Welcome back to the Hostel Road Trip podcast.
Just super excited to be here with a gem of a hostel here, the Houza Hostels with Michael
and Nathan, the founders.
And we are just excited to hear about the emerging market in Hawaii in general and just
a beautiful story as I always are of how the hostel started.
I'm here live from Hermosa Beach, LA at the ICHLA Beach Hostel.
I'm with my co-founder Bob Dyer, who's down in the Salulita, Mexico area and our amazing
hostel down there.
Now, Michael, where are you right now?
We're both in Maui.
Both in Maui.
That's why they're looking very relaxed, shoulders dropped, smiles on.
Yeah, this morning.
Yeah, great.
Yeah, we're all looking at the ocean.
That's why we have a smile on.
Beautiful stuff.
Now, I have a bunch of questions, but curious, the name right off of that, how did Houza
Hostels become the name?
I'll name this opportunity.
Yeah.
Okay.
Nate came up with the name, so go ahead, Nate.
You kick it off here, Nate.
Well, in my previous career, I did morning meetings and every single meeting started
with a, how's it?
And how's it here in Hawaii?
I've been here since I've been 19, so almost 30 years now.
But how's it just, it's the all encompassing word that says, yeah, it says, Aloha, how
you doing?
What's going on?
It's the greeting, right?
It's how's it?
Instead of saying, how's it going?
They break it down to just how's it.
And yeah, so it's the way that we greet each other here in Hawaii.
I didn't know that.
Well, you learn something new in every episode, I'll tell you.
It shows that I need to spend more time out there.
Absolutely.
If you look at our logo, though, we incorporated, so the Shaka kind of goes hand in hand with
the how's it, right?
So if anyone looks up our logo, how's it Hostels?
It's got a little Easter, what do you call it?
Easter egg in there with the HH and the Shaka.
Okay.
And then another thing I've always felt that, you know, hostel owners are usually eccentric
people, interesting people, and the journey of how they got to the point of starting a
hostel and going on that adventure is usually very unique and filled with great adventures.
So each of you, if you would take the time to let the listeners know, how did you first
get exposed to hostels?
And then when was it in that exposure that you had this like moment of lightning in a
bottle like, I want to do this, I want to open up one of these.
I'll let you start with this one, Mike.
Michael, you kick it off.
Yeah.
So listen, I'll just be honest, we're not your typical hostel owners from that perspective,
you know, okay, we're pretty ordinary, right?
But we appreciate people, we appreciate the human spirit.
I did travel in hostels when I was when I was younger.
I can't say that I, you know, in recent years have stayed in hostels.
But we just we came across an opportunity here.
It was, you know, advertisers, there's a property for sale.
And, you know, it was it was operating as a hostel.
And so we were reviewing like, huh, that's interesting.
Like, what is that about?
And so, you know, actually, Nathan is Nathan, have you ever even stayed in a hostel?
I recognize about two years into our journey, I had a flashback that when I was traveling
as a part of a youth group in Europe that I was one of the ones that didn't get put
into a host family.
And now I remember I was like, oh, my gosh, I did stay in a hostel.
I have stayed in a hostel.
But it took you buried that nightmare.
No, it was it was not a nightmare at all.
But I was joking.
But yeah, it was.
Yeah, we I really I have had zero hostel experience.
In fact, I came to, you know, came to Maui when I was 19
and then just kind of started on the entrepreneurial just grind of of of making it.
And so I'm I'm actually getting to now live vicariously through, you know, the recognition
of everything that I missed as somebody that that worked really hard from a young age to
to make it and to provide I missed.
And so I think that I have a unique perspective in in watching what we what we've been creating
that in this community, it's like, you know, the things that when you look back on life
that you regret.
Well, some of those things for me are being lived through through other people and we're
providing now so so that they get the opportunity to to stack these experiences that are so
so meaningful.
Yeah, I really like that.
And I saw that on your website that you provide the free activities.
And that's so important of what a hostel really is, is bringing people together, giving people
the space, the platform to get to know each other, spark up relationships, take adventures
together, have experience together, fall in love.
Yeah, it's such a beautiful thing when it's done right.
And I was telling someone the other day, I look at it like more of an art form more and
more as the years go on or a craft or a skill, you know, and you're always trying to polish
that and get a little better at that and work your skills at it.
And it's very fulfilling to see it when it does work the way it's supposed to.
But I also think it's really cool that you guys got into this in the way you did, because
everything's usually we don't hear from people that got into it down the road after not having
a life changing experience in it when they're younger.
So I think it shows to the testament of the business model that it is a solid business
model, especially if you can purchase the real estate without question.
And I'll let Mike actually finish what he was saying, because it is interesting.
We were actually going through and we had decided to partner.
We'd been colleagues for 10 years and we were going to go and purchase apartment buildings.
And that's really how the journey started is we were looking at an apartment building,
but I'll let Mike kind of finish out where we what ended up happening and how we got to
our purchase.
