Transcript: Episode 215: Fire Trucks at Tiffany's

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[00:00:00] Susan Barry: This is Top Floor episode 215. You can find the show notes at topfloorpodcast.com/episode/215.

[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. Ashley Ching started her career in consulting, then spent nearly 13 years at Tiffany and Company, including 5 years in Asia running global merchandising operations. She moved to the company store as head merchant, sourcing home goods worldwide, and seeing firsthand the durability gap between retail and hospitality-grade products. Frustrated by inconsistent stays when traveling with her four kids, Ashley founded InHaven to bring hotel-level standards to vacation rentals. Ashley recently published a case study on Vacasa and Ambridge, extracting patterns that repeat across decades of large hospitality management companies. Today, we are going to talk about the five pillars behind successful hospitality management and why getting too big can create diseconomies of scale. But before we jump in, we need to answer the call button.

Call button rings…

The emergency call button is our hotline for hospitality professionals and basically anyone else with a burning question. If you would like to submit a question, you can call or text me at (850) 404-9630. Today's question was submitted by Amari. Here is Amari's question. This is so tailored for you. What is the value in putting out a free research study? What does a company have to gain, and are the results even trustworthy? Well, well, well, Ashley, couldn't be more perfectly suited to you. What value did you think you were gonna see when you put out your study?

[00:02:26] Ashley Ching: So at InHaven, we launched in late 2022, and so we were new. No one knew what InHaven was at the time. And so it's been very important to not only be able to sell what we do at InHaven, but also to quickly add value to the industry and help our customers make better business decisions. So launching this case study for free has enabled us to expand our reach beyond just our day-to-day customers. We've been able to reach a lot more people because they're just interested in the findings, and then they wanna find out more about InHaven. And it's also positioned InHaven as a real thought leader within the vacation rental industry. So we're getting a lot more opportunities to come and podcast like this one, to have speaking opportunities at conferences. So it's really been proven to just get our name out there. From a thought leadership perspective, and more of a perspective of adding value vs. just trying to sell what we do at InHaven.

[00:03:26] Susan Barry: It's interesting too because you know, the concept of thought leadership is not, I don't think new in hospitality, but there is a difference between creating new and interesting information for people to think about and posting there's no I in team. This is real thought leadership. So congratulations, you've done an amazing job.

[00:03:51] Ashley Ching: Thank you.

[00:03:52] Susan Barry: Well, from Tiffany display cases to vacation rental kitchens, I wanna understand the through line and how you think about product standards, guest experience, like are there things from Tiffany that inform what you do now, or have you forgotten all of it?

[00:04:13] Ashley Ching: No. So, really, at the core of my career, whether it's Tiffany and Company or now in vacation rentals. I have been committed to delivering amazing customer experiences by balancing certainty with authenticity. So at Tiffany, I saw really both sides and New York. I was, I first started at the corporate headquarters, and so there it was all about delivering consistent and remarkable guest experiences from creating timeless jewelry to delivering refined service and really giving our guests a sense of luxury that they could count on. Five years into my career at Tiffany, I was asked to move to Hong Kong to run Asia merchandising. And so when I went out there in Asia, you know, we were tasked with driving demand to our Tiffany stores. So it meant really honoring local culture. So I really pushed our colleagues in New York to introduce more rose gold, which is the preferred metal there.

[00:05:09] Susan Barry: Oh, interesting.

[00:05:10] Ashley Ching: Yeah. And to create a new collection of couples rings, which is widely popular in places like China and Korea, but a concept that's not widely known in the West.

[00:05:19] Susan Barry: Wait, say more about couples’ rings. Are couples rings for weddings or for life?

[00:05:24] Ashley Ching: They’re not just for weddings. So anytime you date, to display your love for each other, you buy matching rings in gold or platinum.

[00:05:32] Susan Barry: That's cool.

[00:05:33] Ashley Ching: And so this isn't sort of a one-time purchase like the idea of a wedding band is. This is a multi-time purchase throughout your life. It starts when you're just a young kid.

[00:05:42] Susan Barry: Okay.

[00:05:43] Ashley Ching: So we introduced this. If we had the product that was more about just pulling together marketing campaigns to show that these rings, that were traditionally used for weddings or for just fashion purposes, could be used for couples’ rings as well. So my experience there at Tiffany was all about blending consistency with personalization.

