Michael and Alan Fuerstman

Stacy Shoemaker Rauen: Hi, I’m here with Alan Fuerstman and Michael Fuerstman of Montage Hotels and Pendry, respectively. Alan, thanks so much for being here.

Alan Fuerstman: Thanks, it’s great to be here.

SSR: Mike, so glad to have you here as well.

Michael Fuerstman: Thank you for having us.

SSR: So, let’s start with your childhood, Alan. Where did you grow up?

AF: I grew up in New Milford, New Jersey, not too far from where we are here in New York.

SSR: What was it like growing up there? I mean, did you have any kind of start or inkling that hotels or hospitality would be what you wanted to do later in life?

AF: No, I was the son of a dentist in suburbia and had a great upbringing and very fortunate. Just carefree. I played more sports than anything else, and just a good, fun childhood.

SSR: Did you travel at all?

AF: I traveled a little bit, but nothing luxurious. Howard Johnson’s or Holiday Inn was a treat and that was the extent of our hotel travel when I was younger.

SSR: Got it. And how did your upbringing influence your career? How did it lead you on the path of where you are today?

AF: I actually started working at hotels when I was young. My senior year in high school, I got a part time job as a doorman at a Marriott Hotel, so that really got me excited and involved in the hotel business. And that’s virtually all I’ve done. I went off to college, worked summer jobs as a bellman at a Marriott Hotel as well, and then was going to take a year off before going to graduate school and got a job working at a hotel in California, more as an adventure than a career but really fell in love with the business at that point.

SSR: And did you study anything related to hospitality management in college?

AF: No, I was a political science major. I went to Gettysburg College, thought I’d go to law school, but got sidetracked along the way.

SSR: What was it that you fell in love with? You know, as a doorman and then working in these hotels, what was it about the hotel world that, you know, [made you want to pursue it]?

AF: Well initially, it was just the energy of a hotel. As a high school senior, the excitement of the action and just interaction with the guests was great fun. My buddies were working construction, and I was just relying on a personality to make some cash and it was an incredible early view into what was happening in the hospitality world. I liked it a lot, and decided it was something I could really enjoy doing long term.

SSR: . So, I mean, you worked at some hotels but what were some of your beginning jobs in the [industry?]

AF: So, the first job out of college, I was the opening bell captain at a resort in Rancho Mirage, California. Then I went through Marriott’s management training program, worked my way through virtually every department in a hotel, and I was a front office manager. One of the more interesting jobs I had, I ran a housekeeping department early on in my career and then food and beverage, virtually every department. So, great exposure to what happens in a hotel, and it was a really good foundation.

SSR: Was there any one experience or one time that kind of sticks with you as something that you’ve used later on in your career or anything you’ve learned along the way that you still instill into your team or into what you do?

AF: A good amount of my time was in front of the house positions but I had this great opportunity to operate the housekeeping department, which people say, that’s interesting, but for the first time, my success was based on what other people were doing and being able to lead and manage and motivate and excite. And I learned so much in that part of the hotel, and I became part of what our company’s all about; the respect and the contributions at all levels of the organization make to the overall success is critical and I have such a deep appreciation for what all positions at a hotel do to contribute and I think I learned that from having the opportunity to see firsthand just how important it was. So that’s always stayed with me.

SSR: And so, why would you, or how did you, decide to launch your own company, Montage, and what was the void that you were trying to fill?

AF: I had run some pretty great hotels. After I had left Marriott, I was hired by ITT Sheraton. I was running a resort in Tucson for them and doing their resort development work. We acquired the Phoenician Resort in Scottsdale, and it was there that I got exposed to the development side of the business and also, somewhat of the design and construction. We built the Canyon Building there, from start to finish, from selecting the architects to the interior designers and had an opportunity to do something in an incredible location and it was a very rewarding experience. And it stayed with me; the ability to create something so special that really took advantage of the place. And then, as I left the Phoenician, I was managing the Bellagio in Las Vegas, but really I had an entrepreneurial spirit and thought that there was a great need in the hotel world for a new style of luxury. And I looked at old world traditional luxury, I generally felt a little too pretentious, too scripted, and what the next generation of luxury traveler was looking for was a much more gracious and humble approach to luxury and to service.

And why not strip the pretentiousness out, where you can be as comfortable in jeans at a fine dining experience as you are in a suit, where don’t have to dress up to go to the lobby. Yet, you still had incredible attention to detail; whether it was the craftsmanship or the artistry that was on display, all critically important. And it worked, that more gracious and humble approach to service and not having a cookie cutter approach to the kind of projects that were being done. If you think back to 20 some years ago, it was not uncommon for a hotel in Maui to look like a hotel in Boston. And these were luxury hotel companies doing that. I think capturing a sense and spirit of place is what our guests are looking for, and that you incorporate a local aesthetic and design and vibe and marry that with the style and sense of service that is exceptionally gracious, not scripted, and highly personalized, then we’d have a formula to meet what the luxury traveler was looking for.

SSR: Going back real quick, it must have been interesting to work at the Bellagio. What years were you there? Was it when the Strip was kind of becoming what it is?

