Transcript: Episode 183: Bathtub Disaster

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[00:00:00] Susan Barry: This is Top Floor episode 183. You can find the show notes at topfloorpodcast.com/episode/183. 

[00:00:14] Narrator: Welcome to Top Floor with Susan Barry. This weekly podcast ride up to the top floor features tangible tips and excellent stories from the experts and characters who elevate hospitality. And now your host and elevator operator, Susan Barry.

[00:00:32] Susan Barry: Welcome to the show. Sloan Dean grew up in Georgia and earned degrees in industrial systems engineering and finance from Georgia Tech. When it was time to get a job, Sloan shaped his career by process of elimination, basically finding out what he didn't want to do. Starting in consulting with Oliver Wyman, he eventually transitioned into hospitality. Joining IHG and later Noble Investment Group, where he built expertise in revenue management and operations. Sloan climbed the ranks in the industry at Interstate and Ashford before becoming CEO of Remington Hospitality in the very exciting year of 2020. Under his leadership, the company has grown significantly in third party Management expanding into international markets and focusing on high end boutique and lifestyle hotels. Today, we are going to talk about leadership and hospitality, but before we jump in, we need to answer the call button. 

Call button rings 

The emergency call button is our hotline for hospitality professionals and basically anyone else who has a burning question. If you would like to submit a question, you can call or text me at 850-404-9630. Today's question was submitted by Juan and there's some context for this question, but I'm going to ask it first and then I'll explain what he's asking. What are some of the tasks or responsibilities you had to set aside or stop doing when you became CEO? And so Juan is explaining this whole thing about how He's getting this time management advice that like the most important thing is to eliminate tasks. And I think he's struggling to figure out what things he should eliminate. Quite honestly, I could use some of this advice too. So what do you got Sloan?

[00:02:30] Sloan Dean: Well, the first thing about being a CEO is that you're basically the chief recruiting officer, the chief people officer. And your number one job is do you have other officers in the companies that are inspired and can go and lead their teams? And so the biggest thing that makes people not successful as CEOs is span of control. So I went from individual contributor roles and rose the ranks to a point where now I have over 10,000 employees, and I don't know every single one of those individuals, and I can't touch them every day. It's physically and logistically impossible.

And so you have to have great prioritization and you have to have great people skills to be able to inspire and trust the individuals in your care to go and do that. The second thing is that being a CEO, I need to know a little about a lot of things. They don't teach you that in business school. They don't teach you that in school. What you're taught is to be deep in one category of knowledge. Meaning I grew up in revenue management. I had a very deep revenue management expertise, but then I had to learn legal, had to learn human resources. I had to learn accounting. And so being an effective CEO requires knowing a little about a lot of things.

[00:04:03] Susan Barry: Being a podcast host is a really good way to get that a little bit about a lot of stuff, a little bit of knowledge about a lot of different topics. Before you became the Sloan Dean that the industry knows and loves, you worked in a factory. 

[00:04:19] Sloan Dean: That's right. 

[00:04:19] Susan Barry: What was that like? 

[00:04:21] Sloan Dean: It was hot. I had just graduated high school. I was going to Georgia Tech and you had to have a high school diploma to work at Peachtree Doors and Windows in Gainesville, Georgia. And I took it because it paid the most in kind of northeast rural Georgia. It paid $10 an hour with only a high school diploma and time and a half over 40 and they worked me 60 to 70 hours a week. And so I made more money that summer than my older brother who was interning in investment banking. 

[00:04:52] Susan Barry: Oh my gosh. 

[00:04:53] Sloan Dean: But they didn't, we didn't have air conditioning in the plant. So I ran the metal cutting soldering saws that edged the aluminum frame door. So if you bought a prefab sliding glass door at Home Depot in 1999, I probably edged the aluminum framing for you. And I ran that for 12 hour shifts and it gave me an appreciation of the American workforce. And it also made me realize I don't want to be standing on my feet and an unconditioned factory for 12 to 13 hours every day. And so I better do good in school. It was a wonderful life lesson. And I still remember it vividly. 

