Transcript: Episode 210: Six Months at the Waldorf
LISTEN TO THE EPISODE:
APPLE PODCASTS | SPOTIFY | TOPFLOOR.COM
[00:00:00] Susan Barry: This is Top Floor episode 210. You can find the show notes at topfloorpodcast.com/episode/210.
[00:00:14] Narrator: Welcome to Top Floor with Susan Barry. This weekly podcast ride up to the top floor features tangible tips and excellent stories from the experts and characters who elevate hospitality. And now your host and elevator operator, Susan Barry.
[00:00:32] Susan Barry: Welcome to the show. Josh Kramer has lived many lives in hospitality, beginning as a classically trained chef, then pivoting into real estate, private equity at firms like Blackstone before launching his own ventures. Inspired by experiential travel models in Africa and Asia, he co-founded Paradero Hotels, a luxury hospitality brand in Baja Mexico that blends resorts with destination management, creating immersive experiences in semi-remote locations, maybe completely remote locations. Paradero’s first property in Toto Santos offers everything from surfing lessons to private sailboat excursions, and curated beach setups with expansion underway. Today we are going to talk about the rise of experiential luxury, how to operate in remote destinations and the future of small scale, high touch hospitality. But before we jump in, we need to answer the call button.
Call button rings.
The emergency call button is our hotline for hospitality professionals who have burning questions. If you'd like to submit a question, you can call or text me at (850) 404-9630. Today's question was submitted by John. This is the best question anyone has ever submitted, by the way, I love this question. Josh, what is your favorite food city?
[00:02:10] Josh Kremer: Mexico City. Or Tijuana.
[00:02:13] Susan Barry: Okay. Tell me why about each one.
[00:02:16] Josh Kremer: I mean, just the taco scene in both cities are unbelievable. And then I'm gonna add a third one, which is Oaxaca. That's our San Sebastian, like the Spanish San Sebastian of Mexico is Oaxaca. The best heirloom products, corn tortillas and it's just an incredible city. So those three are my top three.
[00:02:42] Susan Barry: Okay. I was going to say Mexico City or Porta Vallarta. I had the most delicious tacos of my entire life in Porta Vallarta. The birria was insane. We ate it every single day. There was like a great stand really close to the place that we were staying. We went on a tour the first night that we arrived and our tour guide told us that birria is for breakfast. So we took her at her word and had that for breakfast every single day. Do you have a favorite kind of taco?
[00:03:15] Josh Kremer: I literally ask that question to every person I interview. And I would say depends on the day, but one of my favorite tacos is Al Pastor Taco, the classic Mexico City Taco. Barbacoa tacos. Then obviously Baja style fish and shrimp tacos.
[00:03:36] Susan Barry: Very nice. Now I'm hungry. So, uh, we're gonna wrap this interview up and I'm gonna go eat tacos. You might be, I think you are, the first person that I've ever met who went from being a chef to working in private equity. That's a pretty big change. Will you give a quick rundown about how that happened?
[00:03:58] Josh Kremer: Yes. So in my teens, I always loved science and was very interested in just the culinary side of the world. Love cooking, and basically I started cooking when I was 12. I worked at a couple different kitchens, 12, 13, 14, and then decided to go to culinary school first focused on bread making and pastries, which is very, let's call it more scientific and science focused and then finally into wines and salted cooking. I did that at Cordon Bleu. And then I worked for a couple years at a restaurant and I just loved the rush of the kitchen. It was a very cool experience and got to do all the stations from started as a dishwasher to prep and all the way to them being a line cook. It was just an amazing experience. After that, I went to hospitality school in Switzerland and really with the intention of after that opening a restaurant. But while I was there for some really weird reason, I got interested in finance 'cause I had never been exposed to that. Took a great real estate class in school and I thought that was so cool and intriguing. So I just got it started to get into it. Did a couple of internships in finance. One at a consulting firm called HBS, then at a private equity firm in New York City. And then next thing you know, I'm working at Blackstone, so quite a pivot.
[00:05:45] Susan Barry: Do you think you'll ever open the restaurant that you had planned? Like, do you still think about it or are you done? I guess you're opening restaurants in your hotels.