AF: Yeah, I opened Bellagio, so about the year before it opened, then through the first couple of years, then essentially was recruited, because managing the Phoenician, that was 650 rooms. That was large-scale luxury. At the time, that hotel was ranked probably the number one resort in North America. So the task was to bring luxury to 3,000 rooms. And we were able to do that and Steve Wynn did a terrific job designing, building, creating a terrific vision and then executing on that vision and delivering the kind of service commensurate with what was being built was our challenge.

SSR: And how did the Bellagio change the Strip? What did it bring that wasn’t there already?

AF: Well, prior to Bellagio, Las Vegas properties weren’t as focused externally. It was more competing with each other. In our view at Bellagio was, let’s compete with the great hotels of the world. So, things that didn’t exist in Las Vegas before, like turn-down service or mini bars in rooms and the amenities and things you would find in a luxury hotel experience, we introduced. And it was a point to be made that the non-gaming customer could be as profitable and as valuable as the casino customer. So for the first time, we really showed a model where you could be more than 50 percent of your revenue could be coming from non-casino. And that wasn’t the case prior to Bellagio opening.

SSR: Yeah, it changed the game in terms of F&B and overall experience.

AF: Exactly.

SSR: Yeah. So, okay, back to Montage. So you have this idea of relooking at luxury and what that means. So, where do you go from there? What’s your first property? How do you approach it?

AF: So, I raised some money, it’s post-9/11 and I think that there will be an opportunity to buy luxury assets at a discount. That’s what had happened 10 years earlier when the RTC debacle happened; banks were taking back properties. My plan was, raise the capital, then buy an existing hotel and then create a brand around an existing brand. Well, what had happened after 9/11, though the hotel markets dipped dramatically, the banks had gotten much smarter. We’re not taking back properties and it wasn’t a deep discount on existing luxury assets. They were smart enough to figure, oh let’s wait a little longer, work with the owners and things will be okay. But what had dried up was capital for new build opportunities and I was pitched an opportunity in Beverly Hills by the developer and the developer wanted to show me the work that they were doing in Laguna as an example of the kind of work they did.

I walked the property in Laguna with them, fell in love with that opportunity, thinking that would be an amazing platform to create a brand around and we created a brand around that, because we were able to negotiate. Marriott owned the property, and we were going to develop it as an independent risk hotel and we convinced them to sell it and then set about creating a brand around that. In fact, prior to finding that location, I called my company Platinum Hotel Group. It was a placeholder name to acquire what I thought would be an existing brand. And now we have the challenge of coming up with a brand as well as creating everything that would be our first hotel.

SSR: And how did the word Montage come up?

AF: So, I went to my advertising company and they gave me hundreds of names of which I rejected all of them. I went to my PR company and said, $10,000 to whoever in the group comes up with a name and I got a lot of interest, but no name that I got comfortable with. So one day, and it was getting close to having to announce the transaction, so I needed a name, and because Laguna Beach had started as an artist colony, I was leaning toward an artistic word. I couldn’t find one, I couldn’t think of one, so I went to an art reference guide. I’ll date myself because I would say it was a Google search, but in reality it was a Yahoo search. But I looked at it, I went through an art reference guide, from A to Z, the A’s, the B’s, the C’s, got to the letter M, saw the word montage, it said, artful compilation, collection. I said, that’s what this is going to be; a collection of hotels, a collection of people coming together to do extraordinary things, and I said to myself, I’m staying at the Ritz, I’m staying at the Montage. I’m staying at the Four Seasons, I’m staying at the Montage. It sounded great off the tongue. I did a quick search, it wasn’t being used. I had the lawyers lock up the name and that’s how the brand was born.

SSR: For those that have never been to the property in Laguna, and you should all go, can you just set the scene? I mean, it’s one of the most spectacular sites.

AF: Just an idyllic beach setting. It sits on a bluff, overlooking the Pacific Ocean, 260 rooms, all oceanfront. Just a tremendous beachfront experience. Three restaurants, pool area, incredible spa. It is the most amazing California beach experience.

SSR: You never want to leave that property when you get there. So, you have this amazing first property. How do you top that? How do yo continue on and evolve this brand going forward?

AF: Well, it was always about quality, not quantity. So the trick was not compromising and the bar was set so high with Laguna Beach. It was a hotel that with spectacular design, great location, and an opportunity to position the brand so high that it reinforced the need not to compromise and do good hotels. So, we set out to find the greatest locations in strong luxury markets that could support the kind of rates that we needed to be able to charge to provide the levels of service that we do. We stayed fixated on that, so Beverly Hills was a natural market, with all the quality properties in that market. And then each property, subsequently, we assessed the market. Can it support the kind of properties that we want to build? Then, are they the right kind of locations within the markets?

So when we looked at Deer Valley, it was a market that we liked, because there were couple properties that were doing relatively well, yet we had an opportunity to come in with a product that we knew could lead the market, you marry that with a style, a service that we’d become known for and it’s a terrific recipe to do well financially, do well with our customers and really provide consistency in a brand promise.

One of the things that I’m so proud of is, I see many guests. I live at one of our hotels and guests come up to me on a regular basis at all of our hotels, in large part because of the videos playing in the room with me talking, but I meet many guests. Many conversations start with, I just stayed at your Montage. I have no idea which one they’re about to say. I try to guess in my mind. They say, I had the greatest experience, and it could be any of the six Montages or two Pendry [hotels]. Any of the eight hotels that we have today. That kind of consistency is what we’re striving to provide at all times.