[00:05:39] Susan Barry: Would you want your kids to do a job like that? Or do you hope they don't have to?

[00:05:44] Sloan Dean: No, a hundred percent. I think the path to greatness requires resilience. I very much, I come from a very lower middle class family in Georgia. Both my parents were self made and came from frankly, very humble beginnings as did I. And I really do think that kids that have to face adversity, that have to pay their way. Some that have a blue collar job are better leaders in the end. I remind my 12 year old who is getting ready to turn 13, that it's 14 or 15 in Texas, you can go get a part time job. It's coming. 

[00:06:28] Susan Barry: Oh, wow. You interviewed at I think more than 40 companies before you landed your first job. What did that experience teach you about decision making in terms of a career? 

[00:06:42] Sloan Dean: Yeah, I had, I was pretty lucky. I have an older brother who's been a great mentor and is a great human. And he had gone into investment banking and he's been very successful, but he was working a hundred hours a week. Literally he had no life and I didn't want that for myself. But every job I had had prior, whether it was working in manufacturing plant, working on a golf course, I co-oped with Bell South, which is now part of AT& T. I had interned at GE doing time studies in manufacturing, and frankly, I didn't like any of it. And so towards the end of college, I got a little paranoid about being locked into one industry because I didn't know what I wanted to do. And so many kids or young adults don't. And I had seen my brother get locked into investment banking.

And so I, well, I think it was 46 companies I interviewed with. I think I had seven or eight job offers. It was from Walmart to Schlumberger to Bank of America. It was all across. And I picked management consulting because it didn't require me to pick an industry. It was, hey, you can go do, and I ended up doing casework for American Airlines, for CVS pharmacy, for utility companies. And while it was still a lot of hours of work, I was working 70 hours a week and traveling nonstop. That's why I chose that job is because I didn't want to get locked into one industry. 

[00:08:14] Susan Barry: It's interesting. I bet that also helps with the know a little bit about a lot of different things, right?

[00:08:20] Sloan Dean: Absolutely. Absolutely. I got exposed to all kinds of business problems. 

[00:08:25] Susan Barry: Interesting. Well, I talked about this a little bit already, but you and I have both often been the youngest person in the room, like the youngest person to do a job. I used to do this thing, like I would work all hours of the day and night. I would stay in the office till like 11 o'clock at night because I wanted to make sure that nobody found out that I was the age I was, like it was, you know, some kind of secret or whatever.

[00:08:52] Sloan Dean: I was that way until I was like my early to mid thirties, I was super paranoid. 

[00:08:57] Susan Barry: Yeah. Now obviously looking back, I realized that I wasn't fooling anyone. Like, they didn't hire me because they thought I knew everything. They hired me because I was young and cheap. But at the time, I didn't realize that. As one of the, if not the youngest hotel management company CEOs, what has that experience been like for you? Have you faced challenges because of it? Have you ignored challenges? You know what I mean? How have you sort of handled that? Or do you wish I wouldn't have brought up the fact that you're the youngest? 

[00:09:30] Sloan Dean: I don't know if I'm the youngest. Still, I was 36 when I became the new leader of the company and in '18 and then was elevated to CEO, in late ’19, and I'm 43 now. And I was the same way. You know, I had gray hair early and I dye it now.

[00:09:47] Susan Barry: Mm-hmm. 

[00:09:48] Sloan Dean: 'Cause I'm 43, but in my twenties I had, I was salt and pepper. And so I think people assumed I was in my thirties and in like, when I was the head of revenue management noble, I was 26. I remember I had dinner with Ned Shaw and he's like, you're 26? I thought you were 33. So it's funny that you, if you're successful early, you're a little paranoid about people knowing your age. But as it relates to my age now as CEO, I think there was apprehension by a lot of folks. Actually, the board took four and a half months to choose me as a new leader. And my age was the primary, it was both a strategic benefit because I could have 20, 30 years of runway, but I had not done the job. And somebody has to first take the leap on you. I see my age is very much a strategic benefit. And I'll give you kind of three really good reasons why. One is that being a CEO or high powered executive is like being in an athlete. And it requires a lot of energy. I travel nonstop. I'm constantly doing things. And if you're younger, it's just like being an athlete. It is easier to do things. And I think that physical requirement that it takes is sometimes overshadowed. It's why I work out five days a week. Because I think it translates into being a better executive because I sleep better, I have better energy.