[00:05:54] Josh Kremer: Yes, exactly. Exactly. Yeah. I get very involved on the F&B and culinary side. But I try to really inspire our team to do what they do best. So it's really their work getting reflected on all the plates we serve.
[00:06:14] Susan Barry: This was such a shock to me, but like me, you were born in the Florida panhandle, in Pensacola. I'm from Panama City, yes. But you grew up in Mexico City. My very favorite city in the whole wide world. And you've lived all over the place. How do you think that that influences or makes your perspective on hospitality different?
[00:06:37] Josh Kremer: So I think the first one is North America. So I'm a big believer in North America as a region and I was born in the US, lived in the US for many years, but also lived in Mexico. And I think I have that perspective of really understanding the two cultures really well. And at the end of the day, we're in the same region, but Mexico and the US have very different cultures. So navigating that is a little bit of what I've learned the last 30 years of my life.
[00:07:13] Susan Barry: What do you think are the biggest difference cultural differences? That may seem like an obvious question, but I just wanna hear your thoughts.
[00:07:20] Josh Kremer: Well, I mean, to me it's really about the family values. I mean, in Mexico the family's really the center of everyone's life. And everything revolves around the family. Everything revolves around that Sunday lunch or Sunday meal, taking care of your parents and just the family's the nucleus of a Mexican, and in the US it's about the individual. I mean, you see, you graduate high school and you're out of the house. I mean, some people don't even take care of their parents. And so I think that's the biggest difference, and I think both have incredible pros and cons. On one end, in the US you have one of the, I would say, most incredible work ethic cultures in the world. And that has led the US to be the superpower for the last 100 years and continues to be. So, and then in Mexico it's about the family. So, I mean, I've worked with some people, just incredible professionals that their parents get sick and they quit their job to go take care of their parents. And I think that's the biggest difference in cultures. And I think learning how to understand both cultures is something I've learned in these last few years.
[00:09:00] Susan Barry: Which one do you think has happier people? That's such a hard question. You don't have to answer if you don't want to.
[00:09:08] Josh Kremer: Honestly, I don't know. I think Mexico, if you look at the rankings, I think Mexico has a higher happiness than the US. But obviously way lower GDP per person. So happier, but poorer.
[00:09:29] Susan Barry: They say money can't buy happiness. After all of your career pivots, why did you land on hotels? What inspired Paradero?
[00:09:43] Josh Kremer: So I was basically, I lived between London, New York City and Colorado, and while I was there, was very inspired by these hospitality concepts in Africa, Asia, south America, that were taking guests, not just to remote locations, but also to really immersive experiences outside of the property. And Mexico had all been about the beach and bikinis and margaritas for the last 50 years. And nobody was focused on that type of hospitality of showing a different side of Mexico. So met my business partner at a dinner in Colorado and we aligned on one, our love for North America and two, experiential hospitality, and that's how Paradero got started. We brought on board the XCEO of Explorer the leading experiential brand in South America, and we looked at over 800 sites throughout Mexico, all the way from Riviera Maya to Baja. In Baja, we looked at 400 sites.
[00:10:57] Susan Barry: Good Lord. How long did that take?
[00:10:59] Josh Kremer: Yes. A lot of work. One year. One year. Yeah. I think people underestimate the amount of action and work it takes to do something like this. We acquired in 2018, designed the project in 19 with an incredible team of designers. We built it in COVID during 2020, which many people thought we were insane.
[00:11:26] Susan Barry: I mean, good time to build. Nobody's expecting any returns on their investment then, right?
[00:11:31] Josh Kremer: Yes. And we opened in 2021, and now we've been open for five years.
[00:11:40] Susan Barry: Paradero isn't, as you said, a traditional bikinis and margaritas beachfront resort. Why did you make that sort of deliberate decision to go off the beach more off the grid, and how does that shape the guest experience? Like what should someone expect?
