Transcription: Viceroy Hotel Group’s CEO at SAHIC
 
Transcription: Viceroy Hotel Group’s CEO at SAHIC
16 NOVEMBER 2017 9:43 AM

HNN’s Stephanie Ricca spoke with Viceroy Hotel Group CEO Bill Walshe at the South America Hotel Investment Conference in Buenos Aires in September. The interview is transcribed in full below. 

BUENOS AIRES, Argentina—Viceroy Hotel Group CEO Bill Walshe gave a keynote address at the 2017 SAHIC conference here in September. A full transcript of the address, done as an on-stage interview with HNN Editor-in-Chief Stephanie Ricca, follows here.

Stephanie Ricca: I am Stephanie Ricca with Hotel News Now. And this afternoon I am here with Bill Walshe, CEO of Viceroy Hotel Group. Welcome Bill.

Bill Walshe: Thank you very much. Thanks everybody.

Ricca: So we’re going to talk about your own professional path in the hotel industry in a moment, as well as some of your passions in the industry. But first let’s start by talking a little bit about Viceroy Hotel Group. Give us the brief sketch of what the company is, what it’s all about, and where you’re located around the world.

Walshe: Sure. Thank you, first and foremost. Thank you everybody, um, for the opportunity to be here today. SAHIC is an amazing event. Congratulations on what’s been put together. And, you know, one of the things that I love to do in Viceroy Hotels is to give a shout out to people behind the scenes because in our hotels there are a lot of people who make an incredible difference, who make things happen, and who rarely get seen. So one person I’ve noticed throughout this event that I’d like to say thank you to is the lady in the booth doing the simultaneous translation. I’ll try to make your job as easy as possible this afternoon. Thank you for that.

Viceroy is, in many respects, a luxury contradiction. And what I mean by that is that we are this oxymoron; these two opposing forces that gloriously collide. And they are a consistent individuality. And what we need for modern luxury hospitality experiences is the ability to fuse consistency and individuality. The emerging traveler is looking for something which is beyond the norm. And they have passed through the phase where reputation is acceptable. Every hotel has to be one of a kind, everyone has to have a sense of connection to destination and community. Yet you have to have the underlying consistency in your operating processes and in your sales, marketing and distribution platforms to be successful in doing what you do.

So that’s what Viceroy is. We’re this collision. It’s consistency and individuality. I am the curator of that sweet spot. It’s making sure that we have a sufficient degree of process in the organization that allows us to do things well. But that we stop short of getting to the point where that consistency through process suffocates the spontaneity and the energy and the individuality that the modern hotel guest is looking for. We have 14 open and operating hotels in very diverse locations around the world. We have eight in our pipeline, which I know we’ll come to talk about shortly. So we’re a smaller hotel group. I think I heard (AccorHotels CEO) Sébastian (Bazin) from Accor say this morning that he’s opening a new hotel every 29 seconds or something. Perhaps a slight exaggeration on my part.

We’re a smaller group, but we’re also a group who embrace the concept of collaboration. And by collaborating with others, it gives us the opportunity to punch above our weight. So 14 open, eight in the pipeline. But we’re also members of the Global Hotel Alliance. And the alliance has 35 individual brands, 550 hotels and (76) countries around the world. And a database of 10 million active travelers who are members of the Discovery programme, which is a recognition and loyalty program that we all share. So we’re a small company. And that allows us to be fast — speed to market is everything — it allows us to be independent — I have great owners, both at the hotels that we manage and the owners of the management company. We’re not publicly quoted, I don’t need to worry about the shareholders, stockholders or the views of the analysts in market. We make decisions, we take risks, and we have a lot of fun.

Ricca: And it sounds like you’re able to forge some powerful partnerships along the way to fill in some of those blanks.

