Adam Dailey
What I’m seeing and hearing and feeling kind of for in the industry of, like, just get through it and be better. We have conversations about all these things all the time of, like, 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?
Sebastien Leitner
Welcome to the Turndown. Today, we dive into the dynamic world of hospitality and real estate in Cloud Betson’s hometown, San Diego, with Adam Daley, 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 US twenty five or top US twenty five markets according to SDR. Twenty nine hundred rooms in construction, another twenty two hundred rooms in final planning. San Diego has thirteen thousand Airbnb listing and only two thousand 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 Turn On. Adam, it’s a pleasure to have you on the program. Welcome today.
Adam Dailey
Thanks for having me. It’s awesome to be here.
Sebastien Leitner
Absolutely. Absolutely. I I wanna kick it off with our standard opening question, which is what is keeping you up at night these days?
Adam Dailey
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 kinda 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 wanna lend and, you know, the it’s it’s harder to proforma 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?
Sebastien Leitner
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.
Adam Dailey
I mean, I think it’s, you know, twenty twenty four wasn’t, like, the best year for hospitality. It wasn’t bad necessarily, but it 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 wanna touch hospitality anyway. Like, in general, a bank you know, probably eighty, eighty five percent of the banks are like, 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, kinda 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 gonna happen. 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. It’s not like people are scared necessarily, but they’re just they’re just kinda weirded out, and they don’t know what’s next. Right? So they’re not gonna underwrite things. And so that that’s kinda what we’re seeing is just, like, the banks are causing, like, a bit of, like, panic down.
Sebastien Leitner
And is this panic recently? Like, is this you know, we have to kinda talk about the election probably, right, a little bit. Is is this, like, last twelve months, last six months, last three months? Give give me a sense for
Adam Dailey
Yeah. I mean, I I would say when Trump was elected, I would say there was all this, like, oh, it’s gonna be good. The economy’s gonna be good. Like, this might be bad in other ways, but he’s gonna fix the economy. We’re gonna have a stock market up everything, you know, interest rates because he’s a real estate investor. Everything’s gonna be great. Free tacos for everybody. Right?
But and I think we saw a bump for, like, ten 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, 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 then we’re gonna get, you know, more conservative again. And so I think it’s it’s, it’s just this environment where no one’s, like, scared. 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 kinda, like I said, what what’s keeping me up at night? Did I usually have four or five deals kinda 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 gonna push through and get this done no matter what, whereas I’ve had those in the past.
Sebastien Leitner
You’re operating mostly in San Diego area. Is that fair?
Adam Dailey
Yeah. All in San Diego County.
Sebastien Leitner
Let’s talk about San Diego as a destination. Right? Like, I mean, you’re you’re in hospitality there. A lot has happened since I’ve been coming to San Diego probably twenty, twenty five years ago for the first time. It has seen a significant boom, I assume as a city. What else has changed in San Diego in the last few years?
Adam Dailey
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, like some other places on the West Coast, like Portland and Seattle and 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 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 wanna get out of, you know, wherever they are, Nebraska or 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 in 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 what 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 they write checks, 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.
Sebastien Leitner
That’s amazing. That’s amazing. And your portfolio, which I found fascinating, is covering vacation rentals, hotels, and hostels. Right? Like, you you’ve you’ve played in almost every type of hospitality. What’s your favorite?
Adam Dailey
I haven’t thought about it like that. I mean, I’m not, like, the best operator. So it’s like, for me, I like 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. 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 kinda the next deal.
So for me, it kinda depends on it it depends on the opportunity. You know? It’s like this this latest deal we did was a eighteen room hotel at Mission Beach, and it’s the you know, might be one of the best locations in all San Diego. So it’s like it’s very it was very exciting because everyone knows where it is. And it’s just like I said, it’s this amazing kind of location and and opportunity, but it’s it’s not easy. You know, it wasn’t the easiest deal. It wasn’t like the slam you know, the biggest, like, slam dunk in terms of, like, the financing or the 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 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 and 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 up 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 in that in that component. So you to me, I would never wanna buy something where it doesn’t have, like, a b and a c plan, like a a couple backup plans to work and survive.
Sebastien Leitner
And and have more avenues potentially for revenue. Right? Do you I mean, that’s what COVID taught us. Right?
Adam Dailey
I mean, we had a boutique hotel in the heart of San Diego, and 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 they it was homeless pea I 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 they 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 dehedge 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 thirty, sixty, ninety days type of thing.
Sebastien Leitner
Makes sense. 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?
Adam Dailey
I mean, San Diego, it’s like one of these, like, it’s on the radar, but it’s it’s not. It’s kinda 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 who live here don’t want to promote or feel the need to promote San Diego, you know, everywhere.