[00:06:06] Susan Barry: And do you think that it's the consistency that lodging operators routinely miss or something else?

[00:06:13] Ashley Ching: Yeah, so it's funny. This lens really carried into hospitality. I grew up around travel. My mom's a flight attendant, my dad was always on the road, and my first career was in management consulting, where I was really just living out of a suitcase. And I saw firsthand in the late 90s, how uncertain hotels and motels could be and this really changed when Westin launched the Heavenly Bed. Westin declared, when they launched the Heavenly Bed, that good sleep was no longer a luxury. It became a standard. And this one standard really reset expectations and changed everything. I actually sought out, when I was a young consultant, hotels like the Westin so I could be guaranteed a great night's sleep.

[00:06:56] Susan Barry: That’s so funny. I have to tell you - so I opened a Westin, it was the first hotel that I opened from a hole in the ground. And I used to tell this story of the first time I slept in a Westin Heavenly Bed, that I was late to meet my boss for breakfast because I was like sleeping so well that I could not get out of the bed, and that is the absolute truth. Those beds are amazing. I have one upstairs right now.

[00:07:20] Ashley Ching: They're amazing. And it's funny that every single hotel brand really followed suit and not only standardized the bedding, it ran over into the bathrooms. And now 73% of the US hotel supply is in branded hospitality concepts. And so it's funny, when you look at the vacation rental industry, we are exactly where the hotel industry was 30 to 40 years ago. So InHaven was really founded to address that same uncertainty that we found in hotels. So we partner it InHaven with professional property managers to really set and maintain standards around the essentials of the stay. So the sleep, bathing, eating, and cleaning. So guests know what to expect.

And so as I traveled as a mom of four, especially, I love staying in vacation rentals, right? Hotels really don't suit us. We need multiple bedrooms, we need a kitchen. But too often I find myself wondering, will the beds be comfortable? Will there be shampoo? Can I cook a real meal here? And so InHaven has really been built to solve these questions by bringing hotel-level consistency to rentals, while kind of preserving that authenticity that makes each home unique. And so that's really been the through line is that balance of consistency with authenticity.

[00:08:37] Susan Barry: Got it. I have to dive into the case study because it's so interesting. We could probably make an 8-hour podcast about this.

[00:08:45] Ashley Ching: Okay. Okay.

[00:08:46] Susan Barry: But hopefully, I have picked out some of the things that will at least give everyone like a good look and then they can read the whole thing for themselves. So it's titled A 25 Year History of Hospitality Management, Why Local Wins and National Scale Fails, which is a bold statement, FYI. And I think it presents really compelling conclusions, but also maybe some counterintuitive ones about how centralized hospitality property management wins and fails. Tell me first what triggered the research? Like obviously, I know you wanted to create some thought leadership, but was there a moment either from Vacasa or from Ambridge that you thought, this is much bigger than just a leadership failure, this is a structural issue?

[00:09:36] Ashley Ching: Totally. So the catalyst for this case study, for those of you that didn't follow this as closely, was really the near-concurrent failures of the two largest hospitality management companies. So, Vacasa and the vacation rental space in Ambridge in the hotel space. And so late last year, on December 30th, Vacasa announced its distress sale at a share price 97% below its IPA. The IPO was just running outta cash, and then just 17, late days later, you cannot make this up, Ambridge, that at the time was managing about 1500 hotels, announced its own bankruptcy restructuring.

[00:10:11] Susan Barry: Well, let's be clear that they didn't announce bankruptcy restructuring, they announced like some magical other set of words that described a bankruptcy.

[00:10:23] Ashley Ching: Yes, exactly. Yes. So that really made us stop and take a pause and say, okay, how did the two Giants of Hospitality management, one in vacation rentals and one in hotels, fail at almost the same time? So we started to dig into the history of both companies, and we saw something remarkable, their journeys really, and they went through five key phases of company life really unfolded in lockstep. So both of these companies started with organic growth. And then they moved into private equity roll-ups, and then they went whale hunting, and they went after some really big acquisitions. And when they each reached their peaks of Vacasa at 4,000 units, Ambridge at 1500 churn started to really take over. Their owners were churning, their guests were churning, and that finally led to their collapse. And so it's really interesting, and in the case study, we line up the two timelines. I mean, they practically knew each other. And so then we started, okay, well. We zoomed out a bit further, and we went back to the 1990s, and we realized that these two, Vacasa and Ambridge, weren't just anomalies. They were just the latest in 25 years of hospitality management companies destroying shareholder value.