Walshe: Very much so. I mean, we’re a brand that speaks to the emerging generation of consumer that I mentioned. This is the consumer who carries an Apple product with them. Who is connected through technology to social media. They’re very adept at communicating in a very instantaneous manner. But one of the things that I’m noticing about the emerging hotel guest is that they are of a generation who care as much about why brands do what they do as they care about how they do what they do. And I think that the ability to communicate purpose as part of the delivery of a product or experience on route to profit has never been more important. And frankly I think that in the hospitality industry, we’ve been very slow to recognize that. Simply saying to a modern luxury guest, “We have chandeliers and carpets and pillows and Frette linen — it doesn’t cut it anymore. People want to know: Am I connecting with a brand or an experience that shares my life values? Am I connecting with people through that brand or that experience where there is a connection of humanity?

Danny Meyer, who created the Union Hospitality Group and Shake Shack in the U.S., put it brilliantly. He said it’s the difference between service and hospitality. Service is present when something happens to you. It becomes hospitality when that action is done for you. And I think that the emerging consumer today is looking to connect with brands whose purpose they understand and who they genuinely believe are in business for their consumers and they’re not just looking to interact to their consumers.

Ricca: Do you find that sentiment growing across the board from all different types, age groups and types of travelers, or is that something reserved mostly for, dare I say it, millennials?

Walshe: Well I think it’s interesting, great question. And I see it happening across all age groups. I think that millennials and the millennial mindset is not defined by the date range within which you were born. I turned 50 this year. I like to think that I have certain thoughts, views, beliefs that are connected to what a millennial would believe. I don’t think I’m not allowed to think that way because I wasn’t born in the age range that defines what a millennial is. And I think when it comes to purpose and understanding purpose and people connecting to brands who have profound ideology, and who are not afraid to communicate and articulate their beliefs, I think that’s just part of human nature, irrespective of age.

Ricca: We’re going to talk a little more about that ideology, in particular at Viceroy, a bit later. But let me backtrack for a moment and ask you to share with us your particular path in hospitality. You live in Los Angeles now. That is not a Los Angeles accent that you have. So tell us about your first job in hospitality and how did you get from there to here?

Walshe: I liked to make money from a young age. So I wasn’t afraid to work at doing it. And the first thing I did, hospitality-related, that made me some money, was probably at the age of about 14. Twice a week I would get on my bicycle and I would cycle about three miles to my uncle’s guest house and I would take out the trash. And then the following day I’d get on my bicycle and I’d go back in and I’d carry back in the empty trash cans after the trash had been collected. So I guess I’m a cliché in one respect in that I’m that guy who’s gone from the trash room to the board room. There have been occasions where it can be difficult to differentiate between the two, but let’s not go there or quote that, please. But I’ve worked my way through the industry. And I’m very fortunate in that I fell in love with an industry at a very young age. I fell in love with hospitality. I knew it was what I wanted to do. And my family business was advertising. Most of my siblings and other people have gone into that. I was supposed to. Father wasn’t happy when I didn’t. But I love what I do and I’ve woken up every morning looking forward to going to work.

Ricca: So with your background with some of the most recognizable hotel companies that we’ve heard about around the world, what do you enjoy most about experiencing the global hotel industry? Because you, like most other CEOs, travel the world constantly. What are some of those moments that you enjoy most about experiencing hospitality around the world?

Walshe: I think the privilege we have to be leaders in any organization is that we have the opportunity to make people proud. One of my favorite things to do in our company is — actually my favorite thing to do in our company is — orientation and to welcome new starters to the organization personally. And to thank them for having chosen Viceroy and to entrust us with their career development. And I always tell them at the beginning of the orientation session that the person who has just entered the room when I walk in is the person in the room with the least meaningful job title in the room at that time. What I mean by that is, hospitality is an industry which is very action-focused. And my colleagues in our hotels typically are very action-focused individuals with action-focused titles. So I might be standing in a room with a group of colleagues, one of whom would be a restaurant manager. And he’s called a restaurant manager because he manages a restaurant. Or I’m standing in a room with a cocktail server and she’s called a cocktail server because she serves cocktails. It’s purpose. It’s evident purpose in what they do. And then there’s me, and I’m the chief of the executives, which is a status title and not a purpose title. So what I always do in orientation is to rebrand myself. I am not the chief executive officer of the Viceroy Hotel Group; I am in reality, through purpose, the chief pride officer of our company. And my sole purpose is to make people proud. If I make my colleagues proud, turnover decreases, absenteeism decreases, productivity increases and it’s a much more fun place to be.

