Insight
Resnick on why KSL's only two investment losses involved charismatic founders
“The two times we've lost money, if you can create a theme, I would say is we had a very charismatic seller slash founder of a business that was staying involved, and it was a business that we didn't have as much domain expertise in going into it.”
Prediction Not checkable as stated
Resnick: Hospitality market dislocation will yield superior returns over two years
“So I think in the next two years, we're going to see more of that.”
Prediction Open · timeframe Jun 2033
Resnick: Travel spending will grow at more than double GDP growth
“It's projected to grow more than double that of GDP if you look at over the next decade.”
Assertion Supported
Resnick: KSL is the largest private travel and leisure investor
“We're one of the only groups that focuses on it at scale. I think we're the largest private investor and travel and leisure businesses in the world.”
Insight
Resnick: Economy undergoing multi-decade shift from goods to experiences
“We were in the middle of a multi-decade shift of the economy to going from more of a goods-based economy to more of an experiences-based economy.”
Opinion
Resnick: Higher interest rates create unique buying opportunities in leisure assets
“We think there's a really unique opportunity to combine lower entry points for pricing because higher interest rates mean you can't pay as much for something a day. Yet still have this long-term, very favorable consumer outlook. So to us, it's a really good ti…”
Insight
Resnick: Hospitality capex must prioritize guest-facing amenities over the back-of-house
“It's really important to distinguish between what drives the customer experience and what's just cost for cost sake. We don't need to have a fancy back of house, but we need to have really appropriate amenities, the pool, the spa, the gym, the restaurants, and…”
Assertion Partly supported
Resnick on how KSL created the Ikon Pass via massive resort consolidation
“And we had the idea of basically taking what were then, I think, 15 or 16 ski resorts that we had owned, that we bought through five or six different transactions, merged them together, and started with that core at Uculus. And from there, we partnered with an…”
Insight
Resnick: Inspecting operational details sets a cultural tone across hospitality businesses
“And coming out of that, what Mike always said was, inspect what you expect. Getting into the weeds like that, I think, while some could certainly say it's overly micromanagement, it set a tone culturally for those details mattered.”
Disclosure
Resnick: Two Thirds of KSL Deal Flow Is Now Proprietary
“And we've gone from about one third of our deal flow being proprietary to now two thirds of our deal flow being proprietary.”
Insight
Resnick: Leverage is the enemy of liquidity, where value is created
“Leverage is the enemy of liquidity and liquidity is where value comes from.”
Insight
Resnick: Mismanaging resort retail, dining, and spas can wipe out profit margins
“If you don't really understand the complicated rule set of running a retail shop versus running a hotel, running a restaurant versus running a golf course, running a spa versus running a health club, then what can be a 30% margin business can rapidly become a …”
Assertion Supported
Resnick: Major hotel chains have shifted from property management to franchising
“The hotel companies themselves have evolved. They started off as hotel owners, like Marriott and Hilton and so forth. First, they were hotel owners. Then they were managing hotels for third parties. Then they really became franchisors. They have wonderfully po…”
Assertion Open · timeframe Jun 2023
Resnick: Tented eco-resorts have an 80% smaller carbon footprint than traditional hotels
“Your carbon footprint is 80% less than what it would be in a traditional hotel, and you're basically living in the middle of nature, but you're not sacrificing a comfortable bed and a shower to do it.”
Prediction Not checkable as stated
Resnick: E-bikes will drive a tenfold expansion in multi-day cycling tourism
“The number of people who will do that will expand tenfold as people get more and more comfortable with e-bikes as a form of transportation.”
Opinion
Resnick: TripAdvisor is not good enough for local travel curation
“TripAdvisor is good. It's not that good. There's still gaps there at the local level,”
Insight
Resnick: Tight Debt Markets Benefit Scaled Private Equity Firms Over Competitors
“When banks have to tighten up on their lending requirements and reduce their balance sheets to our sector, we're going to be at or near the top of the list of who they're going to lend to. And I think that's a logical reaction for banks to have to tighten in a…”
Insight
Resnick: Frontline operational empowerment produces the best long-term business outcomes
“While very inefficient to empower all your people to make individual decisions, because at times you can feel it's like a box of chocolates. You don't know what you're going to get all the time. That leads to the best long-term outcomes.”
Disclosure
Resnick: KSL has lost money on only two investments out of hundreds
“We've lost money twice. Across however many hundreds of investments we've made.”
Insight
Resnick: Generating 15-20% returns requires taking unmitigated risks
“You can't generate 15, 20% returns without actually taking risks. So not every risk is mitigated. Some aren't and they can go wrong.”
Assertion Partly supported
Resnick: Travel and leisure accounts for about 11% of global GDP
“It's the third largest sector of the global economy. It's about 11% of global GDP and employment, both.”
Assertion Partly supported
Resnick: US travel spending has grown 7% annually since 1960
“Since 1960, travel and leisure spending in the U.S. Has grown by about seven percent per year, more than double that of GDP.”
Disclosure
Resnick: Just over half of KSL's deals are hotel-related
“About half of our deals, a little bit more, end up being hotel related. The other half tend to be split across all those other segments.”
Disclosure
Resnick: KSL is roughly 90% focused on leisure over corporate travel
“We tend to focus on the leisure part of the travel business, less so the corporate travel or the urban hotel. We do some of that opportunistically, but we're primarily leisure focused, about 90%.”