[00:11:38] Susan Barry: Wow.

[00:11:39] Ashley Ching: So we saw the same story play out with resort quests and vacation rentals and with interstate and maristar and hotels. And so overall, and over these large-scale roll-ups really ended in the same way. And so that's really what led us to just reach out, and we need to learn more. So you know, we spoke to, I wanna say hundreds of executives in hospitality management across hotels, vacation rentals, and restaurants to understand “Why these companies failed and what makes for successful hospitality management”.

[00:12:14] Susan Barry: And people would talk to you, they weren't scared, or did you sort of let them be anonymous and wear a wig and whatever?

[00:12:20] Ashley Ching: We let them be anonymous. Luckily, fortunately, many of them have allowed us to share their stories in the case study because there were some fascinating ones and some fascinating learnings. But I think what was really interesting is that we started to interview these executives, and they all kind of gave us the same 3 explanations of why they thought the failures occurred. They would say, okay, it was weak CEOs, or we heard a lot of, well, it was private equity, or we heard a lot that there was, you know, these external events like 9/11 or COVID, which led to demise. And, but we just were not satisfied with these answers because we,

[00:12:56] Susan Barry: Those aren't true. They're not right. I mean, I can tell you from working with these people that's not the truth.

[00:13:03] Ashley Ching: Right. So we looked, just looking at the CEOs, blaming the CEO. There have been 15 different CEOs and management teams over the last 25 years that have tried to solve for national hospitality management. So we really kept digging and asking more questions to get beyond these sorts of media narratives. And that's when we really uncovered a lot of patterns. And that's when the 5 key pillars of successful hospitality management emerged.

[00:13:33] Susan Barry: So,

[00:13:34] Ashley Ching: Mm-hmm. Go ahead.

[00:13:35] Susan Barry: So, I was just gonna say, give us a tour of those 5 pillars. What are they, and how can you tell when one or more are failing?

[00:13:43] Ashley Ching: Yeah, so the way to think about the five key pillars is that they're not absolutes. They're really guiding principles. And the more that a hospitality management company embraces them, the greater chance they have of success.

[00:13:55] Susan Barry: And when you say success in this case, do you mean not going bankrupt or do you mean scale to the level that Ambridge and Vacasa and all the others have tried to achieve?

[00:14:07] Ashley Ching: It's really around success, around profitability, around scale, and around service, depending on where they wanna align. And I should be clear that we're really focused on hospitality management companies. These five key pillars don't apply to brands, distribution platforms, and owners. Those have different dynamics. So, the 5 key pillars that emerge are, one, the first pillar is a curated portfolio. So we found that successful operators are really disciplined about which properties they bring on and they accept. And a failure sign of this pillar is when there becomes too many bad apple properties. So, we always know that there's gonna be a bottom 10% of your portfolio. It's when the portfolio becomes the bad apples, become 20%, 30%, which becomes a real distraction to the organization and really drains resources. So, having a curated portfolio is critical to the success of property management.

[00:15:07] Susan Barry: Interesting.

[00:15:09] Ashley Ching: The second key pillar was targeting properties with similar demand drivers. So we can group properties around common demand drivers, whether it be like location or geographies like beach ski, it could be preferences like business travel. This grouping of similar demand drivers really creates operational focus and marketing clarity. And so when companies start to chase too many unrelated markets or too many different demand drivers, costs rise, and the guest promise gets diluted.

[00:15:42] Susan Barry: Do you think that geographic disbursement is the same as too many demand drivers, or do you mean as long as everything is like Ken says in the Barbie movie, “My job is beach.” It doesn't matter how many different geographic locations it is if we're always focused on beach. Does that make sense?

[00:16:04] Ashley Ching: Yeah. We've seen successful property management companies. I'll give you an example of Abode Luxury Rentals in Jackson Hole, Sun Valley, and Park City, they really focus on high-end properties and ski towns, and so that's successful. Also, their executives live within a couple hours drive to each of these markets, so they're nearby. So, we've seen it be successful when you have similar ski towns and luxury within those ski towns that can be successful. It's when you're trying to maybe take on ski towns that are all over the US, scattered around, and then you're taking on different types of quality tiers from economy to luxury that it can really start to distract the organization.