If our guests are proud, boy do they tell other people. And in this day of social platform availability and the immediacy of opportunity to communicate, if they’re proud of an interaction with an experience, with a brand, they tell people, there and then. Equally, if they’re not proud of that connection, they say they will tell that story also.

So, I love traveling to interact with my guests. I love to see their faces. I love to stand unobserved, in a public area of one of our hotels, just to look at the behaviors of the guests. I love to reach out and touch the walls, the chairs, the cushions. I love to see them see something they’ve never seen before and absorb it. And then, ideally, Instagram it.

We just opened a hotel in Chicago on September 1. And there’s an art installation in the lobby which is two full stories high. And — higher than the ceiling in this roof — it is the words of (French novelist Marcel) Proust. It’s … we call it the poem wall, with certain words pin-mounted to stand out. I’ve never seen anything like it in a hotel. I can tell from the looks on the faces of our guests, they’ve never seen anything like it in the hotel. It’s a memory that will remain with them and it’s an opportunity that are increasingly rare in our lives to look at our surroundings and say, “Wow, that’s brand new.” Because we’ve pretty much seen everything.

And the other reason I love my job and getting out and traveling as much as I do is that I believe that the two most important phrases in life are not just ‘hospitality’ or ‘leadership’, are ‘please’ and ‘thank you.’

And I’m not ashamed to go to people and say, “Please may I have your business?” I believe we need to ask for business, be easy to do business with. Nor am I ever too proud or too senior to go and engage with my colleagues or my customers and say: “Thank you. You have many choices you can make, there are many options available to you, and you chose us. And that means everything.”

Ricca: So what we’ve seen scrolling by on the screens every couple seconds here is the Viceroy ideology. Now you’ve made reference to this, but coming up with this was somewhat of a revelation for you after you joined the company, correct?

Walshe: It was. I refer to it as the “accidental ideology.” I joined the company in July of 2012. And about five months later I was hosting my first senior leadership meeting in Miami. And I had no idea what to say. And I thought what would be good thing to say would be to try to articulate what I had found evident in the company: the spirit, the passion, the behaviors, the beliefs. And to put those across in a series of both commitment and challenge statements. And that’s what our ideology is. And I used it at that forum and everybody liked it, and they asked me to use it the following day, so I used it again. And then we started to use it throughout the company. And now I used it all the time. It is the cultural roadmap for the organization. That’s it. It’s the heartbeat of the company. Every word is meant. Every word is activated throughout the organization. We now have a tool kit to bring to life the ideology. And it is the “why we do” of the “what we do” and “how we do.”

Ricca: So, tell us a little bit more, if you could, about that process of bringing an ideology, a culture, to life in the day-to-day business of running hotels. You know, we often hear companies that have a mission, have a vision, but how do you actually translate that into the day-to-day lives of all of your employees?

Walshe: I think, if we look at it from the perspective of what is success and work backwards from it, you know that your ideology has become part of the fabric of an organization when it becomes the vocabulary of the company. When you hear the words of your mission, your vision, your ideology — whatever people have — being used in everyday language. And I got it wrong at the beginning. I thought, “Here’s the ideology, it’s all these words, it’s fantastic, and I can deliver it in speeches. And I went around the whole company and I delivered it to every colleague personally. And I would go into a building and I’d gather them in a room and I’d present the ideology and then I’d leave, and they’d go, “Well, what do we do now?” Because we didn’t have a tool kit and we didn’t have a means of activation. So we created that.