You know, so yeah, I'll complete that thought.
But I do have to just take a minute and give a shout out to you guys, because look,
I know there's a lot of jobs that have just dropped like, what?
These guys don't even know anything about hostels or whatever.
They're you know, they're not coming from a hostile background, which is totally
acceptable and understandable and valid.
But I will say I started look, I've been a long time listener, first time guest of this podcast.
And I thank you guys props because you introduced us really to a lot of the nuances of what
actually goes on in hostels.
Right.
I mean, I have a little bit of experience, but what you guys have done in the past with
your original podcast, now the revamped one, it's been really instrumental for us to learn.
And look, we are we are learning as we're doing.
So by no means are we experts.
We've done a lot of things right.
But we appreciate that this hostile community, I mean, it's fantastic.
And people like yourselves that are out there sharing just big props to you guys.
Really appreciate it.
That's so kind to hear.
Thank you so much.
It touches in a great spot because a big objective of like the the genesis of the
podcast idea was, you know, when you were getting into hostels, just like we were like,
where's the resources?
Like, where can I find out more info on this?
And there was like an outdated website and an outdated book.
And that was it.
And we were like, gosh, there's not any resources for maybe someone that wants to get into this
industry or is going through the process of opening one up and needs to hear the struggles
of others to motivate them, inspire them, find them the path.
So I'm so happy that that was utilized in that purpose for you guys and giving you some
insight and awareness to the industry and exposure.
So awesome.
Thank you for those kind words.
Well, and it started with listening to the podcast, but then it translated to, you know,
when we were starting and looking at some of the more technical aspects and I mean,
from looking at we wanted to look at because we aspire to grow.
And so we wanted to look at other companies that were growing and doing it right.
And so from the very beginning, we really looked from just looking at your website
messaging, we were like, wow, this is the type of company that we want to be.
So from the very beginning, we really have looked up to your guys's journey for sure.
Oh, that's awesome to hear.
Very kind words.
But Bob's all the reasoning behind that website.
I call him the Don Draper of the hostile industry.
Yeah, you got a fantastic website, but also like Nathan said, I'll piggyback, you know,
the messaging, the culture that you guys are creating.
You know, we have volunteers that work at our space and man, darn it.
You guys, you're the only hostile we've ever heard of where people are like,
hey, you guys are great and all, but we want to go back to I.T.H.
From Hawaii?
Oh, man.
That's where everyone that's here.
The only place we lose people to is Hawaii.
It's like the white whale of the industry, but we'll keep we'll send them your way for sure,
because what a great shop you got going on over there.
Well, we were out and we recognize right away that from from volunteers, you know,
it's a great, great way to learn.
It's one of the things that we do is we interview volunteers, especially as non-hostile people.
And we get to to really sit down and we have surveys that we created with volunteers to
learn, all right, how do they do it?
And the ones that came from you guys, we've gotten unbelievable feedback.
So in growing the business, it's a it is a great way for new hostile owners that
if somebody's just getting started, it's a great way.
Listen and learn to the people that have have experience in other places.
Great point.
Absolutely.
How about so how about purchasing the property to walk us through that,
how that went once you guys found the found the the hostile?
Yeah, so OK, we'll hop back.
We got off track a little bit.
But basically, yeah, look, we were Nathan and I, we have a passion for real estate.
You know, we're we're business savvy.
We figured, look, let's let's put our heads together.
Let's figure something out.
And we were looking at buying apartment buildings and living in Maui.
It just became kind of logistically challenging, especially since like you, Bobby,
you know, I've got I've got two young kids.
You've got one on the way and and you know, when you've already gotten so you can relate.
But coming from Hawaii, I was like, oh, man, I just don't see myself flying out to Cincinnati,
Ohio, to try to inspect some apartment building.
So what do we have here locally?
So we started looking around what was for sale.
And that's where we came across this building that was it was an apartment building and
it was formerly operating as a hostile.
And so it inspired us.
And we thought, huh, what is this hostile business?
Let's look into this.
And then obviously living here in Hawaii, there's tremendous demand.
Tourism is a huge part of our economy.
So we figured, well, why couldn't we open up a hostile?
And so we started looking into various zoning regulations and what was required and, you
know, the opportunity to to do so.
And we found a property.
This is a separate property than what we ultimately operate now as a hostile.
But our original goal was to convert a property that was that had the proper zoning at the time
to be converted into a hostile.
So we bought a commercial building and we went through that process.
We we we bought it.
The agent was I'm not going to say his name, but he was like it was crazy.
He was like the guy from Better Call Saul.
Like if you've ever seen that show or heard of Breaking Bad and then the spin on.
Oh, my gosh, this guy was it was wild.
It was uncanny how his voice sounded just like him.
And we never actually even met him in person, to be honest.
But we had conversations with him on the phone.