The second thing is that, it wasn't this way when I first started at 36, but it is now at 43. I'm the oldest millennial. I was born in May, 1981, and I sit right on the fence of all my direct reports are Gen X. Or baby boomers and everybody that is underneath me or millennials and Gen Z. And now the workforce is more millennial, Gen Z. And I can relate to both because my older brother is a Gen X my parents are baby boomers. And so I feel like I can relate to the workforce, but also at the same time, I have a lot of people that are older than me that I can inspire. And I see most of my peers are Gen X or baby boomers. They struggle with communicating to the younger generation.

And so I feel like it's a strategic communication, relatability factor. And then the third thing, is I can understand the consumer better. The fact that COVID had a, I think a bigger psychological impact on millennials and Gen Z because they're in formative years more than it did on baby boomers and Gen X. I can relate to that from a consumer perspective, running a big travel company where we do, you know, 1. 6 billion in consumer revenue every year running through our hotels. And I think that my age is a strategic advantage in doing so. I also don't bring bias in. Experience to a certain level is very beneficial. But actually, I'm a contrarian that I think if you get lazy and you rely on just your experiences, you get older, you make mistakes and you're not innovative enough. And I think that's one of the reasons travel is often a ladder of adoption of innovation is you have a lot of older leaders that are not, they rely on their experience instead of aptitude and learning.

[00:13:12] Susan Barry: That's a really good and interesting point. It makes me think about when I was doing a lot of consulting on property for hotels. So after I started my company, I wasn't working on property, but I did a lot of projects on property. And I was always sort of mystified by these hotels where the GM had been there like eight, nine years. I'm like, you got to get these people out of here, get some fresh blood or you're never going to change the revenue patterns at this property, doesn't make sense because they're just doing what they know.

[00:13:39] Sloan Dean: Yeah. Do you look at just pure psychology? And this is just medical. Okay. Your prefrontal cortex, which is the kind of sophisticated part of your brain that you think controls and allows you to do critical thought and lead people starts to decline at 55 and then declines precipitously through your 60s. And so your peak performance years, I’m just talking about mental acuity, is from kind of 35 to 55. Maybe if you're physically taking care of yourself is up to 65. That's why you have age limits in certain jobs, certain boards.

[00:14:16] Susan Barry: Not enough though. 

[00:14:18] Sloan Dean: Not enough. And so I think the sweet spot of great executives is this 35 to 55. And I'm in that window. And I think that sometimes is often overthought when you have CEOs that are 60, 61. I mean, frankly, they're just in terms of how the human body works. They're starting to slow down. And I know that's a very controversial comment, but they're it. That's why there's age limits on board seats and in certain key job functions. 

[00:14:50] Susan Barry: It's true. Absolutely. Remington has made a significant push into the third party hotel management space after managing mostly owned assets. What drives that strategy?

[00:15:02] Sloan Dean: Well first, because we're owned by Astrid Inc. and the shareholders and the board want to see us grow Evita as a for profit management company. It's capitalism at its finest. But beyond that, up until I took over in 2018, we had just been the captive management company of our affiliate REITs, Ashford Hospitality Trust and Braemar Hotels and Resorts, which were actually spun out of Remington up until 2003. Remington was an owner operator and then spun off all the hotel ownership. 

[00:15:38] Susan Barry: Oh, I didn't know that. 

[00:15:40] Sloan Dean: So if you look at the history in the nineties, Remington owned and managed all, they were developer and then we spun off the ownership into publicly traded recent 2003, almost like, you know, Hilton had their managed hotels and they owned and managed and they spun it off into park hotels. And then Marriott spun off their own to manage into host. Well, we did the same thing in 2003, Hostility Trust and Braemar, which were kind of seated, publicly traded companies. Now they're totally separate companies today. But as the board brought me in, one of the reasons I was hired was, well, we are an amazing management company that only manages for our two affiliate REITs and one city, the city of Marietta in Atlanta.