SSR: Do you have a favorite?

AF: It’s like, asking if you have a favorite child.

SSR: It depends on the day?

AF: No, it’s generally whichever one I’m at, at that given moment. They’re all so unique and all so special. It’s not a matter of a favorite, it’s just for different moods and different times of the year. But they all measure up and as I was mentioning, they all get such incredible recognition and every time I get back to one I haven’t been to in a while, it’s like, oh my gosh, it’s so great to see. Generally it comes down to, it’s the people. It’s how our team is, and just this remarkable job of creating an environment of gracious hospitality, recognizing the needs of our guests and just the way you’re made to feel while you’re at the property. And it’s so special.

SSR: How do you hire for that? Do you hire from within the industry, do you hire from outside the industry? I mean, is there a formula or is it just the right person?

AF: We hire less for experience or technical skills and more for the heart and more for the attitude and the fit that we think the individual has—a desire to serve others, the desire to be a great team player. And so, we spend a lot of energy in recruiting and developing talent. And importantly, as a growth company, we need to focus, and have focused extensively, on the learning aspect of our culture. So it’s the training and the developing, the orientating; how we develop our people. The only way we’re able to grow it the way we’ve been growing is to be able to have both capital for both projects but also human capital. An ability to develop people. And as we move forward, it’s a combination of the mentoring training, developing of our internal staff and bringing in new talent to the organization. That also plays a key role in our ability to grow effectively.

SSR: Well, you have good people in your son. It’s a good time to bring Mike into the conversation. So, you grew up, obviously then, a little bit in the hotel world with your dad opening all of these different hotels and you know, playing a major part in the hospitality world. Did you grow up in one area? Or were you traveling around? Or, tell us a little bit about your childhood.

MF: I grew up all over the states. So, I was born in Newport Beach. We lived for a short time in Long Island in New York. Then it was back to Southern California, we lived in the LA area, then Palm Desert, Tucson, Phoenix. I went to high school in Las Vegas, then off to college after that. So, mostly the Southwest U.S. Yeah, just moved a lot as my dad’s career was progressing.

SSR: And what was that like? What was that like learning from him and watching him? I mean, did it instill this bug, or were you, like, I’m never going into hotels?

MF: Yeah, I loved the business. It was really interesting to see it growing up. It was just such a great energy in hotels. I always enjoyed going to work with my dad and seeing what was happening and getting a chance to travel and experience different hotels. I knew no other way. I just assumed that’s just what everybody sort of did. It was really lovely way to grow up?

SSR: Did you live in the hotels?

MF: At certain times, we did. Yeah, we lived, let’s see. At Tucson we did, for a while in Phoenix, we also had really normal suburban homes too. It was kind of a strange mix.

AF: Yeah, it was fun.

SSR: Is that why you still live in a hotel?

AF: I just love the hotel environment. Our family does.

MF: It’s some of my best memories. Honestly.

SSR: Was there anything as a kid that was super special?

MF: Yeah, roomservice. The pools. You know, you get a hotel lifestyle. It’s like being on vacation as a kid. But you’re home.

AF: Do you remember pre-opening in LA. when we were opening a hotel? You were 3 or 4?

MF: Are you going to say what I did when I was 3 or 4?

AF: Yeah.

MF: Yeah, pulling the fire alarm.

AF: It was typical, touring the hotel prior to opening, a few days before it opened. Michael must have been 3 years old at the time, waiting by the service elevator. He sees this little red thing and pulls it, and there goes the fire alarm.

MF: You can’t put shiny toys in front of kids when they’re 3. They’re going to  grab them and play with them.

SSR: Exactly. So, did you work in the hotels as a young kid as well?

MF: I did eventually. I didn’t really grow up thinking I was necessarily going to be in the hospitality business, but I had an opportunity when the Bellagio opened, I was 15, and the most coveted job in Las Vegas was to be a pool boy at Bellagio. And I was lucky enough to have that job, and I did that for three years and it still may be the best job I ever had in my life. It was incredible. I went to college, and I worked at the Charles Hotel in Boston in a lot of different positions in that hotel. I was an overnight night auditor for a bit. I was a front desk associate. I worked concierge, sort of a utility guy. They just plugged me in anywhere front of house after a while. It was great and it was a job, and it was a really fun job, but I didn’t necessarily think about a career in hotel operations. It wasn’t in my mind, I had gone off to school in Boston. I had thought about going to Cornell, but I wasn’t ready to commit to hospitality being my career.

AF: Yeah, it was fun.So what did you actually study in Boston?

MF: I studied political science. I went to Tufts and had a great time there. I just took courses that I found interesting and somehow I looked at my course sheet and I was, like, ‘Wow, I’m halfway through a political science major. I guess I should stick it out with political science.’ I really enjoyed it and I did a couple entrepreneurial things in school as well and started an internet company with a couple guys that I lived with and we had some initial early success. I thought we were going to change the world, and I sort of pursued that coming out of school.

SSR: What was this internet company that’s going to change the world?