And man, it was why he spun this thing a whole different bunch of ways.
But it was it was it was Saul Goodman.
So we bought a building with Saul Goodman as our agent.
Mike fired him, by the way, but we still paid him.
Yeah, yeah, I actually fired him.
I said, look, we're going to purchase this and we're going to pay you.
But we just have one condition.
We don't want you to represent us anymore.
And ever again, I never want to see you again.
Saul Goodman was up to his tricks.
And we so we had to pivot.
But look, I digress.
We bought this commercial building and then boom, COVID hits.
Right. Oh, my.
We're a prior to COVID.
Actually, we had gone through the process of obtaining the correct permitting.
And it's a it's a it's a journey.
You know, it's a at least 18 month journey.
And so in the midst of, you know, planning for that and we had hired engineers
and architects and all the stuff that you need to do, COVID hits.
And it just completely spun out our, you know, our business plan
because everything was on halt from a lending perspective.
So we just had it was a waiting game for a little bit there.
And then, you know, unfortunately, due to some circumstances locally here
in Maui related to housing and such, the county actually changed the zoning.
They changed the zoning for their property that we had.
And so I guess we can't do a hostile on that building now.
And so that's when we decided, well, that's OK.
You know, we'll take that on the chin.
We'll keep going.
And because it was COVID, we thought, well, maybe there's a hostile owner
that is interested in selling.
So we literally started door knocking.
We would we went to the few hostels that are available
and we started knocking on doors and asking.
And sure, sure enough, we found somebody that says, you know what?
Yeah, I'm ready.
You know, the world is ending and there's too much uncertainty.
I've been doing this a while.
And he said, you know, I'm out.
I'll sell it to you guys.
Let's do this.
Shared accommodations in the middle of the pandemic was probably not
not the vision that most people said, this is what you should jump into.
It's the worst bottle for it.
Right. And you're and your main clientele is international.
I was like, this is really the worst.
You know, yeah.
But hey, we believed in it and we believed in the vision without any experience,
not knowing and knew that, look, we, you know, there's an opportunity here
because there's everything shut down to potentially go and grab an opportunity.
And that's what we ended up securing.
Now, were you guys, would you say, you know, we often refer to it as ultimate host,
but did you guys see yourselves as being involved in the hostel and be like,
I know how to show people a good time in Maui.
This will be a fun project to be involved.
Or were you guys in the mindset of like, bought this hostel.
Now we got to find a manager and kind of give them what they need to do to run the hostel.
What was your position there?
Okay. So I'd say because our goal is to grow, we always knew that our highest and best use
is not working in the business.
It's really working on the business.
But we also knew that we needed we were going to need a team.
And the reason that we're where we are, the reason that we, you know,
received the Oscar that we did all of that really came from us making the right decisions
in the people that we put in place.
And I'd say one of our skills that we have is the ability to lead.
We've, you know, our careers have been built a little bit in leadership.
So to be able to lead a team and know ultimately what we were trying to accomplish,
putting them in place so that we could continue to work on the business
has been a key in our success.
Nice. James, you have something for that?
Well, I do have, but I wanted to make 2024 the winners of the best small hostel in North America.
Correct?
Correct.
Huge. So just applause there.
Thank you.
You know, all Canada, all US, all Mexico, and, you know, just into the business.
Yeah, that's very impressive, you know, to see how quickly you honed in on things,
dialed them in.
That's a hard award to win.
I do wish they gave us a trophy, like a little gold trophy.
That would be nice for the fire mantle.
It would be, right?
At least a clap for the door for reception.
Come on.
You get a little sticker, you're like, man, where's my little gold trophy
that I want to show mom?
So true.
So maybe you could help me with that.
I've been bothering them about that for a few years now.
But I did have one question I wanted to dive back into, back up.
Since you have experience in this, and I think that this is so important for anyone getting
into hostels and listeners, the ability to purchase the real estate not only changes
your margins, it changes the journey.
You control your destiny.
You know, everything changes compared to a commercial trip in that lease where the better
you do and the longer you stay, the more expensive it's getting.
You know, your margins are getting squeezed and then you might just get pushed out.
You might have a great operation, top rated business.
You might have a great operation, top rated making money.
But this guy decides he's going to level the block and build up.
They're watching your success.
Yes.
It's success tax, right?
The more successful you are, they see it.
They know now you're needed.
And that's great advice on a side point there.
If you do have a landlord and you earn a triple net lease, you're never doing good.
Always look bad.
You know, look broke.
But if you would give us some insight into, if you wouldn't mind, you know, just so listeners
can understand that it is possible to like real estate financing for a hostel.
A lot of times the perception is it's not possible, but how was your experience or your
journey within that that allowed you to be the owner of the property?
Yeah, look, so we went through some unprecedented times.
I think, you know, between COVID and then, you know, we experienced there was a little
blip there where there was a bit of a banking crisis, right?
Where we were looking to refinance.