[00:16:46] Susan Barry: Understood.

[00:16:46] Ashley Ching: The third key pillar is on a limited number of owners, and so this was actually one of our most interesting findings. We hadn't read about this a lot in business school papers or whatnot, but what we heard over and over again from the executives that we interviewed was that you need to make sure that you have a manageable number of owners so you can quickly align on standards, you can build relationships, and you can plan better as a company long term. And so when you have take on too many owners and you see conflicting demands, you have then constant churn and strained resources. So in the hotel space, when we studied the hotel space, we haven't seen a hotel hospitality management company successful with more than 300 hotels, which you know, there's obviously not 300 owners, but there's a subset of that. We don't know what that number is. We're still kind of trying to uncover what that number is for the vacation rental industry. How many owners can you manage?

[00:17:45] Susan Barry: Interesting.

[00:17:47] Ashley Ching: The fourth pillar was making sure that you have local oriented operations and not centralized. So, we heard over and over again in our interviews that hospitality is really delivered on the ground and the best companies keep leadership and decision making close to the properties and with the local managers really embedded in that local community. And so the failure sign that we see is when operations become overly centralized, like for example, finance or staffing, or guest services. And that leads to a lot of frustrated owners and guests. Can you imagine, your wifi has gone out, and I'm just talking about the vacation rental space in a home, and you're calling someone in Portland, you’re in Maine and you're calling someone in Portland to get help who has no idea where you are isn't local to the market, can't get to the home quick enough. And so that's what causes a lot of frustration. And then the fifth key pillar is around empowered local hospitality professionals. So, beyond being local, teams need authority. And we talked a lot about with these executives around how they hire people with hospitality genes. These are people that get yelled at all day from their owners for guests, but show up every day trying to create the best experience possible for all their key stakeholders. And so when this pillar breaks down, you see a lot of disempowerment. So, for example, with Ambridge, instead of these hotel management companies, instead of thinking about what's best for my owner or what's best for my guests, they're thinking about getting corporate approval.

[00:19:28] Susan Barry: Yes. This is the key if I had been one of your interviewees, that is the one that I would've probably surfaced the most. That instead of achieving the goal, the investment goals of the property or the profit goals, you're very focused on your corporate overlords.

[00:19:48] Ashley Ching: You're very focused. And they might say, well, sorry, Ashley, that's not the Ambridge way. And so that hospitality professional that has a hospitality gene is not gonna stay at that company, right? They're gonna go to another management company locally, where they can feel empowered. And so we saw that these companies experienced a lot of brain drain, and the people that were left at the companies were actually some of the worst employees.

[00:20:11] Susan Barry: It's interesting to hear that. You also talk about something else that I think is counterintuitive, which is that these large property management companies actually face diseconomies of scale at a certain size. You know, that is the lead point of differentiation for the biggest ones, right? They're like, economies of scale, cheap toilet paper, blah, blah, blah, blah, blah. But you found the exact opposite. Why is that? What are the sort of hidden costs or things that people underestimate when they're chasing that? We've got so many units efficiency.

[00:20:52] Ashley Ching: Yeah, this is one of my favorites. So, economy to scale make a lot of sense in industries like industrial and distribution. The bigger you get, the cheaper each incremental unit becomes. But in hospitality, our research actually shows the opposite. As you grow, the costs actually rise.

[00:21:11] Susan Barry: That’s so crazy.

[00:21:13] Ashley Ching: Yeah. Yeah. So let's take labor as an example. We studied an organization called Ball Corporation, which is the world's leading supplier of aluminum packaging for beverages. And at Ball, they need 18 people to run 1 production line that can produce over a billion cans a year. So whether you produce a hundred thousand cans a year or a billion, it requires the same headcount, 18 people. But in service industries like schools or hospitals or hospitality, the opposite actually happens. So one of our favorite studies was done on a school district, just west of Dallas. It's one of the fastest-growing school districts in the company. And, it more than doubled its student size over the past decade. And so as you bring on more students, you need to maintain that same student-to-teacher ratio. But then, as you bring on more teachers, you need more administrators and more specialists, and you need more to invest in more programs like art and music, and special education. And so as they brought on more students, they actually grew their staff rate at a faster rate than the student rate. And why is that?