MF: It was a location-based social network. It was like Foursquare but before Foursquare existed. It was called Social Monkey, socialmonkey.com. Nobody really cares, it’s gone away at this point, but we had maybe 1,000 out of the 4,000 kids at Tufts signed up using it. We had a great piece on us from The Boston Globe. We went around trying to raise some capital and the idea just sort of fizzled out and we couldn’t keep it going. But anyway, so I move on from that, move out to LA, sort of licking my wounds and from there. I was trying to decide what I wanted to do with my life.

And I was lucky enough to be able to sit in on an owner’s development meeting for Montage, Beverly Hills. Early days. The hotel was still being designed. I got to sit around a conference table, not unlike this one, with people sitting around it with a set of plans, talking about guest experience and design, value engineering, all this amazing stuff that I actually had never seen before and didn’t really understand that this was part of the hotel business; this was part of the industry. I had only seen operations from when a hotel was open and operating and that was the world I knew. This was like, mind blowing. You know, the creativity, the teamwork, building something tangible, seeing it come together and I knew I wanted to be a part of it somehow.

And I went and knocked on the door of the gentleman who was the developer for the project who we were working with. And I begged him to hire me as an unpaid intern. I want to get coffee for them and take measurements in the field, do whatever it takes. But I just needed to be around this and to be a part of it. And I went and worked for them for a while as an unpaid intern and then eventually they finally hired me on and so I started my career from that.

SSR: So did you stay on the development side then, with them?

MF: I did through the completion of Montage, Beverly Hills, which was an amazing experience. Then I actually switched gears and came to work for Montage, but on the residential sales side of our business. I went and got my real estate license and spent so much time walking around, touring the building, storytelling, describing what it would be like when it was finally opened that I sort of parlay a little bit of that skillset and certainly some of the access that I had to my dad and to some others to be an ambassador, if you will, for our brand and help sell the residences that we had there, which was a really important thing for us to do, to unlock the value of having created this hotel, we needed to sell these residences at very premium pricing. And it was a huge part of our business model and it was an incredibly tough time to do it because we opened two months after Lehman Brothers collapsed and the world was falling apart. But you can’t really control those things. You just, you know, we had a great team, we had a great product in an unbelievable location and we rode it out and were ultimately  successful.

SSR: So what was it like, you working on the developers side and you on the Montage side, for Beverly Hills?

MF: Yeah, I think it was cool. I think we were both pretty respectful of the fact that I was, at the moment, working for a developer and not working for Montage. But at the same time, it was a Montage property. So, there was some sensitivity around that, but ultimately, everybody’s visions are, for the most part, aligned. I just wanted to create something special.

AF: It was a terrific time. He would tour the bankers that would come through as part of his role, was giving tours of the building while it was under construction and there’d be finance people and he could speak so articulately about not just that hotel, but the Montage brand and then people would put the connection together and I’d get calls from people saying, ‘Oh my gosh, I met your son. He was so great.’ I was very proud of what he was doing there, but also got the sense his contributions were going to be really special and he had found something that he was really good at and that message was being reinforced regularly.

So it was a logical transition then, when we had to sell real estate. Who knew the property better than Michael? Who had access to my ear or knew how to elevate an issue, because people buying multi, multimillion dollar homes during the depths of the recession had serious questions about how, you know, the stability of any project. So, he knew how to get the right people in front of us when we needed to speak to them, to reinforce the message and he did a terrific job on the sales effort there and putting together a team and doing the things that needed to happen to sell real estate there and we sold real estate at record prices.

SSR: So after you sold most of the building, when did you decide to switch from sales, presidential sales, into more of a development, corporate brand role?

MF: Yeah, so I guess, a couple years—18 months to two years to really sell through. And I was getting itchy to get back into the development side of the business. And timing wise, it was right when we were coming out of the recession, we’re gearing up for our next phase of growth. We were out looking for someone to lead us and bring in a great acquisitions development person. As soon as we identified that person, Jason Herthel, who is now the president and COO of the company, I went to go work for him and got back to the development side of the business, but now it was an education process. I was learning real estate finance on the fly, underwriting deals, we were looking at a lot of different opportunities, and it was interesting. It was a wonderful seat at the table to hear what’s financeable, what do capital partners and development partners care about, where do they want to build a hotel, where can you actually build hotels. And to be hearing directly from our guests, what they love, you know, what they’re looking for in the future. So it was an amazing point of view.

SSR: A good learning [experience].

MF: A great learning experience. Amazing.

SSR: What was it like working together now, under the same roof and how do you guys foster that. How do you now play off of each other and work together?

MF: For us, it’s worked. You know, the way I came into the company was fortunate. You know, I worked for someone else for quite a bit, I never worked directly for my dad. We’ve always had a nice buffer and even when I was sort of transitioned into the development and acquisition side of the business, I was working for Jason Herthel. He was my direct report. And you know, it’s been really good for us. Now that we have Pendry and Montage, roles have changed a little bit and we’re doing a lot more selling and designing together and it’s really fun. It’s been this sort of natural, organic progression, and it’s just worked.

AF: I have tremendous respect for his capabilities and what he brings to the table and helps complement some of the things that I do. So I view him as someone that’s been, obviously instrumental in the Pendry brand. But beyond that, just as we look at the world, as we look at business, as we evaluate things, he’s been a big part of that. So it’s been a really interesting and fun experience. We’ve spent a tremendous amount of time together …

MF: So much time now.

SSR: Didn’t you live together at one point too?

