Asking your parents or siblings for $2,000 around the dinner table is generally a quick way to start an argument.
For Alex Kirkwood, Founder and CEO of the Kirkwood Collection, it kick started his family’s investment portfolio in boutique, luxury accomodations and he’s never looked back.
In today’s episode, Mark Kinsley solo interviews the hotelier investor about:
- his background (he’s a former marketing executive for 20th Century Fox);
- how he selects his destinations and buildings (hint: they all have historical connections, except one);
- changing the mindset on how to operate larger properties while ensuring the same level of exceptional service at smaller properties;
- why he doesn’t mess with hotel restaurants, and
- how he feels about hotel amenities and his requirements for those available at his properties (the mattress is a big one!)
FULL TRANSCRIPTION
Mark Kinsley: Welcome to the Dos Marcos Show. We are here at the B L L A event, a beautiful Thousand Oaks area, Westlake Village Inn, and I came across Alex Kirkwood with Kirkwood Collection and I wanted to talk to you for a variety of reasons.
Number one, you have amazing properties and you have an amazing backstory. So tell us about Kirkwood Collection first, and then I want our audience to hear your very, what I find to be a very inspiring story from what I know so far.
Alex Kirkwood: Uh, well, yeah, we started 10 years ago. Uh, five family members are on a dinner table and I raised $10,000, 2000 per member, mom, dad, sister, brother, myself, and, uh, had no idea what I was doing, but I, I said, I think we’re stronger together than we are apart, and if we pool our resources, small resources at that.
Uh, maybe we can one day invest in a piece of real estate together that we would otherwise not be able to do individually. And um, so that started and we started making little kind of monthly contributions like you would to a 401k and built up enough to buy a vacation rental and Rancho Mirage. Um, uh, where we, it now doubles as a second home to, in a sense, but it was our first taste of hospitality where we had, uh, 12 monthly guests.
You, you, the HOA wouldn’t allow for transient, nightly, um, occupancy, but we could do monthly reservations. I said, This is really cool. And the first thing I, I realized, Was, It’s interesting, the, the comp set has two, um, prices. They have seasoned an off season, one or two, and I was like, but you know, each month might have a different demand pattern than the next month.
And so I started, what I didn’t realize was called dynamic pricing at the time, and we did that. And so that worked out pretty well. Then we bought into a hotel with some partners. The family that inspired me to start the little family fund, they were in their second generation and um, they had done extremely.
A similar, similar story about 70 years ago with their, uh, grandparents. And uh, so we bought a hotel with them. We bought another vacation rental. And then when 2018 hit, I, I started, it was 20 15, 16, I was working at 20 Century Fox as marketing executive making trailers and movie posters. And I had started to spend about half my day working on the real estate stuff cuz it just kind of, your side hustle becomes the main hustle over time.
My boss was like, Alex, what are you doing ? You’re supposed to be opening these movies. And I’m like, I, I don’t know what I, I created this thing and it’s growing really quickly and I am so sorry and I, so I said, I will be out of your hair in six months, but I need you to give me six months. And he goes, All right, but I get free Rooms for life.
I said, Deal. He goes, Cuz I finance your r and d. And it’s completely true. We have dinner every quarter to this day and he does get free rooms. . Um, so then I, I left Fox and started to pursue this whole time. And then from 2018 to 2022, we took on, uh, it’ll be four more hotels next month. Not describe the hotels for people who don’t know,
Mark Kinsley: because this is a boutique hotels gathering.
Mm-hmm. . And so paint a picture for us of what these properties look like. How many, the, the word is keys, not rooms.
Alex Kirkwood: Yep. So I’m picking up apartments are rooms, hotels are keys. Okay. So how many properties
Mark Kinsley: would, and how many rooms, and how would you describe them to. That haven’t gone to your website
Alex Kirkwood: yet to look them up?
They’re almost exclusively historic with one exception. Um, typically like a 1908 craftsman in Santa Barbara on West Beach. Uh, nine keys between two buildings. And, um, we renovated that property in 2018, open in 2019, and, and, and really, uh, crush crushed our comp site, crushed our own projections to that extent, to the point where we were able to take on another hotel up at San Lu Obispo.
That one was a queen and Victor. Built in the 1880s, uh, 13 keys. So it was a little bigger and we got a little more economy of scale in that one. And then, uh, we got a deal done in Santa Barbara on East Beach. So we have West Beach covered and East Beach covered, and we get to share staffing. And I said, that was the day I learned like, Oh, you can synergize between two properties.
If you’re missing a cork on one property, you. Can pull from, you have a pool from the other that you can send over. Housekeeping, same thing. So that really opened the door to say, you know, the, these, these small properties, which most people are afraid of because of the lack of economy of scale, can work really well if you buy two or three of ’em, rope ’em together and operate as, as one.
So, so the guess walking in has no idea necessarily that we’re pulling a housekeeper from the other one. Um, but you know, we do and the back office does. And so, Our re most recent acquisition was Seven Gables in on Monterey Bay. Um, by far my proudest moment we bought during Covid and um, that’s been a tremendous success for us.
And now we’re looking forward to expand to Laguna La Jolla, Napa, and then the East Coast. Talk about that
Mark Kinsley: last property. What makes
Alex Kirkwood: your proudest moment? Uh, 25 Keys is an entirely different. And 9, 12, 13, and 15. So Palm Springs has 15, but it’s very limited service. Um, 25 is a whole different animal, and the demands and, and just the pace of it is, is very different.