Because as you scale in a service industry, you need more people, and we feel that hospitality is no different. The more homes or the more hotels require more layers of managers, inspectors, and coordinators. So you don't really see the same efficiencies when it comes to labor. And then to your point earlier, in purchasing, so toilet paper, if we go back to Ball Corp, 55% of their costs are in materials like aluminum. So the more volume they do means the bigger discounts on material costs, which actually really impact their bottom line. But in hospitality, more than half of the costs are in labor. So as you grow, you're actually exposed to higher wage rates. People want better benefits. So it's not the savings you might expect. So that toilet paper doesn't really actually impact the bottom line like labor does.

[00:23:18] Susan Barry: That's interesting.

[00:23:19] Ashley Ching: Yeah.

[00:23:19] Susan Barry: And I think that that's probably what those companies are pushing is the procurement savings, maybe without balancing that out with the increases on the labor side.

[00:23:33] Ashley Ching: Yes, exactly. So, you know, we found that there's a lot of hidden costs that leaders underestimate. In hospitality, and that growth actually doesn't create efficiency, it creates more complexity, more overhead, more rising, you know, labor costs. And so that's why so many large-scale management companies eventually hit diseconomies of scale.

[00:23:54] Susan Barry: We like to make sure that our listeners come away from every episode of Top Floor with tips to try either in their businesses, their hotels, their restaurants, their personal lives. I think we've got a lot of management company listeners in our audience, and so this is for them. Why does the number of owners, so not just assets, but owners cap performance? Is there a place that hotels and short-term vacation rentals diverge on that? Or is it in line?

[00:24:26] Ashley Ching: Yeah, so over and over again, as I mentioned earlier, executives we interviewed told us the same thing. Too many owners slow you down. It distracts your team. It makes it impossible to maintain strong relationships. So first, the number of owners and as they rise, really start to impact the speed of decision making. So in hospitality, we do believe that it requires quick and decisive action. And we love this example, we looked at the Pappas restaurants. They're based in Texas, and in the Midwest, they own and manage about 88 restaurants. And so an example here is the family had learned several locations in the Dallas market weren't meeting their cleanliness standards. And so they personally inspected all of them, confirmed this was an issue. And over the weekend, replaced 10 general managers with their assistant general managers. Really swift.

[00:25:19] Susan Barry: Yeah, clean up!

[00:25:20] Ashley Ching: Really sending a message that these standards matters and clean up. Exactly. So if those 88 restaurants were owned by 10 different investor groups, that decision, you know, that decisive action would've been impossible. So limiting the number of owners really does speed up the decision-making, and you can make changes very quickly that will overall improve the overall experience of the guest.

[00:25:47] Susan Barry: There's something there, I don't exactly know how to tease it out, but I remember a distinct period in my hotel career when our, meaning my brand and management company. They were one and the same attitude toward an ownership group went from you hired us to do this for you. Get out of our business to, we will lay down in the street and let you run over us with your truck if you'd like. Whatever you say, we're happy to do. And it was around the great financial crisis. So, I almost wonder if there doesn't need to be some clawing back of power. Or if there can be, has it already been abdicated to the degree that now there's no getting it back?

[00:26:38] Ashley Ching: Right. And there's just so much competition these days. Yeah. So I think people are nervous, completely. We really found that the number of owners can be a distraction to management. Just like you said. Ambridge worked with over 350 different hotel owners, each demanding attention, and they all wanted Ambridge to treat their property as if it was their top priority. Rightfully so. And so we found that, you know, in speaking with them, that executives were constantly pulled in different directions, trying to piece them. And if you contrast that with a company called Extended Stay America. Extended Stay America both owns and manages their 560 hotels. They can make very bold strategic moves like realigning operations and sales without a distracting approval process. You know, obviously there it's an extreme. They own and manage everything, but the more owners you bring in, the more distractions and the harder it is to get everyone on board.

[00:27:36] Susan Barry: That absolutely rings true. Something else that people say when it comes to like turnarounds or you know, problematic companies, companies that have been through the ringer, as it were, is that it's all on the CEO. The right CEO can fix it. Does your case study support that? Do you agree or do you think that the CEO needs certain things in place before she can make that happen?