MF: We did, yeah. Yeah that’s right, we did.

AF: For those of you that renovated homes, this is your typical renovate story. Mike and his wife, Michelle …

MF: Twice as long, twice as much.

AF: They were moving down to Orange County from LA and thought they would have to spend a couple months. It ended up being, seven, eight months, Mike? And it was the greatest. He and his wife and their daughter, our granddaughter. We had the greatest time. It was like a slumber party, always.

MF: We talk about this a lot, but the hardest part about working together is just turning it off. We try to have our own regular lives and be with our families and it’s hard to just, you know, we get so excited about what we’re doing, developing and building.

AF: No, the whole family, they all have opinions too, though. And actually, it’s very valuable feedback whether it’s my wife or his siblings, they all contribute and they all see things in a little different way. That’s a big part of it, but as Mike says, there are times where we could spend the whole evening talking about it, even though we’re just getting together on a more social basis. So, we try and moderate that a little bit. But it’s worked out really, really well, and I think it’s also worked out well. It’s amazing how many opportunities we look at that the father-son dynamic is something that works well with other father-son dynamics. There are businesses and potential partners we have dealt with that it just works really, really well. And of course with Pendry. Michael has driven the design, the artistry, the vibe that we create, and he just happens to have that skill. It’s not something that he does because he’s my son, he does it because he has a skillset to excel at doing that.

SSR: And you mentioned Pendry, but we haven’t touched on that yet. So tell us a bit about Pendry; what the brand represents, how that came to be and why.

MF: So, I think from that interesting perspective of hearing what is financeable and sort of feeling that the world was changing coming out of the recession and how we consume everything was sort of shifting. We really fundamentally believe that luxury was changing a little bit. That there was ultimately a new wave of luxury customer that was coming into being. And you know, we really wanted to create a complementary product to Montage, that really spoke to that next wave of luxury customer, that appreciated the architecture and art and interiors in a different way; wanted a different style of luxury, wanted different types of culinary programming, and in some cases, wanted to try more pioneering cities or locations or destinations.

But really, importantly, wanted the service culture and wanted the infrastructure and the foundation of what we do at Montage, which is, we execute really well, we hire amazing people and we ultimately deliver these great experiences. So, we sort of looked at the world and said, I think there’s a space somewhere between, you know, lifestyle-oriented, design-oriented hotels and luxury hotels, where we can take the best of our service culture and everything that we’re known for with Montage and focus it on a more sort of design forward style that’s befitting this next wave of luxury customer.

And it was kind of an exciting niche to stumble on to. It happened organically. Again, it was not something that we set out from day one saying, we’re going to have multiple brands and boom, boom, boom. We just sort of at the right time, the right moment, we just felt the world changing. It was time for us to do that. It made sense. And on the business side, we were fortunate that our Montage properties have been very successful, but we’re so particular about where we’ll put the flag. We’ve had a lot of capital partners and development partners who want to do more with us and we just haven’t been able to do that because we are so specific about where we’ll put a Montage. We have to get a certain rate, just as important, the service experience and guest experience that we really want to be able to provide. We will not compromise. So I think it’s been percolating, had been percolating for a while, this idea of maybe doing another brand; didn’t know what it was and didn’t want to do Montage light, it just sort of happened and I’m thrilled that it did.

SSR: So, tell us a little bit about the name. What does Pendry represent?

MF: Yeah, so Pendry means know thyself. It’s a British family name dating back to the 1300s. The family motto for the house of Pendry is ‘Know thyself.’ And we started with this idea of know thyself, thinking about who is this next wave of luxury customer that we really want to appeal to and how do they live their lives and what is it about them that makes them special? And we kept coming back to this idea of, they know who they are, they’re confident in their own skin, they’ve got all these different varied experiences that they’ve been able to accumulate over the years. They have taste. They know who they are, they know what they want, they know themself.

And we just kept coming back to this idea of know thyself. And at this point, Google was around, not Yahoo search. And we did a very deep Google search and just somewhere on the corner of the internet, we found this lovely House of Pendry name that had this motto of ‘Know thyself,’ and I liked how Pendry sounded. It sounded aspirational, it sounded like it was a heritage brand that had this great lineage to it and for us that fit very well. It was a second generation brand with Montage International. This is the second generation coming into a really beautiful family business now. So, it just worked.

SSR: So you have one in San Diego and one in a historic site in Baltimore on the water.

MF: Yes.

SSR: Very different.

MF: Very different.

SSR: And tell us a little about them and what sets them apart from each other and also how you set Pendry apart form Montage.

MF: Sure. So, San Diego, it could not be more different hotels, which was an awesome way to start the brand. So, San Diego is about as big a hotel as I think we’ll go with Pendry. It’s 317 rooms, new build, it’s in the middle of Gaslamp district in San Diego. It’s big because it’s a volume-driven destination. There’s a lot of conventions and we’re right by the baseball stadium. So these big volume swings. And we looked at San Diego. It’s a great market. I think it’s the eighth biggest city in the U.S. There’s some great wealth, there’s a bit of a scene and a bit of a food scene that was percolating and we said, we can do something interesting here and raise the bar for luxury and do it in a way that felt relevant, that was a real honest interpretation of San Diego and not a manufactured brand specific thing. So we took a great site and we created a very pedestrian friendly … I’m going to paint a picture here.

