huge problem. So I think it's, it's all troubling, you know, and I think that's probably why there's less kind of going back to the banking and going back to the sale. I mean, there's less kind of transactions because people are just like, man, this is, this is just put your head down and do the best you can right now is kind of what I'm seeing and hearing and feeling kind of in the industry of like, just get through it and be better. I mean, we're, we're trying to, we have conversations about all these things all the time of like revenue management and customer experience. And, you know, how do we acquire that customer and how do we acquire them in a scalable way and how do we drive our views? And I mean, all these things that we're constantly obsessing about. And there are certain roles in hospitality that won't ever disappear. You talked about cleaning, you know, you know, five hours to turn things around. Are there roles that you see disappearing in hospitality? Like, you know, where tech can potentially replace people? It depends how, like what our, what our time scale is. Right. So it's like, eventually I, yeah, I, I would imagine that a robot will clean hotel rooms, no problem. But that might be three years from now, it might be 10, whatever. Um, I think there's also a certain layer of like, not complexity, but what, how much, how much service do you want? So if you're, if we're charging $180 for our place in the winter, and if people stay on a Tuesday and Wednesday night and they come in, they have a certain expectation of like, yeah, this is, this is, I have an expectation. That same room could go for 700, 800 bucks a night in July. And that customer will have a very different expectation, right? So they will, they do not want all text messages and to download an app. And if they, if I want a towel and I'm spending that much, I want a towel in my room soon. I want to call or look out or whatever. I want to tell, I don't want to get deal with someone in India on a chat, you know, and then maybe my towel gets there the next morning or something like that. So I think, I think the, the idea of service will be a differentiator. And I think it's, it's a matter of like, if you're the best, you're going to have great service. And if you're the cheapest, you're probably going to be all right too. So it's like where you, where, where scary is in the middle, right. And figuring out that balance of like, I just read about some resort that's got like a 12 to one staff to guest ratio and they're, they're crushing because they're charging $3,000 a night at some spa in the middle of nowhere. Wait, 12 to one, 12 employees, one guest. Okay. And it's $3,000 a night. It's in the middle of nowhere. So they just built this place right from nothing. Apparently they're doing well. So it's like, I think about that and it's like, that's one extreme. Right. And then, like I said, the other extreme is, you know, everything's self check-in. You never see another person. And I think both have their places. It's a matter of where your product fits in the marketplace. And I think, you know, having, for us having a level of service is, is always going to be important of like, especially if things go wrong, if everything goes that's fine, but this also like, what we found is like customer A can stay in room, you know, this room, customer B can stay in this room and they have very different expectations. B hates people. He wants to avoid the lobby and go straight to his room. And, and he, you will not see him ever. And then you'll see his, he'll check out and leave 20 bucks for the cleaning staff, customer A wants to know where they should eat that night. And, oh, Hey, what, what can I get extra key? And can we get more towels? And we can, oh, this, the hot water heater is not working, you know? And so it's just, it's a matter of addressing both of those in the way they want their experience to go. And that's what we're learning about too, with some of this automation. You mentioned that you traveled a lot. I kind of feel that airlines have a leg up on when it comes to moving certain tasks away from people, right? There are still some countries when you travel in Japan, there's 15 agents behind desks or waiting to service you even at an airline counter, which is great, but that's unusual, right? Like if, if I board a plane in San Diego, I have 500 kiosks in front of me before I talk to somebody. Is that the future of hospitality in your opinion? I mean, in a lot of ways, I hope so because as a consumer, there's nothing more frustrating than spending. I left my house at eight in the morning and now I'm 5 PM at the hotel. I've been traveling all day and now there's seven people in front of me at the line at the hotel. Like all I want to do is go in my hotel room, right? So there is this, there is a miss, I think in that way, just of like not taking that into account, right? Like in the, like in the beginning of my journey, I'm fine. I'm fine. Checking out of the hotel and maybe having to wait for a sec if that were the case. But again, I think it depends on the person because that person might want, Hey, I checked in with this credit card, but I'm changing a credit card or, Hey, can you get near a lower level room or whatever, and then there's the other person who, like I said, it was just like, dude, give me, get me straight to my room. If I can cut through these eight people and I've got everything. And a lot of these guys are doing this with the automatic keys and some of the bigger chains, which, which I do too. And I really liked that experience of, of being able to avoid the front desk. But I think it, I think it's, you know, with, with all this technology and AI and whatnot, I don't think our, we can really comprehend the changes because they're, they're exponential changes and the human mind can't, they can go linear in terms of improvement because that's all we experienced in our lifetime. But I think some of these, like that's what I was saying with the robots cleaning rooms, that will