This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Back in May, Business Week Pursuits Travel editor Nicki Eckstein had a story that mentioned Virtue. Oh, so it's a global consortion for luxury travel specialists and have they were seeing a fifty percent increase from a year earlier in the number of people seeking its services. People, Tim wanted to travel and they wanted help in doing so. Yeah, it's not just us.
We're ready to get out there. Take me away, Take me away, as long as our plane does in our flight doesn't get canceled. Right. Alan Firstman is the founder, chairman and CEO of Montage International. They've got properties all over and they're in the Bahamas, Laguna Beach, California, Deer Valley that's in Utah, Los Cabos, Mexico, and more. Alan Firstman joins us via zoom from Orange County, California. Allen, good to have you with us. How are you. I'm great, Tim, Thanks,
it's a pleasure to be with you. Well, it's good to have you back with us. I We were reminded by producer Paul Brennan and my colleague Carol that you were. You were on with us years ago before the pandemic. It was before I even was doing this, and we just wanted had an update on what the last two and a half years have been like for you. Been well. FROST has been very exciting times. Obviously, COVID was traumatic UM,
but we once once the vaccines UM we're prevalent. We saw a return to business levels and the last two years have been UM exceptionally strong for our company, with domestic resourts, luxury resorts, and the inability to travel to some of the global destinations. UM many the luxury consumers discovered us and we've seen just a tremendous increase in business and we've been particularly busy opening new hotels and resourts. Over an eighteen month period in the last couple of years,
we opened six new hotels, both Montage and Pendry's. Wow. Wait, so take me back there from moment all and before we move on, so did you guys just did you have to shut down completely just because there was no travel happening for for for the first few months, UM virtually shutdown. There was some hotels, we had a residential component that we would operate UM barely UM. But it came to a to a stunning halt in in the in the early stages of COVID. Okay, and then it
started to come back, certainly as vaccines came down. Because what's interesting is, I remember, you know, talking about everything shutting down. Then there were people who realized, Okay, I can't go back to the office for a while, I can work from anywhere in the world. Did you see any indications of that where people were like, well, if I'm going to be home, why didn't I go live somewhere else that's a lot prettier and nicer and maybe has an ocean view and I can work from there.
Did any of that play out for you guys. Absolutely? And then we leaned into it and offered UM schooling for the kids that we're doing remote learning. You could be on vacation at Montage Palmental Bluff and we would set up UH mostly tutored, monitored study room for for kids to do their schooling. And you can combine vacation and and UM and either school work or work. And that's one of the things we're seeing in our industry
with untethered working, so to speak. So you could um take a Monday or Friday or even midweek and and be productive and from from from a hotel suite or a room and um enjoy the best of both worlds. And I think that I think COVID accelerated people feeling comfortable doing that. Okay, so bring us up to speed
now on on where you are. Because at the same time, with the hike and with the you know, increasing demand that we've been seeing when people wanted to get back out, at the same time, it's been tough for companies like yours to to find talent, to find the people to actually help staff these hotels these properties. Give us an update there. Yeah, Well, staffing has been from an industry perspective, the biggest challenge we've been But but it's it's it's
not a um one size fits all problem. Some markets rebounded much more quickly than others. For example of going to Beach or our montharger is fully staff been so for a while now, um, it's it's it's it's it's a stronger labor labor market. But the emphasis on hiring, retaining, recruiting, training, and the creativity to to get the best talent has
never been more important. And UM assisting in finding housing and relocating people to different markets to help support those markets where you don't have folks UM has become a keen focus for for for our industry. Hey, listen, just got about thirty seconds and then we're gonna take a break and come back and talk some more. But in thirty seconds, are you paying? Are you having to continue to pay though a lot more for those workers? Wages
have gone up? Um? UM that that was a reality of of supplying demand and and and but not not nothing that um that we did we didn't expect actually and that UM and you'd seen it actually in room rates, it's been it's so much that's been passed on obviously to to our guests. UM. But we've been UM. We've adjusted rates and incentives and then whatever we can to
to stay fully staffed. All right, Well, listen, we're going to continue to talk about this because I'm also curious about some other inflationary pressures that you might be dealing with. And then I want to take us around the globe and tell us where we can go visit a montage residents or you know, take a vacation we're gonna come back with Alan Firstman, founder and CEO at Montage Internationally. He's joining us via zoom from California. Will continue in
just a moment. So we want to get back to our guest still with us as Alan Firstman, founder and c at Montage International luxury hospitality management company. He's still with us via zoom from Orange County, California. So, UM, Allen, let's talk about Uh, we were talking. Let's just finish up. I kind of where we were before when we talked a bit about inflationary pressures. You talked about wages have definitely come up. Are there other inflationary pressures that are
packing you guys as well? And I think about food transportation? What else is across the board? The supply chain issues read havoc on the construction we were doing and building our newer hotels and also getting products. So um, it's created pressure on pricing on virtually everything we buy. UM. And that's UM, that's been the reality we we we've dealt with over the past six eight months. How have