[00:11:58] Josh Kremer: Definitely. So I think that was probably one of the one-way door decisions that as we looked, as we honed in on our finalist site, a couple of them were beachfront and then we had this spectacular site in the middle of five ecosystems. And if you look at a picture of these resorts in Africa or Asia, I mean they are in a unique remote place with a incredible ecosystem and there was something about that site that just was so special. It was the combination of cacti forest, next to farming, next to mountains, next to the oasis, next to the ocean, all within a one kilometer radius in one single view. And we took a bold bed of doing it there. And what that allowed was then incredible creative freedom into creating a project and designing a project that really immersed our guests into the different ecosystems and how you were able to immerse yourself in farming or the cacti forest or the oasis. And also by not being in one single beach, we open up all the beaches in Baja that you can visit. So now we take our guests to do experiences. You can do surfing in one beach, a full beach set up in another one, and then you can do a sunset cliff experience in another one and all in one day with our experiences team and I think that provokes more immersive travel into a destination.
[00:13:46] Susan Barry: Will you say a little bit more about Oasis specifically? The reason I'm asking this is at least people my age grew up with their only knowledge of an oasis being in like a Bugs Bunny cartoon that it was shimmering fake waterfall that would then disappear the closer you got to it. What is a real oasis?
[00:14:09] Josh Kremer: Speaking about Baja specifically, it is a mountainous area. So, and it's desert. So what happens is. Over the summer, there's hurricanes or storms that the water gets pulled up on top of the mountains and it trickles down and filters down, and then pops up on both sides of the mountain as these incredible oasis and basically lakes in the middle of the desert. Palm trees, grasses, lagoons, thousands of birds that come in to that specific place. And so there's just a couple In Baja, there's not that many, and we happen to be next to one of the most important ones. It's probably one of the be top birdwatching sites in all of Baja.
[00:15:08] Susan Barry: Oh, that's so cool. I wanna go. What does it take operationally to run a semi-remote property compared to like a branded hotel or even an independent hotel, but in a resort, major resort destination? I'm thinking things like generator, water supply, stuff like that. Maybe I'm not thinking deeply enough, what does it take?
[00:15:36] Josh Kremer: So utilities are a big component and figuring out how to get them there is critical for not just operational excellence, but also for the guest experience. So we were very focused on that upfront and we basically pulled fiber from La Pass, it was like, yeah, it was pretty crazy. We pulled the fiber all the way from La Pass. We pulled the electricity line underground so it didn't disturb the guest experience having cables on top, and we had some backup generators. And we had to, today we have a car or a purchasing van that goes every day to buy all the supplies to the property and goes to the airports, to our different suppliers to make sure that we have all that we need for our team and for our guests. So logistically it's a complex operation. We also have a fleet of vehicles and we have a team of guides that do in and out of property experiences. So it's not like a typical hotel operation where it's just about the hotel, in this case where operating in the destination.
[00:17:00] Susan Barry: It's almost, you're running a tour company in addition to a resort?
[00:17:04] Josh Kremer: Yes. It's kind of like a hotel with a DMC.
[00:17:08] Susan Barry: Got it. So you're in Baja now, I know that you have expansion plans. How do you plan? Where are you going? What are you doing? Tell me everything. Where should we expect to see Paradero next?
[00:17:21] Josh Kremer: I think we're focused on one, our guests, and all of our expansion to date has been driven by our guests. So we started initially with 42 adults only suites, and then we did an expansion for groups and events, which is something we never anticipated, but we listened to our guests. Then we had guests that wanted to come back with their families and they didn't want their kids to go to the kids club and play video games all day long. So we designed a project for families and finally we had some of our guests that said, Hey, I wanna buy a place here. So we designed an incredible project for homes. So in this first location, we're gonna get to 92 keys, which in a combination of suites, villas, and homes. Very low density, keeping the ethos of the place, but really addressing our guests needs and wants. And as part of that, we're gonna follow our guests in terms of what they wanna discover. So, our guests want immersive destinations. I mean, they've been to Cancun, they've been to Puerto Vallarta, but they want to discover the next frontier of that particular destination. So we'll be focused around a place like Cancun but not in Cancun using a secondary destination that is just absolutely incredible. And so we've looked at a couple places there in Riviera Maya and also in Riviera you mentioned Puerto Vallarta. And that's an area that we're really excited about as well. And.
[00:19:07] Susan Barry: Maybe I'll apply for a job I wanna live in Puerto Vallarta. I love it there.