Sebastien Leitner
For you, it’s the best kept secret. Like, you you
Adam Dailey
It it is. And 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 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? It’s having this uniqueness and and when you go in neighborhoods and not feeling, you know, everything’s like so Panella.
Sebastien Leitner
Okay. And how how does that translate then to the, I guess, hotel culture of independent versus, you know, the Wyndhams, the choices, the of which there are fewer in San Diego than there are independent hotels?
Adam Dailey
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 three hundred 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 commissioning, you have to deal with the city, you have to deal and you’re you’re talking about years and years and years and years of yeah. Amy, you’re you’re if you were wanting to do something like that, I would I would imagine it’d take five to ten years at least. So the red tape is enormous to go forward. Which is which which is the opportunity for a lot of people too because, I mean, most people wanna stay out of California. Right? But if you can deal with the politics, you know, then the in in the bureaucracy and the red tape, then you can there’s some good opportunities if you’re patient.
Sebastien Leitner
Yeah. 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 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?
Adam Dailey
It’s obviously a cliche to talk about location, location, location, but I don’t want to apologize for the location. I don’t wanna sell a new like, I don’t wanna attract people to this new location because it’s gonna be great, and I don’t wanna be part of that that group, that lobbying group that’s like, no. Trust me. This neighborhood’s gonna be great in fifteen years. I’ll get on the board, and I’ll help attract 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 the I’m I’m wait till 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 and put my touch on it and where I can take ADRs and double them or or whatever. Right? Because they’re they’re not off is 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 that’s the main things I look for. Right?
Sebastien Leitner
So it has to be something where you see the opportunity, but it’s not perfect. Like, you, yeah, like, you wanna 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?
Adam Dailey
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 have 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, because because because San Diego is competitive in terms of what I do and looking at these properties. So it’s like the uglier, the better. I kinda always joke.
Sebastien Leitner
What’s the, project you’re most proud of?
Adam Dailey
That’s a good question. I 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 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 kinda usually, I’m kind of, like, boutique y, but also, like, I don’t wanna 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 gonna go there and you’re gonna have a good time. You’re gonna be satisfied, but you might not tell your best friends, like, you gotta go visit this hotel the next time you see San Diego.
Whereas, like, the the new one we did in board the Boardwalk Hotel in in Mission Beach, it’s it’s it’s one of those, like, you would tell your best friend, like, you gotta 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.
Sebastien Leitner
Nice. Nice. Is there a deal you lost that you regret losing?
Adam Dailey
Yeah. I mean, there’s always those types of deals, and ironically, one or two of them sometimes come back. And, you know, 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’re 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, eight hundred thousand more than it was a few years ago, and they they still didn’t do a good job of fixing it up. You know?
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, nineteen ninety five, 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, five hundred 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, ten 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 I think about that a lot as we’re 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 kinda manipulate it. Right? Like, you self sabotage yourself because you’re like, well, this really needs these ADRs are one twenty, but they need to be one forty. But I think they could be one four. I think I could actually do better than, you know, what I was thinking about earlier. So, yeah, I’m gonna change it to one forty, and it’s tough when you when you do that, right, when you get too emotional about these transactions.
Sebastien Leitner
I wanna take a step back and and and understand how you became Adam Dailey 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?
Adam Dailey
So I like you mentioned, I was an athlete. I competed in the, US Olympic trials. And a few years after that, I got an opportunity to buy Olympic tickets from from the US 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 that at that point in two thousand three. And it was like, I’m moving to Athens, and I’m gonna set up an Olympic business with all the tickets I bought. I’m gonna book a hotel and just sell them to my friends and their family. Their you know, sell them to athletes’ families. And I ended up selling to a lot more than just kinda 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 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, kids born, you know, out of the country, and it was and then and, yeah, and I remember in Vancouver, we spent a million dollars on a hotel. And I was like, man, I wanna 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? I was like, you know 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 I wanna be in I want and I liked the idea of buying that for a month and selling it out for three nights, four nights, ten nights to these different, you know, the Canadian hockey team or or whatever. I kinda liked the game, the transaction game too. So and I liked the idea of, like, 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. Right?
Sebastien Leitner
Fast forward from Olympic to real estate.
Adam Dailey
Yeah. So I I had a couple houses in Little Italy, a neighborhood here, and and, and was just doing, you know, 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 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 fifty percent 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, like, 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, just all of it, and and, you know, kinda buy more properties is kind of the that was, again, the the the thesis I think I had in my head all along.
Sebastien Leitner
So the skills you developed early on when you packaged Olympic tickets with, you know, stay accommodation, that’s still something you’re leveraging today. Right? You’re you’re still looking
Adam Dailey
Yeah. And it’s for opportunity. That’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 I have kids that I 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, oh, this is a nice touch. They put fresh flowers on the table or, man, they really messed this up by not by not bringing in the trash cans or or whatever it is. Right?