There is an du moment on, on that site at, at any given day. And so that was, it’s also a sweet spot in terms of the economics when you start to distribute and share, uh, corporate, you know, departmental back office costs from a c. Downstream it, um, that one really sings. And so now that’s kind of not our new, it’s not a minimum, it’s just the target is that type of 25 key range.
We’ll do less, but we’re working with the revenue limitations now and, and we have kind of a minimum and then a goal target to hit or I’m being all business is perfect. This
Mark Kinsley: is a business focused podcast. I mean so many people in our audience. Our independent furniture, mattress appliance, retailers. Yep.
Family owned businesses. Started out around a dinner table with probably a couple thousand bucks in many cases, or family owned businesses that were passed down. And so they’re dealing with very different challenges. But when you’re talking business, you’re talking our language. Yeah. Oh. As you, as you think about, uh, des designing spaces and creating places where people feel comfortable, we’re very heavily in the sleep.
You know, I’m responsible for England or Mattress Company. We have an audience of thousands of independent retailers all over the country and all over the world. And so we think a lot about the mattress as it relates to creating the space. And we know that it’s not the only factor. So when you go into a property or place and you’re putting vision to that, how do you think about the sleep space and how do you think about that part of the guest?
Alex Kirkwood: It’s unlike a lot of my colleagues out there where they’re focused on, all right, get ’em in the room, but then get ’em out on onsite, spending money at the property. We buy bed and breakfast where you have a complimentary gourmet breakfast. But you know, we don’t have the restaurants that they do, so we try to buy in markets where we’re right in the thick of all the best restaurants.
Why compete with the best restaurant here in town? When was the last time you went to a hotel to had dinner? You know, If you wanna guess. Um, and so we focus a lot on the quality of sleep, and it is like a primary requirement for us. And so we want people to really enjoy the rooms. Our, our property in Santa Barbara’s only nine keys.
It has very little outdoor space. It’s a very small parcel, uh, very compacted site. And so we’ve got a, your guest room, the lobby reception, which is like a living room, a small living room, and the breakfast, uh, That’s it. And so we are heavily focused on the quality of sleep and the quality of that guest room experience.
And then saying, you know, if you want, here’s, here’s how to get kayaking down on the pier. Here’s, here’s where you can go for, uh, the wharf and here’s where you can go for dinner. Yeah. When you look at the
Mark Kinsley: elements that contribute to that good quality of sleep and making that an elevated experience, what are some of those specifics?
I mean, of course I think, you know, mattress, you’re gonna be there,
Alex Kirkwood: Mattress linens, uh, amenity of the bath products and, and, um, those, But the mattress is kind of number one, like we. There is no price too high for a mattress, especially at a smaller hotel where we don’t, we don’t need to, we gotta crush it.
Like it’s, it’s the quality of our guest experience is so heavily based on what you’re describing. Um, we’ll get quotes and I’ll be like, That’s kind of not enough. Like, find me the next level. This ain’t the level, the next level’s, the level. Englander. Exactly. Yeah. You can go Englander all the way up to
Mark Kinsley: Heston’s, which you can pay a hundred thousand dollars for those, just if you’re interested.
We can’t do this . We do
Alex Kirkwood: have limits. We do have limits.
Mark Kinsley: Yeah. Well, it, it, it is something we think a lot about too, is like, what is the mattress we can make that you would want to give to your loved one? And I think when you’re creating. Such a boutique experience and a high touch experience. It’s intimate.
And so you’re trying to curate, you know, the products that you, you can make sure that, all right, I’m treating this person like my loved one each night when they’re here on property. Mm-hmm. .
Alex Kirkwood: Yeah, I, I absolutely agree with that. Um, Most of our rooms, we don’t have a whole lot of double occupancy rooms. We don’t have a lot of business travel, so it’s almost exclusively couples and some families.
Each hotel has like a particularly a kind of the Airbnb suite or cottage or in the case of Hideaway, the nine key property. We, uh, the entire attic space of the first building is, um, Uh, it’s designed for families and of course they need their quality sleep. I know it was a six month old how valuable quality sleep is.
Oh, it’s,
Mark Kinsley: it’s everything. I’ve talked to a few people here with new babies lately. Uh, well, Alex, thanks for sharing some of your story. I know this vision, if I read this correctly, started when you were 14 years old,
Alex Kirkwood: uh, that you want that part of the story. Oh
Mark Kinsley: yeah, you might as well. We got a couple minutes.
Alex Kirkwood: So my, at 14, my uncle made me write a business plan. That’s how I’ll start this next. He made me write a business plan and I, at the time, I was the kid running around with the camera who wanted to be Spielberg and that wasn’t ever gonna happen. Um, but he said, I want you to write down a business plan. I said, Okay, by the time I’m 30, I want to work for a company like Cherry Bruckheimer Productions or Paramount Pictures at the time, the two, you know, Top Gun and whatnot.
And um, and I wanna have holdings in real estate. And at 30, I was leaving 20th Century Fox. Had ownership in three properties. So
Mark Kinsley: incredible. Saturday at 14 years old. Well, hey, thank you to 20th Century Fox and a big get for, you know, Rooms
Alex Kirkwood: for Life from your boss. Yeah. Now Disney, a smart guy now Disney, , those dividends are gonna pay off
Mark Kinsley: Hey, people wanna get in touch with you. How can they track you down? Yeah,
Alex Kirkwood: Alex, At kirkwood collection.com or kirkwood collection.com is our, our website. And um, feel free to reach out collection, not collections. Yeah, we’re not, not. Not a collections agency. . All right. Thanks for being on the show.
Mark Kinsley: Appreciate you.
Alex Kirkwood: Thank you very much. Appreciate it.
