Show notes from Episode #170 of the Sweaty Startup Podcast.
You can enter the US and go through customs just by using a kiosk, you donít even need to speak to anybody. But when checking into a hotel you need to talk to a person, give them your credit card and ID, check in, and get the room key all before you can get to your room and drop off your luggage.
AirBnBís have had seamless check-in too, either through passcodes, lockboxes, or key locations. Why not hotels?
When Nick started Storage Squad, he saved a tremendous amount of money every year by automating the access point to storage units and not needing to pay for management on site. Why hasnít anybody done this with hotels?
Get rid of a front desk operator and you can automate check-ins for every guest. Youíll save money and theyíll love the experience. Most hotel operators are old school, they romanticize the hospitality experience, but they donít realize that this isnít what customers want.
If you see the opportunity here, go work for a hotel for a year. Learn the ins and outs of how a hotel operates, its systems, its business model, and then find people with money that will let you buy a hotel and completely automate the check-in process.
You could save $120k in payroll every year through this one simple change. This is exactly what Nick did with self-storage, and it saves him $60k per year at 7 different locations.
Real estate is incredibly powerful, and can create vast amounts of wealth. While service businesses can only sell for around 2X profit, real estate businesses go up to 5X or 7X annual profit in value. You can make the gain on real estate, get tax breaks for owning land, and refinance the location based on the new property values.
If you can save $120k a year over the average hotel owner, youíll get higher returns than the average owner. Youíll be able to pay off your loan quicker, and youíll be able to find profit quicker. Donít be afraid to optimize archaic businesses, because the first person to do so will become a wealthy man.