To me, it’s like, it’s about kinda being a student as well because I love traveling. I always have loved travel. And so I wanna 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 and that they will tell their friends about versus, you know, versus the other properties that are that are just kind of transactional.
Sebastien Leitner
Now when we talk to operators, and I think you are an operator too. Right? You own or you’re involved in in a property. They’re facing very different challenges. Right? Banks are maybe less less prevalent or the day to day changes, challenges on banking is maybe less important to them. But they talk to us about I have labor shortages, my cost of, you know, operating, you know, is increasing left and right. I don’t know how to so 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?
Adam Dailey
Yeah. Of course. Yeah. It’s that’s why I was saying it’s it’s getting tougher. And it’s and the and the I think part of that that I didn’t say earlier was that with the uncertainty, there’s also less people going like, I wanna spend twenty thousand dollars in July on a vacation right now. Right? And they they might spend that twenty thousand dollar vacation in in July, but they’re probably not gonna decide till June or July. You know? And then because they’re they’re not certain.
So it’s like the booking cycle has changed as well as just yeah. I mean, people people don’t 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 fifteen hundred or two thousand dollars 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 fifty percent of what the height was a couple 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 it’s a huge problem. So I 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 for 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. Right?
Sebastien Leitner
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?
Adam Dailey
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 ten, whatever.
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 a hundred and eighty dollars for, our place in the winter and if people stay on a Tuesday and Wednesday night and they come in, they they have a certain expectation of, like, yeah, this is this is I I have an expectation. That same room could go for seven hundred, eight hundred 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 wanna call or look out or or whatever. I wanna towel. I don’t wanna 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 gonna have great service. And if you’re the cheapest, you’re probably gonna be alright 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 twelve to one staff to guest ratio, and they’re they’re crushing because they’re charging three thousand dollars a night at some spa in the middle of nowhere.
Sebastien Leitner
Wait. Twelve to one. Twelve employees, one guest?
Adam Dailey
Yeah. Okay. And it’s three thousand dollars 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 if, like especially if things go wrong. If everything goes right, 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 twenty bucks for the cleaning stuff. 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 get 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.
Sebastien Leitner
You mentioned that you traveled a lot. I I kinda feel that airlines have a leg up when it comes to moving certain tasks away from people. Right? There are still some countries when you travel in Japan, there’s fifteen 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 five hundred kiosks in front of me before I talk to somebody. Is that the future of hospitality in your opinion?
Adam Dailey
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 in five 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 wanna 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 I’m fine checking out of the hotel if 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 me a lower level room or whatever? And then there’s the other person who, like I said, is just like, dude, give me give me straight to my room. If I can cut through these eight people and I I’ve got everything.
And and a lot of these guys are doing this with the the automatic keys and some of the bigger change, which which I do too, and I I really like that experience of of being able to avoid the the front desk. But I think it I think it’s you know, with with all this technology and AI and and whatnot, I don’t think our we can really comprehend the changes because there’s they’re exponential changes, and the human mind can’t they can go linear in terms of improvement because that’s all we experience 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. I just and it could hap it’ll probably happen quicker than any of us think it will. Right?
Sebastien Leitner
Yeah. I 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.
Adam Dailey
Yeah.
Sebastien Leitner
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.
Adam Dailey
I would say over selling, under delivering. That was something we think about a lot. As well as, you know, as a as a guest, I definitely do, I I guess, the check-in procedure of, you know, because 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? That way, I can get my kid down for a nap.
And either the nonresponse or the no, we’re cleaning, but they’re not cleaning. I’m totally cool if you really are cleaning up until three, but a lot of times we’d stop in anyway at one thirty, and it’s like, it’s been cleaned 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, hey, I I I want to be addressed individually and not have some canned response. When it is past check-in time, I wanna check-in like like that. Right?
Sebastien Leitner
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?
Adam Dailey
Some of us are. Again, it’s it’s kinda I 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 ten 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 gonna he’ll he’ll eventually win. Because even though right now, you know, they’re the same, it’s like it’s one’s one’s really scalable and one’s not. You know, when those twelve guys in Philippines get better job opportunities or the Internet goes out for a couple days or whatever happens, you know, you’re you’re you’re kinda back to to square one.
And so, you know, we’re spending a lot of time looking to see it’s like a a lot of time. We’re spending thirty hours how to solve a twenty minute problem that 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.
Sebastien Leitner
Right? Okay. Yeah. I mean, the 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 I remember talking to a hotel owner recently who said his most successful and most productive hotel employees was sitting in the, in the Philippines. Right? And was doing check ins, check out 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 local hire local, the only reason that he didn’t hire local is where he couldn’t find people stuff. Right?