We think we could all offer something great to the industry and make more money doing so. And then, so we've started that really right as COVID was happening. I just hired a new chief investment officer to start going into third party and then COVID hit. Fast forward to today. We are now 144 hotels. Only 55 of them are owned by our affiliate public companies. And so we are two thirds, third party. We have transformed. We were 90 hotels in 2019. 89 were owned by our affiliate REITs. So today we're 144 and only a third are owned by them. So it's been a big transformation. 

[00:17:07] Susan Barry: That is a huge shift. I have a theory about why it's worked, but I won’t load the question. So many hotel management companies, I think, try to be all things to all people. Quite frankly, many hotel, everything tries to be all things to all people. You and Remington have taken a more focused approach for differentiation. Do you think that that's the reason why you've been able to change that mix of owned and managed hotels specializing important in this business, or does it even matter? 

[00:17:45] Sloan Dean: Yes, it's very much matters. The definition of strategy strategy is about sacrifice. It is really a master of many is a master of none, particularly in the hospitality business. And so a core part of our success has been that we only manage upscale and above quality hotels really focused on upper upscale and luxury. So more sophisticated operations. F and B is far more important. The entire customer experience is more important. We've also grown a lot in leisure resorts. And then secondly, we focus on brands of families that are very high quality, like Marriott, Hilton, Hyatt, IHG.

That's where all our brand and hotels fall and or upper upscale and above independent hotels. So we kind of have to swim lanes. It's kind of call it full service, city center, core hotels or really big, sophisticated resorts and independent hotels. That's our swim lane and we stick to it now. We still manage a good many large urban select service about 30. But they're high quality, tend to be Marriott, Hilton high at IHG branded. If you're trying to do everything, you dilute the product. I do think there is a way where you can be good at multiple things and have different business verticals. And one of the things that we've really focused on is food and beverage, where frankly, I have a team of five, several culinary winning chefs that are above property and we do $350 million a year at F&B.

So we're like a big restaurant group too. And we treat it that way. And that's core to what we do. But yes, to answer your question, being very focused on growth and intentional with growth is why we've been successful. And frankly, we lose very few contracts and I think that, your best client is your current client. You know, because we manage for a lot of private equity family office, they frankly have multiple management companies in the easiest way is for another, a current owner to say, Hey, you're doing a great job here. I'm going to hire you for the next deal. 

[00:20:03] Susan Barry: I think something that people forget about being differentiated in terms of what you say publicly or like the way that you position your company is it doesn't mean you're not allowed to do something else. You know what I mean? Like if you say we're specialists in luxury leisure resorts, it doesn't mean if the right whatever comes along, you're not like the cops are going to come and put you in jail for breaking your own rules. We referred to age earlier and also I think a little about generational friction that comes up a ton in the workplace. There are 40 bazillion articles written about it every day. But I think especially in industries with high turnover, people are very want to say like, Oh, the young people don't want to work or they're lazy or whatever the case may be. Is that true? Or is there something else going on? Like, what do older leaders need to understand about working with Gen Z and younger millennials? 

[00:21:02] Sloan Dean: Yeah, that's a great question. I love it, by the way. I'm really passionate about generational changes in the workforce. My first question, if you're a Gen X or a baby boomer and you're listening in and you think millennials and Gen Z are lazy, who are their parents?

[00:21:24] Susan Barry: What a good thing to say. 

[00:21:28] Sloan Dean: It's a good reframe, right? Who created this lazy workforce, entitled workforce. Look in the mirror. It's a good reframe and I think it's a gross misconception. I do think that the younger generation cares more about the company's why, you have to tell them what, how does their job add up to company success? What is the company's mission? They also don't want to just go work at the company for 35 years blindly and wait for the next thing. They are more willing to job swap, which is not necessarily a bad thing because if they're high aptitude, they're delivering a lot of value. It's you incentivize them by promotions and greater responsibilities. And the work life balance has come back into the fold and I think for American Society That's not a bad thing. 