We essentially took what was a larger hotel. The design challenge was, how do you create a cool, intimate feeling, you know, a really special experience at volume? So we tried to create smaller, more intimate spaces, all along the perimeter of the hotel and every square inch of the exterior of the hotel is all food and beverage or some sort of a cool experience that’s interactive with the street scape. And then there’s a tower behind. So it doesn’t feel like a Las Vegas style large casino, where you can get lost in the belly of this hotel. It’s all these great little places and in some cases, you don’t necessarily know that this restaurant front is part of the hotel. But we think that’s totally fine and appropriate.

The vibe is kind of like an urban coastal aesthetic. Kind of a mish-mosh of popular California styles. There’s some midcentury, there’s some deco. It’s really light and airy feeling. It’s a brick building that has a tower behind it that feels right for Gaslamp. We’re really proud of it. It’s the rate leader in the market by a wide margin. We’ve got, you know, the best nightclub in town. We have, I didn’t even tell you about that, sorry.

Going over the place here. From a food and beverage standpoint, we have the most happening under one roof. We have a nightclub in the basement of the hotel, we have a beer hall in one corner of the hotel, we have an unbelievable cocktail parlor, multiple restaurants, one restaurant that’s got a glass greenhouse with retail and coffee bar and gelato bar in it. It’s a kind of great all day hang. We just really wanted to create a destination with something interesting in San Diego and we feel really good about it. Baltimore …

SSR: Very different.

MF: Which is very different. So, San Diego was new. Baltimore, 128 rooms, a small, adaptive reuse of this incredible brick building with a pier that floats over the water. It was the Ellis Island of Baltimore. It was originally an immigrant processing station. At one point, it was the second busiest port of arrival into the U.S. behind Ellis Island. It had this great second life as this, like, YMCA-style community rec center. So it was called the Rec Pier. And then it fell into disrepair in the ’70s and ’80s, and it just sort of sat that way. It was used as movie sets and random stuff, but we partnered a really amazing man, Kevin Plank, the founder and CEO of Under Armour, who had this vision to do something iconic and special in his hometown. And we’ve gotten to know Kevin over the years through our Montage properties, but when we were developing Pendry, he approached us and said, ‘hey, I love what you guys are doing. You guys are an American entrepreneurial family, and I’m an American entrepreneur and I want to create something special and I want to do it with people that we really like.’

So, Kevin empowered us to create something as special as that building, to be that special for many, many years going forward and to be the hospitality icon in that city. So we put together a collection, found a great interior designer, Patrick Sutton, who lives a few blocks from the site, has done a ton of great residential work. He did an amazing job. We brought in NoHo Hospitality, unbelievable culinary operator in New York. We brought them in, created an Italian steakhouse, that’s the Rec Pier Chop House, which is, you know, it’s a centerpiece in the community now. There’s an amazing pool that sits floating at the end of the pier. I could go on and on. It’s a great hotel. We’re really proud of it. Yeah, it’s very, very special. Very fortunate.

SSR: And design, you’re talking a lot about Patrick Sutton, and I know you collaborate with various designers in San Diego as well. I mean design has always been a hallmark of Montage and now definitely for Pendry. Can you talk a bit about how that works or what you look for, how you pick collaborators, what that means, you know, in terms of the experience of the hotel?

MF: I’d say, there’s no one aesthetic that defines Pendry. The general ethos of Pendry is new luxury. And every hotel is one of one, and we try to do what’s right by that property and by that city and that destination. And we really think about it, because in some cases it makes sense. Baltimore feels glamorous and handsome, but there are still these great industrial elements there and you can feel that, and it would feel disingenuous for us to whitewash it and bring in a lot of plants and make it feel like a different style hotel. San Diego felt appropriate to just be this massive, a collision of all these different design aesthetics because it’s such a big building, there’s so many different experiences to play.

West Hollywood, which is upcoming, is entirely different. That is a very contemporary Art Deco-style hotel, which we are so excited for. We really just start with, what’s the point of view, what is the story that we want to tell for our guests, how do we want them to experience this city? Part of it is a balance of we’re trying to reflect what’s happening in that neighborhood in that city at that moment in our culture, but at the same time, we’re trying to push forward and bring in concepts that are outside of that particular area because it’s sort of our responsibility as hoteliers to do that, otherwise we’re just copying what other people have done. So, finding that balance is really important but it starts with a point of view and take on a given destination and then that helps to narrow down, okay, which designers do we want to speak with and who do we want to collaborate with?

AF: And really important that we find the balance between style and function also and that’s where we work so closely with designers, so that it’s not just yes, they hit the design aesthetic that we were asking for, but we spend a tremendous amount of time on the comfort of a guestroom for example. How does it actually feel and we look at it from every which way.

MF: How will it wear.

AF: How will it wear, how will our guests be using it and what can we do to make it more comfortable and it’s amazing what you can do with thoughtful design. So there’s a lot of thoughtfulness that we integrate into the creativity that great designers bring to the table. We also have avoided this cookie-cutter approach, where we have a designer that we like, so let’s just keep doing it over and over and over again. Eventually, it starts looking the same, so we do repeat with designers, because there’s some extraordinarily talented ones that we’ve worked with, but we also get out of our comfort zone a little bit just to make sure that we’re progressive and we’re not just resting on the laurels of ‘we were good designers in a certain era, or a certain day.’ So, we are constantly moving forward and I think Pendry has really helped us move that bar a little more. We’ve been able to take more chances and do things that were out of the traditional comfort zone but have worked really, really well, that we now have adapted as we look at Montage experience as well. So in some cases, it’s an incubator of ideas and concepts that we do with both brands.