So, you know, right now, these are not the best times for financing across the board,
all real estate assets.
However, it is possible and it is possible.
Particularly, we found that with SBA, SBA loans.
Cool. Yeah, there's opportunity.
And Nathan, you can attest to this a little more if you want to add.
Well, I'll go back.
So if we back up in the beginning, we were able to negotiate seller financing for both
of our purchases.
Awesome.
Great, great topic, great area.
Please go in more.
Yeah, so that was a big part.
And one of the things that, look, every situation is going to be different, but there are some
situations where when you find a hostel owner that's been passionate about hostels, has
provided a great experience, but they're just, you know, they've been in the business for
a long time and they're done and they're ready to move on.
I think one of the, they've been so involved in running a hostel that one of the questions
that they do have with is, well, okay, if I sell my hostel, what am I going to do?
Like, where am I going to get my money?
I've been generating.
And so, you know, it just so happens that both of the owners of the hostels that we
purchased were in similar stages in their life where they were ready to move on.
But to be able to say, well, look, I can move on from the hostel, but I can still make an
incredible income by financing this.
We were able to really move things around for both of us and create win-win situations.
So that's the first part of it.
And then the second part of it is the SBA is pretty unbelievable in what they'll do,
especially once you have an established business.
So the opportunity to grow is something that the SBA supports, like significantly.
So they're not going to be the one that you go to for a cash out refi, but they're the
one that when you have another opportunity to expand that they're going to allow for
a very unique leverage set.
And they're also very good with the opportunity to secure working capital loans.
So the SBA has been, as we are growing and positioning ourselves for growth, the SBA
has basically been provided terms to purchase other hostels with the SBA at 85% loan to
value ratios.
So and look, there's a first bank, but if a first bank goes and they look at, okay,
well, if we have the SBA that's siding with us and we get to take the first position at
50% and they're looking at a property in Hawaii, or if they're looking at a property in Los
Angeles or San Diego or wherever it is where it's a high demand piece of real estate, for
them to go to a 50% leverage mark in this market is pretty comforting for them because
they're in the first position.
And the SBA is set up to help support small business growth.
And so SBA takes a second position and they're very favorable in their rates.
So as a proven operator, and especially as we've grown and grown our equity, cross
collateralization, all of those things start to come into play.
But I think to go back to your first question of people that are considering purchasing
a hostel for the first time, I really believe it's just about, it really is about
the specific opportunity that's in front of you.
And then once you find the opportunity, don't let the financing be the thing that stops
you from doing it, because it doesn't matter whether it's private money or whether it's
hard money or whether it's finding a partner, somebody that may be more experienced than
you that will partner and their success, you can align with, there's opportunities.
So never let that be the thing that stops you if this is a route that you want to go.
But it is a hurdle that all of us have to face.
Absolutely.
Yeah, we did the seller financing, we did that for a couple of our properties, and it
was the same way it gave us access to get ownership getting started.
So how about you guys open?
What day did you guys open?
And what was the, we always like to say the first 100 days are so important to set the
tone of the building.
What was your guys first 100 days like?
We'll give that one a try.
Yeah, so like tell us about it Mike.
April 21st, 2021, we opened and we had zero hostile experience.
We had no idea what we were getting into.
For whatever reason, the seller, he didn't provide us any of the information on what
the upcoming reservations were.
And so we were kind of blind.
We're like, okay, well, we're buying this thing and we're going to just take over on
this date and we have no idea how many people are showing up.
So day one, we're going to get the books, but until then it's like, okay, what's going
to happen?
Now, I will say two things were going on.
Number one, there was this surge of demand that was occurring because it was towards,
although COVID was still going on, we started to see that there was a little bit of a surge
of demand.
So it hadn't quite just hit yet, but we're starting to see some of that and we anticipated
that and so we did go out and we said, look, we don't know what we're doing.
So let's go and hire someone that does.
And we actually hired a professional consultant.
Shout out to Lior Slepkov.
Is that how you say his name, Nathan?
I don't know, but it's Lior.
I just know him as our good friend, Lior.
A consultant for the hostel.
Okay.
Yeah.
So he's the hostel consultant.
He's awesome.
We could give you the contact info and you can put in the show notes or whatever, but
Lior said, look, he's in Europe.
He was in Spain.
He's a Canadian guy and he was living in Spain and we reached out to him because of his website
and we had a few phone consultations and he said, look, if you guys need me, I'll fly
out there.
I'll help you.
I'll run the front desk.
I'll help manage.
I'll do whatever you guys need.
So we're like, sweet.
So Lior was our savior.
He flew out and man, we couldn't have done it.
Yeah.
So he was there from day one and prior to opening, we, you know, we were interviewing
folks.
So we had, we had a little bit of a core staff that was there.
None of us knew what to do or what to expect, but you know, it was like, I say it's like
drinking water out of a fire hose.