You know, it's probably not healthy to work 100 hours a week. And the opposite thing is the younger generation values travel more than the older generation. My parents are baby boomers. Their generation care and their parents were depression babies. They cared more about the things that they own, the tangible things. The younger generation cares more about experiences. And that's great for travel. Amazing consumers of travel. The younger person spends a more disproportionate amount of their wallet on travel than the older generation does. And I think that is really great for the industry. So I think it's about the older leaders finding a new way to communicate, a new way to inspire. I always say Simon Sinek had it right. Lead with why, you have to constantly iteratively tell the younger generation why they should be inspired to work where they're working. Why is Remington Hospitality the best place to work in hotels? And it just requires more work in communicating. And I think that's a good thing.

[00:23:28] Susan Barry: We like to make sure that our listeners come away from every single episode of Top Floor with some very practical and tangible things to try, either in their businesses or in their personal lives. You transformed Remington's leadership team and culture, so it's tall order, but it happened. What advice do you have for leaders who are trying to modernize or transform their own organizations?

[00:23:59] Sloan Dean: That is a great question. Boy, I could go on and on about that. Let me start with probably the most important thing. First, progress not perfection. Okay. I'm a huge tennis fan. Roger Federer is one of my favorite tennis players of all time. He won right about 80% of his matches lifetime. He then, of all the points he played, he only won 54%. A few percentage points make the difference between greatness and mediocrity, and we don't understand that sometimes in business, and so it is that daily pursuit of being 1% better that makes all the difference in the world that humans can't see compounding in small steps, compounded over long periods of time and how it leads to greatness, and so it is daily disciplined progress, not perfection.

Progress is not linear. Everybody wants to see that they want to see their 401k just going up and up and up. That does not happen. And so you will have days, you will have months, you have quarters where you step back or you get a setback and it is just having the mental fortitude and the discipline and the processes and procedures and the people around you so that you're just constantly focused on being 1 percent better than you were yesterday. We have too much comparison to others. Comparison is not only the thief. Joy is also a thief in business. If you look at great companies, they do not compare themselves to others. They are just trying to be better versus themselves. Amazon is a good example of that. 

I have a great story when I went to go to visit Booking.com for the first time in Amsterdam, then CEO, I asked them who their biggest competitor was, and they said themselves, and I thought he was full of it. And now I understand that's what he meant. It's why they are, them and Airbnb, are the most valuable travel companies in the world. And so that is probably first progress, not perfection. The second thing is when it comes to having the right people, don't waste time. I was a new leader at 36, I inherited 21 direct reports. Many of them had more than a decade of experience and I was really hesitant to make change because I didn't want to be seen as the grim reaper or the new young, arrogant guy.

[00:26:34] Susan Barry: The bad guy.

[00:26:35] Sloan Dean: That came in and fired a bunch of people. And frankly, COVID was a bit of a gift in that we sunset some officers that needed to leave. And I knew for a long time that it was kind of a cultural problem. And I think if I look back in my career, particularly these last seven years, my biggest mistakes have not been moving on from the wrong person fast enough. And that's not giving up on people. It is having confidence in your judgment and you're the CEO or the leader for a reason. And if someone has been struggling for a long period of time, you've given giving them coaching that permeates into the organization and having a bad chief accounting officer, a bad chief commercial officer will bleed in, the organization will hold you back. And so don't hesitate to change it out and get the right team. Because if you're running a big scale organization, you can't do it yourself. Those are probably, if you do those things right. I can go on and on and we can talk for another half an hour. Those will make you successful. Those are probably two of the big things you got to really get right.

[00:27:47] Susan Barry: I mean, it's also unkind to keep people who aren't successful in a position because there is the right fit for them somewhere else. And the longer you keep them holding on, the longer you prevent them from finding that perfect fit. So I agree with you. It's hard to do though. It's hard to trust your instincts, I think, especially on the front end of a project or the beginning of something.