SSR: Is there one thing that a designer does that drives you nuts? Is there any advice that you have for anyone who wants to partner with you?

MF: Oh man. I think it’s, yeah. There is one thing that drives me nuts, and it’s when a designer won’t engage and comes with a preconceived notion or point of view already. I think any good partnership is a real collaboration, and we’ve worked with all different designers and we’ve had experiences that range from pretty good to spectacular. And I think that the most successful relationships we’ve had have been where we come with an idea, they come with an idea, these two ideas sort of merge and become an even better idea and we push forward. And I’d like to think that we’re humble enough to sort of check egos at the door and just sort of say, this is what we think, what do you think? Let’s push each other. I think it’s got to be a collaboration.

AF: The narrative is very important, that we do a good job articulating the vision of the overall property and then collaborating on, how does that get translated into touch and feel and things that happen. And what’s great is when we can articulate that vision, and we think we know what we want, but just by communicating, something even better comes out. When a true artist gets their hands on and say, we love what you’re talking about. That’s a good idea, but why don’t we go in this direction. And they pleasantly surprise us and it’s like, wow. And that’s what we look for; not things that we could design or we can come up with internally, because you know, we have some good ideas but sometimes when they can take what we’ve suggested or thought about and say, ‘That’s okay, but how about this?’ And we love being surprised that way, in a way that hits a cord.

MF: It’s sensitive though, because I mean, we want to work with the best talent and with the talent comes expectations that, you know, it’s, you hired me for this. But we approach in every endeavor, it’s a collaboration; it’s a partnership.

AF: Mike’s taking the lead on the Pendry design, but it’s not without banging heads a few times, with designers and others, as we have strong opinions as well on where we want the brand to head and what that vision is. But out of that sometimes comes the most amazing outcomes. And we’re pleasantly surprised where we’re wrong sometimes and other times we push back pretty hard because it’s not quite what we envisioned the broader concept to be.

SSR: I think it’s hard too when you’re starting a brand right? Like you have an idea and you know …

AF: It evolves.

MF: Absolutely.

SSR: And so, you saw the change in luxury, you saw that happening. There’s Pendry. What else are you seeing? What else are you paying attention to in the industry? What keeps you up at night or gets you excited?

AF: No, I think the industry continues to evolve. This notion of creating experiences beyond just the four walls of a hotel is important as we look at resorts and destinations and being able to create, again, experiences of the place. We talk of Hawaii, where we have this incredible resort, but one of the coolest attributes is our cultural ambassador and she does ukulele lessons and lei making and talks about the history of the land and the people and our guests are enthralled by that. And yes, they’re enjoying the luxury components of their experience but they also want to experience the people and the culture and the heritage. So, focusing on how we can integrate that into some of our destinations and hotels is really important.

As a relatively new grandparent, this multi-generational travel is really important to all of our hotels. And it’s not just passive, it’s three generations of activities and engaging and doing and wanting to do more. So we look as we design and create places, great resorts and great hotels are places where memories are made and traditions can be made and we want to be the locations where that happens and play key roles in our guests’ lives.

SSR: As a mom of three, I thank you for that, because it’s getting harder and harder to travel with more active children, so. Are you worried at all about Airbnb and how this could effect you, with this multi generational travel right now?

AF: We worry about illegal hotels or some of that, but it really can’t replicate the kinds of experiences we create, the kind of environment we create, the community aspect of a great hotel. But as an industry, we’re concerned about that. The unregulated aspects of it. The negativity associated with that part of lodging. But from a luxury brand perspective, less so. But you know, we always keep our eyes open towards that type of thing.

SSR: And so, since this podcast is titled, “What I Have Learned,” what have been some of your successes and failures that you’ve learned from over the years?

AF: I’ve learned to make sure I have enough parking at hotels from time to time. We’re always learning. Each hotel, we build upon what we did last time and try to make it a better experience. But you have to try different things, and not everything’s going to work, and being able to adapt and change is critically important. But what I learned most is that it’s the people that bring our properties to life and it’s the energy that they create. It’s our staff and how they engage with each other, how they engage with the community. At the end of the day, the essence of Montage is enriching lives and our focus is on enriching all those that come in contact with us whether its guests, associates, the communities in which we operate, those who choose to invest with us and it’s a great industry to be able to have that kind of clarity of focus, to do those types of things.

MF: Yeah, it’s a really beautiful industry. There’s so much opportunity and upward mobility in hospitality. If you have a positive attitude and a sense of urgency, you can do almost anything. It really does feel like anything’s possible. We created multiple brands. We’ve been able to introduce Montage and now Pendry and it’s yeah, we’re really fortunate. I think being open to change is also really important. Sort of learned that through the process of introducing Pendry as well. I mean, it’s one thing to start with an idea for what the positioning is. But ultimately, your customers tell you who and what your brand is.