[00:19:11] Josh Kremer: Yes. So those are, I would say, three main targets. But again, I speak to a lot of our guests and ask them where, where else are they traveling? So they're also going to Oaxaca. They're going to San Diego, they're going to via the Guadalupe. So we'll, we're, we'll make sure that we give something very special to our guests.
[00:19:36] Susan Barry: Do you think that you will confine yourself to destinations in Mexico or go to other countries?
[00:19:43] Josh Kremer: I think the near term focus in me is Mexico, but we've explored opportunities in the south of the US. In Utah, New Mexico, Arizona, and Texas.
[00:19:58] Susan Barry: Interesting. We like to make sure that our listeners come away from every episode of Top Floor with some practical, specific things to try either in their businesses, in their personal lives. I think this is similar to restaurants. A lot of people fantasize about creating an independent luxury hotel or a boutique hotel or a bed and breakfast. What do they need to know before jumping in?
[00:20:30] Josh Kremer: I would say the the 10 x rule, which is however hard they think it's gonna be, multiply times 10.
[00:20:39] Susan Barry: Interesting. Do you have an example of how that played out for you?
[00:20:43] Josh Kremer: I mean, just looking at the number of sites, we thought if we looked at 10, 20 places it will be okay. We ended up looking at 800.
[00:20:52] Susan Barry: Yeah, that's insane.
[00:20:55] Josh Kremer: You know, you think, oh, I'm gonna, and it takes a world, right? I'm gonna bring in an architect. We interviewed 20 architects to choose one. So it's just that the amount of effort that it takes is just enormous and it's a big complex operation. So it's definitely, there's definitely some naiveté that's required, but also just understanding of how much energy and action and effort is gonna take.
[00:21:31] Susan Barry: I think you make a good point about the naiveté that needs to be in place, because no one would take onsite selection if they knew they needed to look at 800 sites. That's just insane. Nobody would wanna do that. Speaking of the complexity of the operation, how do you attract and retain talent in these sort of secondary or remote markets? Do the folks live nearby or how does it work with your staff?
[00:22:00] Josh Kremer: So talent and culture is one of our biggest priorities. I spend a lot of my time on that, just making sure that we create the right culture and we attract the best talent and retain the best talent. We try to source as much as possible locally to give an opportunity to the locals to grow and experience. But for certain positions, especially managerial positions, we tend to look outside. So we brought people from all over Mexico, and we provide them housing. And securing housing has been also a very strategic investment from our end, which very few places actually take the time to do, but we go out and we choose the housing and we make sure that it's amazing. And so that whenever somebody comes there, they have a soft landing and they really get to enjoy not just working at Paradero and being with our guests, but also the destination.
[00:23:14] Susan Barry: For travelers, like myself, what's your best tip for getting the most out of this sort of experiential resort stay?
[00:23:26] Josh Kremer: Well, for example, at Paradero, it's about combining and doing all the experiences. I think it's not, we're not a wellness resort. We're not an adventure resort. We're a bit of everything, and I think that's what makes it very special. So a typical day that would've, I would recommend is you wake up in the morning, to see the sunrise in your room and to see all the cacti forest and the different ecosystems. Then you go surfing, maybe you're at beginner, intermediate, or advanced surfers. We have our experience team and we have two surf coaches on our team, and they'll make sure you have an incredible experience. You go have breakfast afterwards at the hotel with our chef. Most of 'em come from the best restaurants in Mexico. Then you chill at the pool for a little bit, get a drink, and just enjoy our spectacularly designed pool. And then you go to the spa, you do a te mescal, which basically is a holistic immersive wellness experience with our Shaman, Tony. After that you do farming, so you get to taste—
[00:24:47] Susan Barry: Wait, farming?!
[00:24:49] Josh Kremer: Yes, you get to taste how the arugula or tomato should actually really taste like.
[00:24:56] Susan Barry: So you don't have to dig holes, you can just take a bite. Okay, good.
[00:25:00] Josh Kremer: Yes. And finally, then you go to a cliff, sunset experience. So you go to a cliff side, a beach, and you have a drink of champagne. And then you go back to your room and you go to our, you have a, we have a star net on a rooftop suite, and you look at the stars before going back to sleep. It's starting all over again.