you passed along these prices? To guess at this point how much have you had to raise prices since pre pandemic there's been there's been price increases. We've been we've been the leader in we've been the rate leader in the markets that we perform. But but for for us, it's also about what kind of value are you adding? So our focus needs to be not just on pricing increasing,
but what other what other value things can do? For example, UM Montage are gonna beach where I'm sitting today, We've added new amenities and services that that we didn't have before, entertainment at the pool seven days a week, and a virtuality experience, and some other things to help make it a value proposition not just a price proposition. So tell us about how it all works. Do you do you actually own all the properties UM? Are you just you know,
overseeing them? How does it work? We're hotel management company, not like four Seasons with Carlton Marriott UM, so we we manage UM luxury properties. Often will take the lead role in UM finding new opportunities and work with hotel developers and owners UM and then we provide the brand standards and the and the creative energy to to continue to put forward great Montage and Penry hotels. Where are
you seeing the opportunities right now? For expansion for growth. Well, we're seeing it um resort destinations, which have always been a strong suit for Montage, and we're seeing great urban opportunities for Pendry and there'll be some for Montage as well, major gateway cities. There's great interest internationally when we open our hotel in New York City are Pendry UH Manhattan West UH. It has been incredibly well received and of
course that's that's given us great visibility. In fact, it's the number one hotel in New York on trip Advisor right now, and we've had just incredible support and it's created even greater interest UM for hotel developers owners as they looked to build new iconic hotels. Well, I do wonder Allen. You know, you guys played definitely into the high end, and I wonder about you know, how much you think or see your consumer UH is pretty resilient to the economy. Because we are talking so much here
at Bloomberg right about what's going on questions. I think one of the latest stories in the Bloomberg about chance of a recession UH in the in the making. So is that something that you have to be really that concerned about? Is your consumer? They can deal with it, they can deal with it better. Um. But what we deal with recessions, we you know, in you know, oh nine tend you know, um, we felt it as well. UM. But luxury tends to tends to bounce back, so quicker,
a little more resilient. Um. But um, And there's there's there's a reduction in spending even at the ultra high end in in in a in a recession. But we are much more insulated than than um different products. You know. I was thinking, Carolin, I've been talking a lot about I know is miserable right now, and flights are miserable if you have to fly commercial, which most people do
of course. So Alan, I'm I'm wondering if you're seeing if that concerns you at all, that it's just so difficult for families to get to these places in some cases that they're saying, you know what, we're just not gonna go, We're gonna drive somewhere because it's not worth the hassle. Is that concerning you? It does? But in fact, we've I think been somewhat of a beneficiary of that because the locations where our hotels and resorts are UM haven't had the same level of challenges that some of
the other markets. I mean, try going to Europe today and watching the news and seeing what's happening. You know, where's your luggage going, and what kind of lines and what kind of problems are gonna face. I think that actually is driving greater interest in North American travel and resources some and we have some great drive to destinations also, which completely removes the hassle of air travel. For now, we'll tell us about kind of some of the destinations,
and it is interesting and I'm curious. Is it people who just want to come and stay for a week or two or is it people who actually want to live and maybe make a purchase of some sort. You get a combination of both. Often it starts with a weekends stay or or a week or two visit, and then it transforms itself into acquiring acquiring a home. We have read everyone of our Montage hotels and and most of our pendryes, we have a residential component where you
can um live what you've just experienced. So UM, being able to experience a Montage hotel and then be able to live it is a dream for many UM and we the kind of locations were in our our our ideal for primary or secondary residences. Well, and I wanted to just talk prices because I'm looking at one overlooking
the azure waters of Santa Maria Bay. I can go for that about three and a half million starting at So give me an idea of the range of pricing and who ultimately does the buyers at US buyers is that European buyers. Give me an idea. We have international buyers, but the predominantly a North American US buyer um and across the portfolio, our homes range from three million and
thirty million dollars. It's a it's it's, it's it's it's a broad range, but it's some of the most uh the most um highest priced reels state UM and and in our brand and the experience that we're selling helps drive huge premiums. Like I'm looking at the website, there's stuff sold out to him. Are they doing? Are do you doing any fractional alan? Do you see a opportunity there?
We are We're introducing our first fractional opportunity up in our big sky Montana project there where we're we've sold out of our um whole ownership that we had in the building and UM we're doing some more cottages. We're also building another UM another tower that that will connect to Montage Big Sky that will have UM fractional product in it as well, so it will broad in the buyer base and more and meet another need more summer or winter demand for Big Sky. Do you think or
is it equal? Equal? It's pretty, it's amazing, pretty equal. Big Sky is the is less than an hour from the entrance of West Yellowstone and so we have we're the beneficiary. You want to go see Old Faithful, We're actually the best place to to go. So we have the benefit incredible skiing, ski and ski out. And then in the summer we have a golf course right right at our front door, and we have let's go, you know, fly fishing summer winter. I see a remote broadcast in
our future at a Montage. Let's work on that. Allen, all right, have a good weekend. Great to check in with you. Alan Firstman, founder and at Montage International. Joining us via zoom from Orange Country at Orange County, California,