[00:28:04] Ashley Ching: Yeah. I would just say, I would kind of modify your statement. I would say that the right CEO can fix it if they have the right strategy in place. So our case study makes the case that prior failures and national hospitality management was due to the strategy of building national scale. And rather, what we found is that the keys to success in hospitality management is in localized operations. So what's interesting to see is that while we've chronicled the failures of Ambridge and Vacasa, the new management teams now are embracing a strategy built around the key pillars to success that we've noted in the case studies. So if you look at Ambridge, Ambridge is focused very much on curating their portfolio. They've already shrunk their portfolio from 1500 hotels down to under a thousand, exceeding unprofitable hotel contracts. And they've also shrunk the number of owners that they work with and are focused on working with owners that have multiple hotels that they can manage rather than these single asset owners. So that's been interesting on the Ambridge side. And then, go ahead.

[00:29:07] Susan Barry: So, that makes me have to ask. There is never going to be a world in which the biggest hotels — Debate me. But where the biggest hotel management company in the whole wide world, says, we're too big guys. We need to get smaller. Let's make less money. We don't wanna IPO, that's never gonna happen. Right?

[00:29:31] Ashley Ching: Yes. But they're looking at profitability. And they wanna become more profitable. And I think exiting these unprofitable contracts and making sure that they have the right team to support the number of owners. I think as they go after new owners, they're gonna look for owners with multi assets vs. these single assets. So I think they're really changing who they're going after and targeting.

[00:29:53] Susan Barry: Interesting.

[00:29:54] Ashley Ching: And then Vacasa, you know, is a great story. Since Casago has taken over, they've really focused on localizing their operations, and they have a franchise model that fully empowers that local franchisee to manage the business to the local customs and build those local relationships that were not possible as a national management company like Vacasa. And so it's gonna be fun. We, the largest Vacation Management Association conference, is happening in Vegas in October, and I'm actually sitting down with Steve Schwab, the CEO of Casago, which acquired Vacasa. And we're gonna go through these case study findings. And discuss a lot of the changes that he's making at Casago that address the pillars of success that we discuss.

[00:30:42] Susan Barry: We have reached the fortune-telling portion of the top floor. So now you have to predict the future, and then we will see if you were right. What is a prediction that you have about the future of lodging management at scale?

[00:30:56] Ashley Ching: So this isn't a prediction so much as an acknowledgement of what history has already shown in hospitality management, whether it's restaurants, hotels, or vacation rentals, local managers have consistently proven to be the strongest operators and the most sustainable businesses. So we really explored this in our case study, and it was very clear, especially in the US, the path forward lies with local operators.

[00:31:20] Susan Barry: Let me ask you if that is true, which I believe that it is. Then does it follow that the investment thesis or the deal thesis of ownership groups needs to change and needs to become, rather than, I don't know, we focus on value, add four-star assets and major markets? Instead, they need to focus geographically to make it easier to have a local team.

[00:31:50] Ashley Ching: I mean, it goes back to those five key pillars you have, you know, you have to make sure that you have those strong local teams in place to deliver on, you know, the best experiences. So I think as long as, you know, I've been asked a lot about, you know, do certain models work? There's some new and emerging models. I'm way more familiar with the vacation rental industry side of things. And anyone can be successful as long as at the local level, they're maintaining those 5 key pillars. And they're focused on two of the three kind of metrics between scale, profitability, and service. You can't achieve all three. I'm not gonna go into this in the case study, but you can achieve two of the three. So you need to align your operations with two of those three metrics.

[00:32:34] Susan Barry: Okay. What would you do if you had a magic wand and could change one thing about how short-term rentals and vacation rentals are marketed today?

[00:32:45] Ashley Ching: This is very easy for me to answer. In every hospitality industry, whether it be hotels, airlines, or restaurants, it's built upon a foundation of a quality framework. So in the hotel industry specifically, there's a chain scale ranging from luxury hotels like the Ritz-Carlton, down to economy hotels like the Motel 6 restaurants have a very similar chain scale where they have the high end fine dining establishments like 11 Madison Park all the way down to quick serve like McDonald's, and nothing exists like this in the vacation rental industry. So at InHaven, we're partnering with our local property management companies to create the vacation rental industry's first quality framework.

[00:33:26] Susan Barry: Okay.

[00:33:27] Ashley Ching: And so, yep. So this quality framework will be based on a combination of quality standards, so for the bed, bath, and kitchen, and cleaning, and then the service levels provided by the management company, so that guests can more easily understand what they're paying for and where they're booking along that quality framework. So our belief is that the biggest difference between a luxury hotel and an economy hotel is how many service staff there are in the lobby.