[00:25:24] Susan Barry: I just feel like I've been on a vacation by listening to you describe that. I have to go to this place. Well, we have reached the fortune telling portion of our show, so you have to predict the future and we'll see if you got it right. What is a prediction that you have about the future of luxury hospitality?
[00:25:44] Josh Kremer: If you look at how trends are formed it’s usually the ultra high net worth individuals that are creating the trends, and they take about 10 to 20 years to trickle down. The ultra high net worth client today is going to these remote brandless, a local resorts. They're no longer going to the Marriotts, Hiltons, and Hyatts of the world. And so this is gonna trickle down over the next 10 years, and it's gonna become where the very high net worth, the high net worth and the aspirational luxury travel we'll want to go to.
[00:26:27] Susan Barry: We shall see. I think you're right, because if anyone's listening to this, they already wanna go.
[00:26:33] Josh Kremer: Yes.
[00:26:33] Susan Barry: If you could wave a magic wand and change one thing about how resorts operate in Mexico, what would it be?
[00:26:40] Josh Kremer: Hmm. I think it's getting the guest out of the resort.
[00:26:44] Susan Barry: Hmm. Okay.
[00:26:46] Josh Kremer: And experiencing the destination.
[00:26:49] Susan Barry: Okay, folks, before we tell Josh goodbye, we are going to head down to the loading dock where all of the best stories get told.
Elevator voice announces, “Going down.”
[00:32:46] Susan Barry: Josh, what is a story you would only tell me on the loading dock?
[00:27:06] Josh Kremer: Well, I lived at a hotel once for about six months. So in my real estate life, when I was working at Blackstone, I moved to New York for a particular transaction and instead of getting a place, I ended up living for six months at the Waldorf Astoria right next to the office.
[00:27:35] Susan Barry: Oh, poor thing. I'm so sorry. What a struggle that must have been.
[00:27:39] Josh Kremer: I mean. It was a crazy experience because I was there for six months and I basically was part of the team, of the staff of the resort. And it was, it was my first time really immersing myself into a hotel and on one side, it made me realize that the hotel is really 24/7, 365 days a year, has a beating soul and pulse that I think no other very few businesses have that. Then on the other hand, it just made me value as well, what it means to have an apartment with a proper kitchen where I could cook.
[00:28:27] Susan Barry: So were you ordering room service or just going out to dinner every night?
[00:28:31] Josh Kremer: A little bit of both.
[00:28:32] Susan Barry: And any favorites from the Waldorf? Like any favorite things about that hotel?
[00:28:38] Josh Kremer: I mean, I was pre-renovation. I think they've, they just renovated the hotel and it's, I haven't been, but it's supposed to be spectacular. But I just love the location, Park Avenue being the lobby experience was amazing and just the staff there was just so welcoming it obviously that type of hospitality is very different to Peradero, but I think the soul of hospitality is the same. And so that feeling of being taken care of is something that I experienced there. And I always make sure that we translate that to our guests. They're staying for one night or even one week. We've had guests that stay for a couple weeks at Peradero
[00:29:33] Susan Barry: Anybody for six months yet?
[00:29:34] Josh Kremer: Not yet. Not yet. Well me. Yeah. There you go. I live there.
[00:29:40] Susan Barry: Josh Kramer, thank you so much for being here. I know our listeners have a new addition to their bucket lists, and I really appreciate you riding with me to the top floor.
[00:29:50] Josh Kremer: Thank you, Susan. It was a pleasure to be here. Thanks for having me and you do an amazing job with your show.
[00:29:59] Susan Barry: Thank you so much for listening. You can find the show notes at topfloorpodcast.com/episode/210. Jonathan Albano is our editor, producer, and all around genius. He even wrote and performed our theme song with vocals by Cameron Albano. You can subscribe to Top Floor on Apple Podcasts, Spotify, or wherever you like to listen and your rating or review will go a long way in helping us give you more of what you like.
[00:30:34] Narrator: Thanks for listening to the Top Floor Podcast at www.topfloorpodcast.com. Have a hospitality marketing question? Reach us at 8504049630 to be featured in a future episode.