But the underlying message of any ideology ought to be to make people proud and to give people confidence to do what they need to do. I think in many companies today we have become overly risk-averse. The fear of failure. I mean, Viceroy’s ideology is all about celebrating the intent of an activity as vigorously as we celebrate the success of that activity. Because it won’t always be successful. But you learn through accepting risk and trying things. I hear hoteliers around the world talk about, “We empower our people; we give them empowerment.” You cannot give somebody empowerment. They can choose to accept it, but people will only feel empowered if they have the confidence to do the right thing, knowing there’s a risk that it won’t work out. And too many times I see direction to hotel colleagues and companies where it’s, “do the right thing by the guest.” And then they try, it doesn’t work, and they get a note written in their file because they broke a process. There are times in life where it is more appropriate to ask for forgiveness than permission. And, if in the pursuit of extraordinary guest experiences and doing the right thing by our guests, somebody is willing to take a risk, I’m the first person in the company to stand up and say, “I’ll have your back.”

Because if we don’t take risks, we’re just going to go through the same replicated, mediocre, vanilla service experiences that are immediately forgettable and then the brand dies.

Ricca: So is that really how you translate that concept of pride, through your employees, and transfer it onto your guests? You mentioned earlier about empowering guests to have that same pride in the brand, which essentially would make them brand ambassadors, in a way.

Walshe: Yeah, it’s about giving the confidence to our colleagues to allow their humanity to be expressed in the interaction with the guests. We will never be a hotel company that scripts individuals. No one’s ever going to carry a laminated card in their pocket which gives them the words to use in an interaction with a guest. We want spontaneity, we want it to be natural and we want it to be real. We want conversations to happen. Life should be a series of conversation, not presentations.

Sébastien (Bazin), this morning, talked about hotels he’d stayed in recently and how the check-in process can be a little bit underwhelming. You know, I’ve been staying in hotels for a couple of hundred nights a year for many years. I can count on the fingers of one hand the amount of times that I’ve been asked as part of a check-in process, “Why are you here?” Surely we need to know why our guests are with us in order to tailor the experience for them that’s going to allow them to get out of this day whatever they’re looking for. Here’s the question I always get: I walk up to a reception desk, wheeling two suitcases, and somebody looks at me and goes, “Checking in?” And I think, “Wow, wild guess? How did you come to that conclusion?”

And then if you take check-out, the other thing, I’m getting on my soap box here, that I’m on a mission to eradicate from acceptance within our industry is acceptance of the word “fine.” I mean, “fine” is the ultimate profanity that begins with ‘f’. And we accept it. You have a guest that stays in a hotel, maybe for 10 nights, paying $1,000 dollars a night. They check out and the check-out process is an interaction with a desk, but actually it should be with a human being, who’s not looking at them, who says, “How was your stay?”

$10,000 later they go, “It was fine.” And we go, “OK.”

Fine? No. I want: “It was extraordinary, it was outstanding, it was memorable, it was amazing.” Or, be honest with me and tell me it was terrible and then I can do something about it. But the interaction we have between each other—“How was your stay?” “It was fine.”—and it’s not just front of the house, it’s back of the house. We all have conversations everyday where we interact with colleagues.

“Hey George, how are you?” “Morning Mr. Walshe, I’m fine.”

Pointless conversation. Nobody remembers it. Insert the word “proud” into that conversation.

“Hi George, how proud are you today?” Wow. That’s where conversations begin. So I think it’s an obligation we have as deliverers of hospitality, as leaders within hospitality, to make the effort into having real, genuine, human interactions with our customers and our colleagues, and to break away. I think we’re overtrained, to a degree. I think, when we get to a point in hotel companies where we train people what words to use with other people — it’s done.
That was me getting a little bit annoyed for a moment.

Ricca: Now, Bill, you said a line that I like a lot. And I believe it was in your recent TED Talk, if any of you are familiar with that platform, Bill recently did a TED Talk, which you can find online if you search on YouTube. But in it you said this: “Disruption without purpose is merely interruption.” Can you explain that for us and what you think it means in the context of the hotel industry?

Walshe: I think there is an obsession with disruption because we, and again, referring to Sébastien (Bazin) this morning, he talked about the fact that we typically have legacy businesses and legacy assets. And a lot of the people that we compare ourselves to and we like to be like in the new companies—the Facebooks, the Googles, the Ubers, the Airbnbs—have started with a blank sheet of paper. And they’re incredibly disruptive. And we look at them and we think, “Oh my God they’re market cap is the size of four small countries.” And they did that through disruption. We need to be disruptive.