[00:28:12] Sloan Dean: Sometimes being the leader is a hard thing. I mean, two examples, the people that got you to a place are often not the people that can carry you forward in particularly in business, and that is a really hard thing to acknowledge. A good example is IBM. Had they not shed their hardware business, they would not be in business today, and I can only imagine how hard that was then. The most profitable part of Amazon is Amazon Web Services. Now, it lost money for years before it became profitable and look at the value transfer there. Sometimes making the right decision looks very difficult in the short term, but when you look back, you think I should have done that faster. 

[00:28:55] Susan Barry: It's true. So speaking of faster. The hotel industry is not very known for being fast, but AI is being sort of hailed as a game changer across every industry. I'm not sure that ours has been super quick to adopt it. How are you thinking about AI in hotels right now? Like, what role do you see automation playing in operations or finance or all of those things over the next decade?

[00:29:27] Sloan Dean: So I'm going to work back in reverse and answering this. I think it's going to impact consumer decisions first, meaning that how you book a hotel, it's already happening. What will happen is that instead of going to Marriott.com or going to Expedia.com or Booking .com or Google, over half of all travel inspiration happens with the Google search to start. Right now, that is changing. It's why Google search ads is coming down. Then eventually you will go to either your travel agent, AI or ChatGBT and you'll say, I'm going to Barcelona city center. I want walkability of the beach. Give me the best four star hotel and it will spit out one hotel. And so we are going to have a transformational change, and we're in the middle of that over the next two to four years of how consumers book hotels.

I think that is the biggest change that the one's talking about. I think secondly, in the next few years, we will see office jobs related to travel, white collar jobs be intermediated and replaced faster than the physical hourly jobs there on property simply because large language models don't require robotics, meaning that we can replace attorneys, we can replace revenue managers, we can do digital marketing. So there'll be actually less high paid corporate hotel jobs in three to four years than there are today, but those people if they can become more productive and earn more. So there's less jobs, but the good thing is for the folks in those jobs, they make more. 

[00:31:18] Susan Barry: I totally agree with that. That's to me, that is the most prescient point that you've made in this entire conversation. I think you're absolutely right. 

[00:31:28] Sloan Dean: Those jobs get intermediate. It's interesting. It actually is leveled. The playing field for intelligence isn't as valuable as it was. You look at human evolution. It was first physical strength. Now it's IQ. It's going to become emotional intelligence because that's harder for large language models to replicate.

[00:31:45] Susan Barry: And personality. It better be personality, too. There has to be some kind of, like, unique voice, interesting things to say that can't be spit out by ChatGPT. Anyway, sorry to interrupt you. 

[00:31:58] Sloan Dean: No, I totally agree with you. And because robotics, the mechanical portions are a little bit further behind, we will, in your and my career, we'll have full automation or mostly automation of departments, so there will. The first thing that I think physically gets automated is driving. So you already have the technology to have where we don't need truck drivers. We don't need Uber drivers, cab drivers. It's almost we're going through this phase of humans are just not comfortable with with it yet, but that happens first. But we are testing some robots and hotels. They're not really good. You know we're probably 5 to 10 years away from having a robot that can clean a room. It's just a lot of nuance. Physicality. So I think having F&B and housekeeping and some of the very physical tasks be automated. We're really a decade or so away. But then I think if you play it out game theory, what becomes is okay, I'm going on a vacation in 2040. Do I want to go to the robot hotel or I want to go to the hotel that interact with humans. And that is going to be a real thing is okay, like, I offer a unique human interaction experience, or is it that's going to be a real saying in our industry and how that plays out. I think there's a good game theory discussion and it'll happen in the next couple of decades. 

[00:33:34] Susan Barry: Well, you become the line staff and hotels go from having to execute physical tasks to being hosts and.