SSR: Right. Has there been anything that you thought would work with Pendry that you’re now kind of changing? Are you looking, you know, change a bit, evolving?

MF: In our branding, I think we tried to do too much too fast. I think we were really excited to share this sort of continuing vision of hospitality and where it’s going and the further we came back and embraced Montage and who we are and sort of this next version of what we are and just saying, you know what, new luxury is the positioning for this brand and that is so consistent with who we are and what we are and what our guests want. It really kind of clarified our vision. I think when we first launched, we tried to do too much too fast, tried to do a lot of things all at once, say a lot of things all at once. And through the opening of the hotels, and I’m talking about even before the hotels opened, we evolved and came back to, this is who we are, this makes sense, this is what our guests will understand. So I feel good about it.

AF: As we were developing Pendry, it was like, let’s come up with a list of all these different things that we would do differently, but at the end of the day, some of that was gimmicky.

And as we got closer to opening, we started stripping away these ideas that were somewhat gimmicky, but we needed them as we were pitching the brand. When someone said, how are you going to be different? We wanted to have 10 things that we could say on how we were going to be different. At the end of the day, through opening these hotels, we’ve created new luxury and a brand without having to accentuate gimmicks as part of what made us different. And a few of those ideas stuck and are part of just how we operate and some are long gone in some presentation we once did.

I can give you an example. One that stuck was, it started with an idea of, well, this is kind of a cool hotel, so why don’t we have the front desk clerks pour a welcome drink when you arrive? Well, it was so impractical, but Mike and the team came up with this idea, why don’t we have a welcome drink and give the bartender a secret password that you can take your drink over to the bartender and he’ll spike the drink for you if you just checked in? So we accomplished that through the bar as opposed to the front desk, which wouldn’t have worked for a number of reasons and found something that worked. It all came out of, how do we come up with ideas that would have made it different and special. And we had ideas of rejuvenation stations that were going to be in every hallway that were going to do all sorts of things. But it wasn’t as practical but it was all part of the process and part of the journey as we were creating Pendry and some other things. So, less gimmicks, more authenticity, real substance, and that’s how you have the positioning that Pendry has garnered. It’s through substance.

SSR: And what are the plans for Pendry and Montage? What’s on the horizon for both brands?

AF: We have a robust pipeline of growth. We have nine hotels due to open in the next three years: six Pendrys, three Montages. And then we also have quite a few other  projects that we’re in discussions with that will also continue to grow our portfolio, both nationally and internationally. So we are really at a very special time in the company’s growth period. And again, we’ll be doubling our company in less than three years. So it’s an important point in time.

SSR: Do you think it’s just the right time?

AF: Well it’s a culmination of the things we’ve been doing through the years and the relationships we’ve had and the success of both brands and we’ve stayed diligent. Again, it’s not the quantity, it’s the quality of what we do and these each measure up in their own right to the kind of properties and projects that we’ve done to date. So it’s an exciting time to be part of our company; the growth has an incredible energy to it and our focus on finding the right talent, nurturing and adding to our talent pool is a big part of what we’re doing. And then Michael and I are spending a good chunk of our time on the growth of the company, finding the right opportunities that work really well. Then of course, visiting our existing properties and being a presence in what’s happening there. We’ve got a great team. Jason Herthel, who’s our president and chief operating officer does an amazing job leading the day to day of much of what’s happening, freeing Michael and I up to do a good bit of what we’re doing in finding the right markets for our hotels and positioning us for a very bright future.

SSR: Is there one property you’re really excited about?

MF: The next one. No I mean, again, it’s hard to play favorites but I’ll say this, the next wave of growth for Pendry, we have three really big cities coming into play, which we’re really excited about: LA, New York, and D.C. And then some resort product as well. So, Park City, we’re doing a ski resort in the mountains. La Quinta, we’re doing a desert resort, just outside of where Coachella takes place. And Natirar, which is the former home of the king of Morocco an hour outside of the city, it’s a big country estate. San Diego and Baltimore are like adopted second cities. I’ve loved both of those cities. I spent so much time there. But coming to LA and New York and DC in a big way and then resorts. So it will be really interesting to see the evolution of the brand as we launch and arrive in this next wave.

AF: And we’ve got Hillsburg opening next year in Sonoma County in the wine country, an amazing location that will be the next Montage scheduled to open. We’ve got Big Sky Montana coming up in 2021, next to the Yellowstone Club. Again, ski in, ski out, great mountain resort, less than an hour from the gates of West Yellowstone. So, it will be a great summer destination. And La Quinta, we’re doing a Montage and a Pendry in the same market. That’s a market that’s underserved for both brands, so we’ve got that. We’re very close to announcing some spectacular projects in the Caribbean that aren’t too far down the road either. So, a lot happening and I can tell you that each project that we’re looking at, each hotel we’re looking at, is every bit as exciting as our existing portfolio. So we’re just really energized by the kind of things we’re working on.

MF: That’s the great part, is no compromises. They’re amazing destinations, they’re at the right locations within those destinations. We’ve been really fortunate, it’s awesome. Yeah. Really excited.

SSR: Well then, more father-son time.

MF: Yeah.

AF: Yup.

SSR: Well, thank you both for being here; it was such a pleasure to catch up with you.

MF: Thank you, Stacy.

AF: Thanks, it was our pleasure.