Then we try to be disruptive for the sake of disruption. And it becomes about the process and not the result. I think that true disruption is an identification of absent purpose. What ought we be doing that we’re not doing today, and who should we be doing it for? And then let’s change the operating practices we have in our organization to fulfill that obligation, and the disruption will follow. If we just set out to disrupt for the sake of making noise, that’s all we’ll do, is we’ll make noise. We’ll be like a toddler having a tantrum in the corner of the room. It’s very disruptive, but it’s not actually achieving anything. So I think definition of purpose. And the brands that we’ve mentioned, and that Sébastien (Bazin) mentioned this morning, to me, have a purpose focused route to disruption.

The example I love to use is Tesla. You know, it’s a $50-billion market cap for a brand new—relatively brand new—car company. Elon Musk is a genius. He did not set out to build a company that would have a $50-billion market cap. He set out to advance the cause for sustainable transportation to make the Earth a better place to be. And from that purpose, built an operating model that has become wildly successful because it has connected to a consumer who shares those values. That’s disruption because it was disruption with purpose. Disruption without purpose, as I say, is pointless.

Ricca: That’s a fascinating way to look at it. Now we just have a few minutes left, so I do want to change tack a little bit and talk about Viceroy here in South America. You have an exciting project happening just down the street here. Give us a little background on the company’s history in Latin America, and then talk a little bit about the project that you’re working on now.

Walshe: We’re hugely excited by the opportunities that Latin America has to offer. We’ve been very successful in Mexico for a number of years and we have projects in this region. The reason that we’re excited is that we see opportunity for Latin American destinations to speak to—with conviction, with integrity and with purpose—the reasons that people travel today. People’s expectations for excitement, for memory creation, for cultural immersion … the expectations have never been higher. And I think that Latin American destinations have the opportunity to connect with guests in that meaningful manner. So we have a significant focus on the region. We’ve invested in the region, in addition to my head of development, Sagar Desai, who’s sitting here in the front row, Pablo Botero, who’s a recent addition to our team, focusing exclusively on brand opportunities for us in Latin America. And we think that there’s an opportunity to bring a contemporary interpretation of great hospitality. So it’s never going to be form over function. We’re not looking to bring flash to Latin America. We want to see life through a lens of modernity, but be hosts, first and always, and deliver outstanding hospitality. And here in Buenos Aires, we have an opportunity to do that.

As I grew up in hospitality, people used to say that the three factors for any successful hotel are location, location, location. Then it became the three factors for success in hotels are activation, activation, activation. I would argue that today it’s collaboration, collaboration and collaboration. When I was growing up my mother used to always say to me, “You can judge a man by the company that he keeps.” And for a company like ours, the relationship that we have with the ownership of the hotels we’ll be managing is everything. And here in Buenos Aires, I couldn’t be prouder to be setting out on a journey of co-creation. And I use that expression deliberately, with (GNV Group President) Alejandro Ginevra, his family, and what we’re doing here. The days of a hotel management company saying to an owner, “Tell you what, you put the money into the bricks and the mortar, build the structure, and we’ll take it from there” … They’re gone. People build hotels and have an emotional connection to the investment they’re making as much as a commercial connection. And we want to be partners and collaborators on that journey.

Nobody knows more about the destination of Buenos Aires than Alejandro and his family. I had dinner with the family the night before last, and it was extraordinary. Here we have Alejandro, who has proven a successful, dynamic leader here in Buenos Aires, with his wife, who understands more about the real estate market than anybody I’ve met; with his son, who’s working in the business and who is a brilliant representative of the highly educated, highly intelligent, highly articulate, next generation of leaders that are emerging, and very representative of the consumer who will be coming to, staying at, eating at, partying in Viceroy’s Buenos Aires. His daughter is studying interior design — everybody has something to offer to the journey of creation for this extraordinary hotel that we’re on. I’m learning in every conversation that I have when I’m here.