[00:33:43] Sloan Dean: That’s 100 percent 

[00:33:44] Susan Barry: Making the experience happen. It's sort of the dream. What I wonder though is will the owners of the real estate be willing to pay for experienced drivers? You know what I mean? Like hosts or people who are making the experience stay. And I guess it'll just come down to whether consumers are willing to pay for it. 

[00:34:08] Sloan Dean: I think if consumers willing to pay for it, you'd probably make an argument that if you look at like mid scale and economy hotels today, where it's more like staying in an apartment, there's not a lot of services, they're probably very, very automated. If you're going and staying in the Four Seasons that The White Lotus is being filmed at, which is one of my favorite shows by the way, you probably have a lot of hosts and you're paying for it through higher rates and a resort fee and all kinds of things. So I think you're right. If consumers are willing to pay for it, owners are probably willing to have that service at the hotel level.

[00:34:41] Susan Barry: All right. It's time for you to predict the future. We've reached the fortune telling portion of this show. So I'm going to ask you these and then we'll come back and see if you got it right. What is a prediction you have in general about the future of third party hotel management? 

[00:34:57] Sloan Dean: Well, in the U.S. it keeps up because I believe that Marriott and Hilton and others, Hyatt too, have realized they can make more money in the franchise model.

[00:35:11] Susan Barry: And in the credit card business. 

[00:35:14] Sloan Dean: Exactly. Oh yeah. And loyalty business, right? You know, Marriott Bonvoy is its own business in and of itself and it's more profitable for them and they're all about net unit growth. There's 65,000 hotels in the U.S. the largest addressable market is owner operator, and I think that continues. The second is third party, and the third is brand managed. And I think the brands are getting out of management, which means more third party. And a lot of owners are waking up to well, the third party owner can pay for themselves by better performance. And so I think it just continues. I mean, we're going to continue to have more and more third party hotels in North America as a percentage of the pie and that benefits companies like us.

[00:36:03] Susan Barry: If you could wave a magic wand and change something about the hospitality industry, what would you change? 

[00:36:10] Sloan Dean: I think I would go back in time and change the capital structure of some of the hotels because that's where a lot of the problems start. You have a lot of deals pre financial crisis and post financial crisis where interest rates were artificially low, cheap debt allows for family office, private equity to be undisciplined. And you now have interest rates, super high. And you have owners not making a lot of money, but they kind of made their own bed and they didn't have longer vision of like, what should be the capital structure of a hotel? And so if you look at hotels that are struggling in North America, most of them are plagued with a capital structure that are too levered.

Maybe they've also got Mez on top. They've also deferred CapEx. So you have a lot of under renovated hotels all through the U.S. and it's good. You said, what is the core issue is the capital structure of the hotel. And frankly, there were a lot of deals that happened in 2014 through 2019, that probably should never happen if people were pragmatic and took a longer vision on what's going to happen with interest rates, should I really have this deal leveraged 75, 80%. And we still are dealing with that today. One of the main reasons that a lot of hotels are under renovated outside of just COVID is because his interest expense has gone up. Free cash flow to renovate hotels has gone down. And so there's this wave of hotels in the U.S. thousands that need to get renovated that I don't know how they would happen without some type of transaction. So I think that would be what I try to change is the capital structure of the industry. And then we wouldn't have as many problems. 

[00:37:59] Susan Barry: It's so funny that that was your answer because I wrote this whole post on LinkedIn yesterday about the fact that if your business relies on 0% interest rates, you do not have a business.

[00:38:10] Sloan Dean: Yeah, that's very true. 

[00:38:11] Susan Barry: And here we are. It's exactly the same. 

[00:38:14] Sloan Dean: And rates are not coming down nearly as fast because inflation is going to be sticky because the job market is sticky. I think we're in for higher than what they've been interest rates for quite some time. 

[00:38:29] Susan Barry: I don't think the listeners can hear me nodding sagely, but I am nodding wisely. So what legacy do you want to leave in hospitality?

