Several months ago, Chip Conley and his investors faced a fork in their growth plan.
Conley, the CEO of Joie de Vivre Hotels in San Francisco, California and three-time business author, witnessed competing hotels facing potential foreclosure. According to Trepp LLC’s Foresight Analytics, about $5.6 billion in securitized mortgages tied to hotels is coming due this year and next, and 27.8% cover properties that are now estimated to be worth less than their mortgage balances. Analysts are forecasting that the hotel industry will not regain its full strength until 2013.
Conley had some tough choices ahead. He could either choose to stay small, ignore the pressure to bring in more partners to cover the difference (a form of benign neglect), default on a few properties, or attract more capital from new investors to fuel growth and acquire distressed properties. Ultimately, he and his team agreed to sell a majority stake in JDV to Geolo Capital and pursue the latter option.
I had the pleasure of meeting Conley this month, and how he intends to thrive amidst a dismal industry shakeup.
If you lead a company that is facing debt problems, limited access to capital, a critical growth crossroads, or a combination of all three, invest 17 minutes to hear Chip’s sage growth advice.
Conley, an Abraham Maslow devotee for business leaders, sees this seismic industry shift as a great opportunity to acquire other hotel properties and expand their brand in other states. During my interview with Chip last week, I learned these important lessons:
- There is a delicate balance between managing confidential information and transparency. It was evident when I visited JDV’s San Francisco headquarters that fun and forthrightness are encouraged. But when have you crossed the line? When Conley posted photos from his adventures at the Burning Man festival, it raised too many eyebrows.
- Exceeding customer expectations does not guarantee steady growth and retention. Joie de Vivre Hotels look beyond customer needs (survival) and success, and seek out transformational customer experiences. He and his dedicated teams will continue to look for ways to create transformational customer experiences. Says Conley, “We do this when we’re creating a hotel by using a pyramid with “meets expectations” at the base, ‘meets desires’ in the middle, and ‘meets unrecognized needs’ at the top…in the process of creating a hotel, we imagine our ideal customer (and, in some cases, interview people who we think fit that profile) and we…ask broader questions about their lifestyle needs.” He continues; “For example, we decided to add free daily yoga at the Hotel Vitale because we realized so many professionals were traveling and getting out of their yoga rhythm while they were on the road…that wasn’t something that anyone said that they expected a hotel to do.” (it is highly unusual to offer yoga classes in a hotel in a Financial District).
- Look for uncommon performance metrics to fuel strong profits and revenue growth.
Conley is visibly excited about expanding beyond California’s borders. And his customers will not be disappointed.
Whether you serve IT executives, CEOs, or tourists, Chip’s twenty three years as a hotelier and lifelong learner will show you how to create more peak customer experiences.
Click here to watch:
copyright 2010, Lisa Nirell. All rights reserved.