So at the Motel 6, there's one person in the lobby, whereas at the Four Seasons you have 8 to 10, you've got someone there to push the elevator button for you. I mean, there are people just looking to provide service for you. And so we've done a similar service quality tier in the vacation rental industry, where at our top end, our signature tier, a guest would expect one local service staff person to every five properties. And our lower lifestyle tier, you would expect one local staff person for every 12 properties. And so really it's most important that guests understand what they're booking and what they're paying for. And that when they book, that those places can deliver on their expectations. And so we're hoping that with this new quality framework, guests will have more certainty. They'll know what they're paying for, and property managers can better align their operations, and owners can have a better understanding of how their property will be cared for.

[00:34:50] Susan Barry: So are these standards out and in the world yet, or are they something that you're still working on?

[00:34:56] Ashley Ching: We have just launched the first quality framework.

[00:34:59] Susan Barry: Oh, how cool.

[00:35:00] Ashley Ching: Standards for the vacation administrator. Yeah, so we just launched it at the VRMA conference. On October 12th and we've got over, we're working with several different property management companies across the US, and we have fully standardized about 2000 properties, so guests can now find these properties and book with these property managers.

[00:35:22] Susan Barry: Awesome. Okay, folks, before we tell Ashley goodbye, we are going to head down to the loading dock, where all of the best stories get told.

Elevator voice announces, “Going down.”

[00:35:36] Susan Barry: Ashley, what is a story you would only tell me on the loading dock?

[00:35:41] Ashley Ching: So one of my funniest hospitality moments was at the grand opening of Tiffany's newly renovated Vancouver flagship store. If you can imagine, it was a stunning two-story store with a grand staircase in the middle. And we hosted our top customers for a beautiful grand opening dinner on the ground floor. In the middle of the dinner, our plan was to offer this incredible surprise where ballerinas would suddenly appear from the second floor of the store and dance gracefully down the staircase. So very elegant, very Tiffany.

[00:36:13] Susan Barry: I'm terrified.

[00:36:14] Ashley Ching: So to keep the surprise from our guests, we snuck the ballerinas in through the back entrance of the store, and we asked them to take the elevator up to the second floor so they could dance down the stairs. But instead of the ballerinas taking turns to get into the elevator, all 14 of them piled into the elevator at once. The elevator got stuck.

[00:36:35] Susan Barry: Oh no.

[00:36:36] Ashley Ching: Yes. So suddenly, our dinner, our glamorous dinner, became a fire department rescue.

[00:36:42] Susan Barry: Oh my god.

[00:36:43] Ashley Ching: So we had to call the fire department, and because we had these huge last windows in the store, all these fire trucks pulled up with flashing lights. So it's just bouncing off the walls inside of our dinner. And so what was supposed to be a beautiful surprise became a five-alarm fire emergency.

[00:37:01] Susan Barry: I love this story. Okay, I have to ask. Were you, did you think it was funny, or were you devastated?

[00:37:09] Ashley Ching: So at the time, we did actually laugh about it.

[00:37:12] Susan Barry: Okay, good.

[00:37:13] Ashley Ching: Because you just can't make this up.

[00:37:14] Susan Barry: Yes.

[00:37:15] Ashley Ching: And then Tiffany, we had a bit of humor about it. That's amazing. We were probably equally laughing, equally horrified at the same time.

[00:37:23] Susan Barry: That is unbelievable. So once they were freed, did they like try to play it off and go dance around? Or was it too late at that point?

[00:37:32] Ashley Ching: It was too late.

[00:37:33] Susan Barry: Oh no, that is insane. Ashley Ching, thank you so much for being here. I really want everyone to go and read the case study, which I will have linked in the show notes. I know that our listeners are gonna get a ton of good advice from that, and I really appreciate you riding with us to the top floor, and I'm glad we didn't get stuck in the elevator.

[00:37:57] Ashley Ching: Thanks, Susan.

[00:37:59] Susan Barry: Thanks for listening. You can find the show notes at topfloorpodcast.com/episode/215. 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.

[00:38:35] Narrator: Thanks for listening to the Top Floor Podcast at podcastwww.topfloorpodcast.com. Have a hospitality marketing question? Reach us at 8504049630 to be featured in a future episode.