[00:38:38] Sloan Dean: I want to have a lot of people show up to my funeral and say that guy made me feel better about myself and inspired me to work and travel. You know, the way I admire Bill Marriott and the Marriott family massively, we have a lot, but Arnie Sorenson was an amazing leader. I didn't know him that well, but I was very inspired by him. I don't put myself at that level by any means, but I just want, you know, it's not about how much money you have in your bank account when you depart this world, it matters how many people show up your funeral. And I want to have a disproportionate influence on making Remington the best place to work, period, and to inspire people to work and travel. And then that bleeds into the consumer and it bleeds into their families. I want to just make a difference in people's lives. It's about people. It's not about making a lot of money and it's not about Remington managing. I get the question of how many hotels does Remington want to have? And I say it's the wrong question. I just want us to be the best operator, the best place to work, and if we do that, we'll grow. 

[00:39:53] Susan Barry: It's true. Well, it's hard for me to transition from what was a very moving answer to my question to now ultimate silliness, but we're going to do it. So before we tell Sloan goodbye, we are going to head down to the loading dock where all of the best stories get told.

Elevator voice announces, “Going down.”

[00:40:16] Susan Barry: The loading dock is brought to you by Foxfold, creator of refillable toilet paper and facial tissue dispensers for hotels that lower costs and reduce waste. I talked to their CEO, Ludo, in episode 143, and I have to tell you, this product is really cool. He sent me a sample and I love it. If you want to stop seeing half used rolls of toilet paper on your loading dock, visit foxfold. com. Okay, Sloan, what is a story you would only tell me on the loading dock? 

[00:40:50] Sloan Dean: I would only tell you on a loading dock that please, please, guests, when you stay in a hotel, do not start to run a bath and then go and hit the mini bar in your hotel multiple times and then pass out and go to sleep and have the bathtub overflow and then flood floors below.

[00:41:15] Susan Barry: Oh, no. 

[00:41:16] Sloan Dean: And I can't, I have had it happen at multiple hotels. 

[00:41:21] Susan Barry: Are you serious? 

[00:41:22] Sloan Dean: Yes, multiple hotels with $100,000 of damage with someone starting a bath, getting drunk, passing out and it flooding a floor. It has happened to me. I can think of three different occasions. So if you're staying in a hotel, feel free, you're a grown adult, do what you want, but just please do not pass out while you're running a bath and flood the building because that will tend to lead to the hotel owner wanting to sue the consumer. 

[00:41:58] Susan Barry: So that was what I was going to ask you. Does the guest take end up being responsible for that or is it more of an insurance thing?

[00:42:05] Sloan Dean: You have insurance, but what a lot of, they have huge deductibles. Most property insurance has large deductibles. And so, yes, it is the right now you would then put an individual potentially into bankruptcy, or I've even had it where it was a business traveler. They were on a huge account, this produced thousands of room nights and the head of travel for that company got involved. And we had to negotiate. So if you're a consumer listening in, just don't do it. You don't want the hassle. You don't want some hotels threatening you. Yes, of course, they have property insurance, but in some cases, certain deductibles that hotels are a quarter million dollars. So if you did $150,000 of damage. That hotel is out of pocket, not the insurance carrier for, and they may come after you. So just don't draw a bath. 

[00:42:59] Susan Barry: I mean, don't take a bath in a hotel anyway, take a bath at home. It's fine. You don't need to take a bath. Sloan Dean, this has been an absolute pleasure. Thank you so much for being here. I know that our listeners loved hearing about your career and your advice and I really appreciate you riding up to the top floor.

[00:43:18] Sloan Dean: Thank you, Susan. This has been so much fun. Really appreciate it. 

[00:43:23] Susan Barry: Thank you for listening. You can find the show notes at topfloorpodcast.com/episode/183. Jonathan Albano is our editor, producer, and all around genius. He even wrote and performed our theme song with vocals by Cameron Albano. You can subscribe to Top Floor on Apple Podcasts, Spotify, or wherever you like to listen. And your rating or review will go a long way in helping us give you more of what you like.

[00:43:59] Narrator: Thanks for listening to the Top Floor Podcast at www.topfloorpodcast.com. Have a hospitality marketing question? Reach us at 850-404-9630 to be featured in a future episode.