for sure happen. And it could happen, it'll probably happen quicker than any of us think it will. So. Yeah, I can see it happening in Japan soon or, you know, some, some country, maybe it's already happening. We just don't know about it. What's your biggest pet peeve as a, as a guest, you must have stayed what thousands and thousands of room nights or nights somewhere. I would say overselling under delivering. That was something we think about a lot as well as, you know, as a guest, I definitely do, I guess the check-in procedure of, you know, cause I, my kids are a little older, but when I had little kids, it was always like, can I, can I check in at two instead of three? And that way I can get my kid down for a nap and either the non-response or the no, we're cleaning, but they're not clean. I'm totally cool if you really are cleaning up until three, but a lot of times we'd stop in anyway at one 30 and it's like, it's been clean for days, you know, or, you know, what I see sometimes now in hotels as a, as a consumer is like, check-in is three. And I get there at four and the room's not ready. And I'm like, dude, I gave you guys an extra hour. Like, this is not cool. Like, you know, it's like, I get it. Like I get, I'm at the mercy when I'm checking in early, but I, I, I want to be addressed individually and not have some canned response when it is past check-in time, I want to check in. Like, like. You mentioned the chatbot that was serviced by an agent in India. Is that something that you think will completely move to an AI over time? Are we there yet already in your opinion? Some of us are again, it's, it's kind of, I, we deal with some, some different partners and some different operators that are, that are very similar companies. And they're using one's using AI, one's using 10 VAs in the Philippines, right. And they're doing the same things. And, and it's, you know, the, the one thing I will say is the AI company is going to, he'll, he'll eventually win because even though right now, you know, they're the same, it's like, it's once one's really scalable and one's not, you know, when those 12 guys in Philippines get better job opportunities or the internet goes out for a couple of days or whatever happens, you know, you're, you're, you're kind of back to square one. And so, you know, we're spending a lot of time looking to see it's like a lot of time we're spending 30 hours, how to solve a 20 minute problem that sometimes can drive you crazy, but you're like, all I gotta do is figure it out this one time and then we're, and then we'll never have to discuss this problem again. That's through AI, right? Okay. Yeah. I mean, the overseas thing, it just depends on the business. And, you know, again, I think it depends on your product, who your clients are, what their expectations are. I remember talking to a hotel owner recently who said his most successful and most productive hotel employees were sitting in the Philippines, right. And was doing check-ins, checkout reservations, you know, answering the phone as a pretending to be on site at the reception, whatever it is. The only reason he wanted to hire local, the only reason that he didn't hire local is where he couldn't find people, stuff, right? It's like, it's not a salary thing. It's not, it's a mindset and it's a, I don't have the labor available to me in the place that I'm operating, which is scary. It's crazy. It's for sure. It's scary. I think they just passed a thing here saying hospitality workers are getting, are going to get $25 an hour right now in San Diego. Minimum wage. Or minimum wage. Wow. Yeah. It's, it's scary as an operator. Cause you're, you're, you know, that has to be made up somewhere. Right. Like I said, in a lot of, a lot of these organizations or these competitive hotels, or it's a race to the bottom in terms of their pricing. Right. And so it's like, there's, you know, I, like I said, when I'm looking at opportunities, I look at like hotels, but some of these hotels, you're like, they're so bad, but they're sold out, like, you know, but they're even on Google, they're 3.2 or something like that. And you're like, man, who would ever stay here? But you're like, if you just need a place and your expectations are low, like, I guess, I guess it works for some people. I didn't know 3.2 existed, but okay. Nevermind. On Google. Like when you Google it, it's out of five, it's out of five. That is scary. But it sounds to me like the 25 that you, that was just introduced, is that going to help in your opinion, hoteliers, or is this just going to motivate them to, I guess, outsource or, you know, outshore, what's your opinion? What, what is that going to do? I mean, the only way I could argue that it will help them is that we can be more competitive in getting better labor. And like, now we're like, oh, you can make, you can make this much over here. But otherwise, I mean, again, it's, it's, I mean, most hotels aren't crushing it right now. I mean, in terms of like, I think if you, if you took the pulse of kind of everyone, I think pricing has gone up significantly over the last kind of three or four years, like beating inflation even, but I think everything else has too, so it's like, I don't, I don't see this, like this huge win for hoteliers, you know, um, I think it's, I think we're hoping that it continues kind of the momentum going forward, I guess you could say, but I think it's a, yeah, I don't think that everything increasing, I mean, power is going, energy is going up, humans are going up, every, everything's going up. So yeah, hotel rates are too, but it's not, it feels very different as a consumer when I'm going and going like, man, I used to be able to get a hotel room for a hundred dollars and like, and now knowing like on somebody's properties, like I will lose money if I sell that room for a hundred bucks tonight, you know what I mean? So I think it's, that's the challenge, right? Or let's fast forward, uh, to the future, right? Like the start short, your next trip with the family, where