Adam Dailey
Wow. He’s like, it’s not a salary thing. It’s not it’s mindset. And it’s, I don’t have the labor available to me in the place that I’m operating, which is scary.
Sebastien Leitner
It’s crazy. It’s for sure, it’s scary. I think they just passed a thing here saying hospitality workers are get are gonna get twenty five dollars an hour right now in San Diego.
Adam Dailey
Minimum wage.
Sebastien Leitner
Or Minimum wage. Yeah. Wow. Yeah. It’s it’s scary as an operator because 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 are it’s a race to the bottom in terms of their pricing. Right? And so it’s like there’s, you know, I 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, a lot. You know? But they’re even on Google, they’re three point two 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.
Adam Dailey
I I didn’t know sweetheart two existed, but okay. Never mind. On Google. Like, when you Google it.
Sebastien Leitner
Yeah. Yeah. Yeah. It’s out of five. Yeah. That is scary. But it sounds to me like the the twenty five that you’d that was, just introduced, is that going to help, in your opinion, hoteliers, or is this just gonna motivate them to, I guess, outsource or, you know, outshore? What’s your opinion? What what does that go to do?
Adam Dailey
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. No. I mean, in terms of, like I 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? 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, yeah, I I don’t think that everything increasing I mean, power is going up. 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 some of these properties, like, I will lose money if I sell that room for a hundred bucks tonight. You know what I mean? So I I think it’s that’s the challenge. Right?
Sebastien Leitner
Or let’s fast forward, to the future. Right? Like, let’s start short. Your next trip with the family, where are you traveling to? Like, my real like, in real life?
Adam Dailey
In real life. Yeah. We’re we’re going to Austin at the end of the month for Spring Bright.
Sebastien Leitner
Oh, nice. Oh, nice. Yeah. That sounds fantastic. Travel in two, three years. What’s different?
Adam Dailey
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 twenty minutes, or I wanna get to this museum, pick the coolest route, and it and ChatGDP 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. I’m going to batman the next morning. I’m gonna take a day off. Whereas now people are booking, you know, days before. Right? Sometimes day out. Like, I’ve many times got on a plane somewhere and not had my book like, not had it set where I’m staying, but I’m like, I’ll book it on the plane, you know?
And that that is becoming more normal, I think. I I think it’s a combination of technology making things more seamless. You know? And if you see you get the automation of, like, oh, you want a car with your hotel? I hope you book it. But I think it’s just gonna 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 and Touro. Right? So it’s like, oh, it’s gonna book it for you eventually. Right? Where it just will and it it knows you don’t wanna spend more than forty bucks a day on this Tesla or whatever it is. Right? And so it’s like you take all this out of it or or it knows you want free cancellation.
Sebastien Leitner
Nice. So that’s that’s kinda where I’m thinking. More tech less friction ultimately.
Adam Dailey
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 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 start board 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? But I but I do think that’s a trend that that seems to want to continue.
Sebastien Leitner
Is there anything in your opinion that will disappear from the hotel room?
Adam Dailey
Phones. Phones? Okay. No more phones. Replaced by anything? Maybe like a maybe an iPad or something like that where you can, you know, get what you want out of the room, maybe. If it’s, like, on the wall or something, your iPad that has everything, right, in terms 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, from on to on.
Sebastien Leitner
So I have to, before we end up, I’d have to talk a little bit about, 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 fifteen years now and, still trying things out, but I’d love to hear yours.
Adam Dailey
I mean, I love Oscar’s. Okay. Tacos Gordos is is obviously really good. If you if you go down further south towards the border, in Chula Vista or whatever, you most of those places are 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 in San you would never so 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 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, yeah. You can’t you can’t survive. So it’s just I mean, we have really good craft beer here. Same thing. If you opened up a 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.
Sebastien Leitner
That’s amazing. That’s amazing. You live, of course, in a very, very amazing destination. If it is not San Diego, where would you travel to for vacation?
Adam Dailey
I mean, my go to is probably is probably Barcelona. It’s got that special place in my heart. So yeah. I mean, I love Europe. I spent almost ten years living in Europe. So Barcelona is a home base, and any pretty much anyone in Europe’s fun. Italy, Greece.
Sebastien Leitner
Fantastic. Adam, thank you so much for joining the program today, sharing your thoughts, your insights, your story. It’s a pleasure having you on the program.
Adam Dailey
Yeah. For sure. It was a fun conversation.
Sebastien Leitner
Alright. Take care.
That brings us to the end of yet another episode of The Turndown. Huge thanks for all of you for 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, Talak Kahheirao, Linda Pejai, Lana Cook, Ricky Sherman, and Eilifakuhasen for the incredible research and preproduction work always keeping us on track. To Paulo 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.