We're like, look, we're just going to learn by doing, we're just going to have to go through
this and it might be a little bit painful at first, but we'll get through it.
And there definitely were some pain points.
We had a lot that occurred that first year.
Holy crap.
But, but we've grown.
I mean, that's how, look, we, we, Nathan said, you guys acknowledge we, we ended up
going from that moment and in three years, you know, winning a Oscar for the best hostel
in North America.
So, you know, it's been great.
But when you said a hundred days, the reason that we reacted the way that, that we did
was because we had, we had storms come through.
We had a massive deferred maintenance.
That is the one, one of the things that when you're purchasing an older hostel from that's
just been more of a backpacker hostel, that money typically isn't going into capital expenditures.
There's not a budget and a plan.
And, you know, so you're purchasing a site that's probably got some challenges and issues
and we sure did hear.
And so the roof was, was, was leaking and it was leaking so badly.
We had buckets everywhere up in the rafters, but man, we started missing spots.
We couldn't catch them fast enough.
And in the middle of the night, the, our ceiling collapsed, people left.
They went and stayed somewhere else.
Oh, wow.
And, and then, and then a week later, so we finally get through this, you know, just like,
Oh my gosh, what the heck is, how do we get through this?
What is the end of the world is happening?
What do we get ourselves into?
The next, the next week, all of a sudden there was an area of the, of this building that
had kind of been shut down for storage.
But there was an old restroom in there.
And we learned that it was actually the lowest point of the three neighboring properties.
And so there was a, there was a sewage clog, almost at the front of the main line where
they all connect.
And little did we know, but for like 12 hours, three buildings worth of sewage had been piling
into our, our basement.
And so we had to shut down.
It was so crazy.
We had to shut down all of our, all of our water toilets.
We had to, we had to, we brought in porta potties and put them in the alley.
So people were using them.
Well, look, you know, the coolest thing about the hostel community is truly, we learned
right then that we were all in it together.
Like our guests were in it with us and they saw everything that we could, that we cared
about them most.
And we were, you know, we did, we went and got lighting and we went and got porta potties
and we went and did, we did absolutely everything that we could.
And then sure enough, all you needed was one little common space where everybody could get
together and laugh and be dry and hang out.
And that's where we learned like, this is, this is special.
This is a unique, special community.
Yeah.
You're not going to get that at the Rift Culturing with those guests.
Yeah.
What other, what other business do you feel your customers, they'll pick up the hammer,
they'll start painting with you, start repairing stuff with you just to, because they enjoy
the community.
Truth.
Yeah.
How about when you guys were starting?
Like is there much, do you have much local competition or how did you guys want to be
different or be, you know, provide something unique to the travelers?
I'll let you take that one, Mike.
Yeah.
So, you know, you guys mentioned this in the beginning, we offer free activities and when
we bought the hostel, that was not something that was, that was in operation.
And we knew that in order to stay competitive, the other two hostels that do extremely well,
they had that in place.
And so we're like, look, we got to figure it out.
We got to figure out how much personnel, what the insurance is, what the right protocol
with, you know, the regulations kind of regular, let's do, let's figure out how to offer tours.
And like I said, we offer them completely free.
So once we got that infrastructure in place, I feel like we became a lot more competitive.
But we also recognize too, look, we had a lot of imperfections with the property and
there wasn't a lot that we could do about it.
Initially, we knew that we had extremely high standards and we had goals to go and make
improvements and create an amazing common area.
And if you go and look at our website or see any of the photos online or in hostel or whatever,
you're going to see it's incredible now.
But at the time when we first bought it, it was a complete dump.
No offense to the previous owner, but it needed a lot of work.
And what we constantly told our staff is, look, if we just have an absolute passion for the
guest experience, if we just obsess over the guest experience in terms of customer service,
they're going to overlook a lot of the imperfections.
And we just ingrain that into them.
Just make sure everyone is feeling like they're connected.
If someone is by themselves, reach out to them, talk to them, make sure everyone feels
welcome.
And all the things that are not in our control, there's not much we can do about it.
But what we can focus on is the things that are in our control, offering activities, island
excursions, but also on-site activities where people can get together and socialize.
And look, not coming from a background in hostels, this was somewhat new to us.
So we had to figure out as we went, we tried some things that worked and some things that
didn't work.
Trivia and I might not have been a hit every time.
So like, OK, let's pivot, let's do something else.
But we just found that being 100% committed to the guest experience and making that just
the benchmark of who we are, it's really paid dividends.
And now, besides that, now we do have over time, we've improved our common space and
all that stuff comes secondary to being obsessed with the guest experience.
Nice.
Yeah, we always say connecting with the guests there and we always like to shake their hand,
introduce ourselves, get on a first name basis right at the start.
And that creates that connection so people can enjoy each other and they're less likely
to maybe comment on some of the faults of the facilities.
Because it isn't always an ever improving sculpture, art piece, as James said, a year
from now, it's going to be different than it was today.