are you traveling to? Like my real, like in real life. In real life. Yeah. We're, we're going to Austin at the end of the month for spring break. Oh, nice. That sounds fantastic. Travel in two, three years. What's different? I think just, like I said, automation makes, you know, the travel experience smoother, I guess you could say. I mean, we're using, I use chat GPT all the time when I'm traveling, right? Hey, I'm over here. I'm on the corner of this and this I have 20 minutes, or I want to get to this museum, pick the coolest route and chat GPT knows me and knows the things I like. Right. So they know, Oh, go pass through this more pass through a park or pass through this. And so I think that whole process gets way cleaner. I'm curious to know if like, like we said, we were talking about earlier. It's like when I was doing Olympic tours, people would book two years and then three years in advance. And they'd be like, I'm going to track this night and going to Batman the next morning. I'm going to take a day off. Whereas now people are booking, you know, days before, right. Sometimes day, uh, like I've many times got on a plane somewhere and not had my book, like not had a set where I'm staying, but I'm like, Oh, I'll book it on the plane, you know, and that, that is becoming more normal, I think. I think it's a combination of technology, making things more seamless, you know, and as you see, you get the automation of like, Oh, you want a car with your hotel if you book it, but I think it's just going to be a little less clunky. Right. It knows what you want. It knows what you're used to doing. Right. So this process just gets easier. I always, you always rent a Tesla on Turo, right? So it's like, Oh, it's going to book it for you eventually. Right. Where it just will. And it, it knows you don't want to spend more than 40 bucks a day on this Tesla or whatever it is. Right. And so it's like, you take all this out of it or it knows you want pre-cancellation. Uh, so that's kind of where I'm thinking. More tech, less friction, ultimately. Yeah. And, and, and, and it's a cliche again, I'm sure, I'm sure you guys talk about it all the time, but people want these experiences, right? So it's not just a hotel bed, right. And comparing this queen bed to a place around the block, it's like, Oh, this one has this cool, you know, rooftop bar, or this one, you know, has a, a live band playing, you know, on the patio every day for, for check-in or something like that. Right. And, or, you know, free surfboard rentals or whatever it is. I think people, people are really into the experience and I think that continues, you know, it's, it's getting a little too cliche in some ways. I mean, everyone's doing the, the glamping and things right now. Right. Um, but I, but I do think that's a trend that, that seems to want to continue. Is there anything in your opinion that will disappear from the hotel room? Phones. Okay. No more phones replaced by anything. Uh, maybe like a, maybe an iPad or something like that, where you can, you know, get what you want out of the room. Maybe, um, if it's like on the wall or something, your iPad that has everything, right. Um, in terms of, in terms of your room control, climate control and things like that, I'm trying to think of what else would, that's a, that's a good question. Would disappear. So for my hotel, so. I have to, uh, before we end up, uh, I have to talk a little bit about, uh, tacos in San Diego and, you know, what, what your favorite taco joint is, because I'm still hunting for that, that best taco place I've been going there for 15 years now and, uh, still trying things out, but I'd love to hear yours. Uh, I mean, I love Oscars. Okay. Um, tacos Gordo's is obviously really good. If you, if you go down further South towards the border, um, in Chula or whatever, most of those places or any place is pretty good. I mean, I think it's like, I always joke my analogy for other things is like, there's no bad taco shops and say you would never, you can't survive as a bad taco shop in San Diego, you know, because, because the market's gonna, gonna snuck you out. Right. So, and I use that, I use that example for other things. So I'm trying to work backwards of what that analogy would be like, but I'm always like, ah, yeah, you can, you can't survive. So it's just, I mean, we have really good crap beer here. Same thing. If you opened up a crappy brewery, you'd just be out of business. So for the most part, the brewery, the, the, the level's pretty high, but yeah, I mean, we're, we're eating fish tacos, like at least a few times a week. Taco Tuesday is like a holiday in our family. That's amazing. Um, you live of course in a very, very amazing destination. If it is not San Diego, where would you travel to for vacation? I mean, my go-to is probably, is probably Barcelona. It's got a special place in my heart. So, yeah. I mean, I love Europe. I spent almost 10 years living in Europe. So Barcelona is a home base and pretty much anywhere in Europe. It's fun. Italy, Greece. Fantastic. Adam, thank you so much for joining the program today, sharing your thoughts, your insights, your story. Uh, it's a pleasure having you on the program. Yeah, for sure. It was a fun conversation. All right, take care. That brings us to the end of yet another episode of The Turndown. Huge thanks for all of you to listening. We hope you enjoyed the conversation. Of course, this podcast wouldn't be possible without the amazing team behind the scenes. A massive shout out to the producers, Palak Kahereo, Linda Pejai, Lana Cook, Ricky Sherman, and Elie Verkuhelsen for the incredible research and pre-production work, always keeping us on track. To Paolo Sanchez, thank you for your stellar audio editing and for making us sound so good. And finally, thank you to Ying Liu for her organizational talents and keeping the season on schedule, literally. Remember to subscribe wherever you get your podcasts and follow us for updates and bonus content. Until then, take care and stay curious.