So the collaboration that we have with our owners here is going to create this amazing hospitality experience in Puerto Madero. And the entire development is visionary. The connectivity of the infrastructure is wonderful and I can’t wait for it to open. And then building on that throughout the region, we also have a project in Bocas del Toro in Panama, again, with a family who owned that land. Incredible. 180 keys, 42 of which will be overwater villa product. A little bit like the Maldives or Bora Bora. And we’re converting a 15th-century former monastery in the old town of Cartagena over in Obra Pía.

So you just take those three projects, and there’s the individuality and consistent individuality. There’s a new build in Buenos Aires 2.0 in that entire master plan development that’s happening there with amazing owners and people. A monastery conversion where part of what we’ve had to do is to respectfully handle, remove and deal with the remains of a saint who’s buried on the property. And in Bocas del Toro, we’re creating something that has never been seen in this geography before by having overwater villa product. So individuality abounds. But for my first time spending significant time in Buenos Aires for understanding the project that we have with Alejandro and his family, to see what Carlos Ott is doing in the architectural direction for it.

One of my other least-favorite words is “game changing” because I think it’s so overused. And as an Irishman living in America I hear it all the time: “Oh my God these French fries are game-changers.” No, they’re French fries. Seriously? But Viceroy Buenos Aires is game-changing for Viceroy.

Ricca: It’s a great note to end on. You have a lot to look forward to in this region, in this city in particular. Before we end up, I would love the opportunity to get at least one audience question in.

Audience member: Well thank you so much, first of all, for your exposition. I appreciate it very much … listening to a good person who’s really involved and concerned with good hotels.
My question is referring to something you said way at the beginning of your talk. You were telling about the difference between service and hospitality. I like very much that concept because I believe hospitality does not mean making the visitor feel at home, but rather giving him or her a new experience, the pleasure of experience and maybe something that will make him or her come back. I would like you to expand a little more on what is your concept of hospitality, if you can.

Walshe: Thank you very much. Put quite simply, I think one of the greatest luxuries is being surrounded by people who give a damn. Hospitality is when they care about why they’re doing what they’re doing and not just going through robotic interactions. I’ve had two breakfasts here in Buenos Aires. I had a breakfast meeting yesterday morning at—and I won’t name it—but what would be considered one of the leading five-star, super luxury product offerings in the city. And I had breakfast this morning here at the Hilton, which is a great, but different style of hotel, a convention hotel. And you would imagine that I would have been sitting in this morning’s breakfast wishing I was at yesterday’s breakfast. This morning’s breakfast blew yesterday away. Why? Because there are two guys who work in the lounge of the eighth floor of this hotel, and they run that lounge like it is their own. They care and you can see that that hospitality is exuding from every pore. The manner that I saw them interacting with the other customers. Couple of requests that I had and the manner they dealt with it. That, for me, was hospitality. Hospitality is not related to the amount of stars that appear on the outside of your building. Hospitality is humanity. And if we can recruit and retain people, give them the confidence to proudly display their individuality and their interaction with our guests, you’re seven-star.

Audience member: Maybe that has to do then with this new concept that you mentioned, this collaboration, collaboration, collaboration.

Walshe: Yeah and the other words, and we haven’t used them today. Thank you for the shout out for the TED Talk. (On the TED Talk) is a word that I’ve coined, which is combining pride and ideology and quite simply calling it “pride-ology.” And I know I’m getting a little bit … it sounds like Scientology, but it’s not. But it is about having a profound set of beliefs that mean something in an interaction between two people. And ultimately, look, we have one of the oldest industries in existence.

I once wrote an MBA thesis on revenue management. And we all talk about revenue management as being a new discipline. It’s not a new discipline. In one of the oldest books in the world it starts with a story of a kid born in a stable. Why? Because he got booked out. Right? Think about it. Revenue management has been around for a very long time. Hospitality arose out of people opening the doors to their private homes to keep travelers going from point A to point B on foot. Safe, nourished and warm. That fundamental obligation has not changed. We as hospitality professionals keep people safe, nourished and warm. We just do it in a very cool way.

Ricca: That’s a great note to end on. Please join me in thanking Bill Walshe.

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