And you're going to look back and say, what was it like a year ago?
I can't believe how it looks.
So James, you're going to add something?
Well, just on the activities, I love what you said about try stuff out.
Don't be afraid to try stuff.
And that's so important to embrace.
You're going to have some activities that flop.
The bar that used to have the great live music for five years is going to fizzle out and
then you're going to have to find some renewal.
In the process of going to that music bar, you're going to see that there's a new axe
throwing place across the street that's rocking.
And now that's the new activity that night.
But if you stop trying, then find excuses why you should try or tell yourself, oh, the
guests aren't interested.
They're going to be interested if you give the effort and find the right spice for the
night.
But you definitely have to be willing to try, have to be willing to fail.
And it will continue evolving if you do put in the effort.
So that's a great point.
So important.
A hundred percent.
Yeah.
And then so that's awesome.
So what brought you?
You guys had success.
You obviously figured it out.
Tell us the next property.
How did you guys get into Hilo?
Right?
Yeah.
How did that come about?
And why did you guys pull the trigger there?
Well first of all, when we looked, we've kind of looked at the entire Hawaiian islands,
you know, our goal from the very beginning was to grow in Hawaii and then from Hawaii
grow on, you know, on the West coast.
And from there, we've since changed that to now we're willing to grow wherever.
Because we did prove that in opening a property on another island, it is just what's the difference?
There's sea between us no matter what.
So being able to do that remotely, it gave us a lot of confidence.
But what because there are limited opportunities in Hawaii, we basically put the put the work
in figured out just about any property that that would fit our criteria.
And we started we started traveling around traveling around the islands.
And we had a it was really funny because this this hostel that we purchased, we tried contacting
them three, four times and they never they never contact us back.
And we were going to look at a different property when we were over there.
And as we were driving through town, Mike said, Oh, there's that there's there's that
hostel that we we never called us back.
And he's like, should we stop in?
I'm like, heck yeah, let's do it.
And so we just went we went walking in just like we did.
You know, we're pounding the pavement knocking on doors that the bottom line is that's how
we've done it.
You pound the pavement knocking on the work in.
And but when we were in, actually in Hilo, and we walked up these big this big grand
staircase and we're looking around and we're just like, next right next door to it.
There's a kombucha bar and there's a indoor rock climbing place and there's like, oh,
cool, five bars and restaurants right like, like literally you can see from from the hostel
we're like, oh my gosh, there's ocean views from the windows and we're like, oh my gosh,
we just landed in hostile heaven.
So look, it was just happened to be one of the places on the list that that we we had
marked and the opportunity and knocking on doors that one presented itself.
So that was the next one.
Yeah.
Now in your in your expansions, have you ever thought of going international or just keeping
domestic?
I'm always curious of what people feel about that, you know, as it's something we've started
to play with and it's an interesting process.
But where are you guys on that?
Yeah, I mean, I won't speak for Mike, but I think that for myself, just having the comfort
right now, I don't feel like we're at the place of growth where expanding internationally,
it feels like it would be a distraction of learn too much learning of that.
We don't have a team big enough to handle that.
I feel like that's that's a key piece.
Like if you're going to go and grow internationally, there's a whole new set of rules, guidelines.
There's a whole new place you go.
That you've got to have expertise in.
And that steps outside the comfort zone.
Now, you know, if you have a team and you have that expertise that you can align with,
then you know, then it becomes, I guess, look, we'll never count anything out.
Sure.
Absolutely.
Yeah, we've learned a lot of that process ourselves now operating out of Mexico for
the last two years.
You know, a couple of the items we learned is obviously being a different country, you
know, creating the business in Mexico is completely or any country completely different than the
US.
So it's a whole new process and, you know, difficult to work through.
But then another big one that we learned was posting in another culture, like being in
the US being Americans.
We know how to host Americans.
We know how to be great.
You know, we know how to entertain Americans.
But then when you go to a new country, now, do you know how to be a great host of Mexicans?
Do you know how to host, you know, Costa Ricans, how Costa Ricans like to be hosted?
You know, so you really have to understand that.
And ultimately have a, you know, we've learned is have a managing partner who is from that
culture who can really gear up that project because, you know, the more places you get,
the more spread out you get, you know, if you don't have those managing partners, keeping
an eye on, you know, everything in the business, but most importantly, the variable costs,
you can just find yourself working for free or, you know, losing money.
Yeah, that is great advice.
I was going to add to it.
So we went through a similar process, how you pass through, you know, you pass through
the other hostel a few times before they called you back.
We've probably gone through 10 properties that we called and never heard anything from
for five years and most recently our mission beach hostel in San Diego, 10 years.
That was one of the first 10 years.
Ten years later, we saw a for rent sign on it and we almost crashed.
We were able to make the deal work.
But yeah, never, never give up when you on those kinds of ideas.
So absolutely.
Yeah.
Well, I love the fact that you guys look, you have the courage to go out there and just
try something right.
And, you know, similar to that, I mean, I'm a huge fan of just growing in personal development
and taking on new challenges.
And you mentioned, look, we're you got to go and you got to learn how to operate in
a foreign country.
And to that note, look, we're we're students of the game.
So if we don't know something, you know, we have the mindset that we'll go out and we'll
either partner with someone or we'll hire someone that does have the expertise to provide
that to us, whether it's a consultant like a hostile consultant or if it's a business
coach or if it's a social media marketer person that can give us some insight.
You know, because we just feel that there's so much to learn and so much to do that we
don't want to be limited based on what we already know.
And there's a bit of vulnerability going out and trying.
In that case with Mexico, I love Mexico.
And you guys are like, look, let's let's do it.
There's probably so much that you had to learn.
But I I can then the fact that you're like, why not?
Let's give it let's give it a shot.
And if it doesn't work out, then what what source of happens?
You know, we tried.
And so I'm a big fan.
I'm a believer that, you know, if you try something and it doesn't work, you just change
your approach and try again.
Yeah.
And you learn so much from when you do misstep, when you do fail, when you do have one that
doesn't work.
There's so much learning within that.
But you have to be willing to enter that vulnerable space.
You got to risk it for the biscuit and, you know, and then own it when they don't go right
so that you can take responsibility, process, learn from it.
And then, you know, you see that one down the road and you're like, well, I remember
this, you know, let's not take that road here.
Yeah.
So I think it's exciting when you look at life like that in general.
But any craft back to that thing, looking at it like a craft, looking at it like an
art, you know, always learning, always looking at it.
That's why I love like the hostile conferences.
And it's so great to get together with people who are doing the same craft and working on
it and trying to make it better and hearing and sharing ideas.
It's just when you have that outlook for all listeners out there looking to start a hostile
or in the process of doing it, these two gentlemen have the exact attitude that you want to have
and outlook, you know, because that's what keeps you going.
That's what keeps you excited, keeps you engaged.
And you have to be willing to take those chances and be vulnerable for sure.
Yeah.
I mean, I love being at that conference and connecting with people.
And there were a couple of opportunities where people are asking me questions and it really
it caused me to reflect a little bit.
And what I found is that when you can go and in a sense, coach someone or teach someone,
that's when you really that you are forced to really recognize like, OK, what am I doing
right or wrong?
And that's such a powerful tool.
It's not just the one way where, you know, if we were to give someone a tip on something
that they're gaining, we're also gaining.
So the sharing culture of the hostile community.
But, you know, we were a little uncertain at first, like, OK, how does this work?
Like, we got this business and should we be a little bit guarded about like what our business
model is?
How do we, you know, what do we share?
What are we not sharing?
What I found, I told Nathan is like, look, we're what we're doing.
We're not we're not inventing something.
We're recreating something to be our own.
And the more that we share, you know, the way that you pay it forward, it'll come right
back to us.
And I found out I love just by teaching, we learn so much more.
So it's reciprocal.
Yeah, I love that outlook.
Amen to that brother.
Now, what about in your destinations?
What are like the top experiences when you like in the area, you know, like every location's
a little different.
Like what goes down at your places that's like, oh, you got to do this.
I mean, we're fortunate, right?
I mean, Maui is one of the most majestic places on the planet, on the island of Hawaii.
You know, Hawaii has got volcanoes and majestic waterfalls.
So it's like we're you know, we're blessed in that regard that we just kind of show people
around.
It's just the outdoor adventures galore.
Yeah, I mean, when we look at though, if you take that into the actual like experience
of the guest, there's maybe a lot of our guests, they wouldn't be able to do if they were to
do a tour to the road to Hana.
It's 220 bucks a person.
Like I don't know how many of our guests would have that experience in their life, where
they have a tour guide that knows the place that's going to take them to the sickest views,
the best places, the best stops along the way that that you would pay $220 for.
I mean, that's and and they get it for free.
So and with other people and they get it with other people.
Yeah, $200 alone.
Yeah.
And the coolest thing about it is it's like, look, as many people fit in in the the the
van fit in the van and then, you know, three other people that have a car, people pile
in the car and it's the caravan and they go out and our road to Hana is just it's this.
It's an epic experience for them that you know, it's it's truly searing experiences
into people's minds that they'll they'll carry with them forever.
So we are very fortunate that there's there's several of those that we get to do, whether
it's, you know, chasing waterfalls on the island of Hawaii, right?
That's, you know, they go and they go from waterfall to waterfall to waterfall to waterfall
along some of the most beautiful coastlines that exist and whether it's getting in the
water and going out for a day of snorkeling and then doing a stop on the way back and
getting shave ice.
You know, there's just we're we're fortunate here that we have we don't have to get that
creative on what people want to do.
Yeah, that's amazing.
Yeah, that's beautiful.
Now, you know what?
I will say, can I just add to that real quick?
Yeah, please, please.
What we found, too, is with the hostile community, it's not just about like, hey, what what
what can I do for myself?
We found that especially during right after the fires, we felt that there was this overwhelming
sense where where folks were coming to Maui to contribute.
And it was incredible that we offered where we would do like volunteer days where people
that are guests would join together, we would provide the transportation and they would
go to, you know, different disaster recovery zones, you know, areas where they could, you
know, help provide just volunteer work to help support the community.
And it was incredible to watch like we would have a loaded van full of people that are
here on their vacation wanting to go and contribute.
And what we found is it's it doesn't just have to be a disaster for that to occur.
We found that on a regular basis, we're still offering community outreach where not every
day is like, hey, we're taking you snorkeling.
We're taking you to the road to Hana.
And you know, it's all about you.
We found that this this community of hostile goers, it's incredible.
They want to go and they actually want to go to a local place where it's they can, you
know, help clean up the invasive species.
Native.
Yeah.
Native lands, native protected forces, one of the activities that they offer right now.
And they literally go and contribute, pull weeds, work.
So yeah, Mike, that's a really that's that's a we thought it was about the disaster.
It wasn't about the disaster is about the human spirit, spirit wanting to give back
in the hostile community is just lined with people that want to give.
So that's that is a good point, Mike.
Yeah.
And it's great energy to be around, you know, when you spend time around that, it's a great
benefit of working in this business.
You get to be around that positive energy and it's contagious, you know, and it fills
one spirit.
So I'm glad that you guys have found that as well and have brought this quality hostile
revolution going on to Hawaii as for a long time while he was known as having not that
many hostels and the ones that were there weren't run well because they knew they had
everything.
You know, there wasn't much competition.
So we were really excited to see you guys get started and start to win some awards because
how are the hostels out there not winning awards?
It's so amazing.
You're in Hawaii.
So just really inspiring to see that you guys have gotten in from outside the industry and
gotten it so well, so quick and inspiring story to a lot of other people out there who
don't exactly have to have this long hostile history to jump into the game.
So I think that's really inspiring for a lot of potential people out there in closing any
tips thoughts, inspiring words for aspiring hostile owners or people that are currently
in the battle of opening up theirs.
Mike just dive in, you know, so many people look on the outside, like they want to do
it.
They talk about it.
They think about it.
I've said this now on this podcast a few times, but you just got to learn by doing.
You just got to jump in.
And the cool thing is you don't have to be perfect with a hostile.
Look, you said it's not it's not the Ritz-Carlton.
It's not the four seasons.
Sometimes you can go and you can make mistakes and maybe the guest experience isn't perfect.
But we found that the guests are very forgiving and they're just great folks.
So, you know, just just get started.
Yeah, we got two things that we constantly say.
And we've said it all along.
Like in the when we were doing the apartment building, I remember the first day that we
had the call with this real estate agent that got us pumped and ended up getting us into
the business.
But we walked out of there and we're like, yes, we just had an appointment.
That's it.
We just had an appointment to go look at a place and we're like, yes, like, yeah, you
know, like that's something that we constantly say is just get in the game.
Once you get in the game, it's crazy what's going to happen.
This stuff happens.
It's not going to stop.
Once you commit and actually take action.
So if you're someone that's on the fence and you're like, should I do this?
There's too much.
There's all this learning.
I got to be prepared.
No, we weren't prepared.
It doesn't matter.
Get in the game and things are going to work out.
And then the second thing that I would say to that that we're constantly saying we are
not the creators.
Right.
We believe very strongly that success leaves clues.
So just all you need to do is look at in today's world.
We could jump on in the beginning.
Years back, we could jump on your podcast and there were people out there that were
talking about hostels.
Right.
There were you can go and look at structures and go find a company that you're like, wow,
I'd like to do it that way.
I guarantee you that if you connect with them, they would love to share or, you know, whatever
it is.
So success leaves clues.
Get in the game and then you don't have to create it.
You really don't.
It's already exist.
Just follow the success.
Let it be a road.
Yeah.
Awesome.
Beautiful.
Fantastic words.
You know, I had an old hippie tell me a perfect hostel is imperfect.
And I was like, oh, that was very interesting.
Yeah.
Interesting concept of viewpoint.
Well, I will share with you this.
And if it doesn't work out a very wise man that we met at the North American Hostel Association
conference, this very wise man said, look, if all else fails and you don't make it, it's
all good.
Get a storage area because it's hostile in a box.
All right.
Michael and Nathan from the house of hostels.
Fantastic episode.
Great having you guys.
So excited to see what you do next.
Excited to come visit you out there.
You come visit us out here anytime.
And we look forward to our next episode Sin City Hostel in Las Vegas under new management.
Stay tuned for an exciting episode next week.
Thanks guys.
All right.
Awesome guys.
Great episode.