Announcing the North American Hostel Association

Jimmy Black (00:00): Welcome back to the hostel road trip mini series. Jimmy black here at the hostel trip podcast. Again joined with Bobby Dyer from ith hostels. Hello everyone. Jim Kennett from the Pacific Northwest hostel. Correct? I'm sorry, I keep on that Northwest Portland. Jim Kennett (00:20): They are in the Pacific Northwest. Jimmy Black (00:24): You are an HR affiliate. Yes we are. And thank you so much Jim, for joining us as unprecedented times in our industry and everyone's really shook it up by it. But you're, as we commonly joke about with Dan over being a few other guys that have been in the industry for a long time, we look at you as like the hostel Jedi Knights. So it's good to hear from you in these times. How long have you been in the industry? Jim Kennett (00:51): 40, 42 41 years. Jimmy Black (00:55): 41 years of experience. Have you had anything of an experience close to this at all? Jim Kennett (01:04): I don't think anything comes close to this that I was thinking back and you know, we've had the various viruses size bird flu, but they never really, they never shut us down. They just gave us kind of a scare. The December 11th, nine one one was probably the closest again we didn't shut down most hostels. I know on the West coast most hostels were down 25% Jimmy Black (01:34): Yeah. But yeah, it really, Jim Kennett (01:35): Right now we're down 95%. Jimmy Black (01:39): Yeah, it really is overwhelming in a lot of ways and it's tough to even as you go through people that I've been in the industry far longer and I've seen it all. That is kind of sometimes a little bit overwhelming when the people that have seen it all have no comparison whatsoever in this situation. Now you've got two locations in Portland is that Jim Kennett (02:05): We have just one, but we have six buildings on the same block. Jimmy Black (02:10): I would say lock cause you just built a suit. I actually went and stayed at that location, which is really cool. Very rare thing in the U S that someone actually built to suit the design and make it a hostel. So that was a really cool experience to see that building, especially after all the experience you've had to see how you could build it with that. In mind. But with that you have a bar and a restaurant, cafe style operation, very common in Europe or South America, Australia, all the other continents. A lot of hostel owners will look at you like you're crazy if you don't have a bar, you're one of the few that has actually been able to overcome the restrictions, zoning permits. It's all these things to actually do it. But in this situation, Jim Kennett (03:00): How was that duality working out for you? Well, it's shut down right now. It's working out good in that we have 12 beers on tap, so I need a drink. Kombucha on tap. So I'm good there. We we had to so just backing up a little bit, you know, traveling the world and staying in hostels, that's the one thing that we noticed that we were lacking. Oh, all the great hostels had some kind of a bar or a pub or restaurant, you know, when we were able to expand and build a new building, that was, that was a key thing for the vibe of the hostel. And it's great. You know, we have long hours. We, we kind of start out as a restaurant at 7:00 AM and then by the time we closed at one in the morning, we've become more of a pub, live music and local beers on tap and all that. Jim Kennett (04:02): But yeah, once this came on so fast, as, as we all know we're spring break was upon us and we went ahead 240 guests a night. And you know, let's people come in for conferences, travelers groups galore within three days. The phone was ringing, the cancellations were just, that was the time that you know, everybody I think was freaking out. And then you know, we just I had to lay off, I mean, we had to jump into action mode and we had to lay off all of our employees and basically Britta, my wife and I we brought on one, one half time employee. I just running the whole thing, the cafe, the cafe chef. We brought out all of our employees in to get their last paychecks and we put out all with perishables and said, take what you need. Jim Kennett (05:05): Bring growlers on tap. So and we still have plenty of that, but you know, so I mean from there it's the advantage of the cafe though is it's very popular in our neighborhood. It's open to the public and it's become the common room to the neighborhood, you know, to come in and meet people from around the world. People tell us all the time, well, I feel like I'm back in the trip. I took, you know, 10 years ago or when we have music nights, they walk in and go, I feel like I just walked into an Irish pub, you know. So so once we opened the doors, everybody here in Portland has been so cooped up and I think all over the country, all over the world that we're, we're gonna, we're gonna really boom with the cafe. So probably not going to make up for the, the slow restart of the hostel. It at least we'll have that going for us. Jimmy Black (06:05): That is a nice element to it though, that you know, you've, you've got a little variety in your cashflow and in your demographics. So that you're not relying fully on the international travel or come back through where that neighborhood bar, where people are cooped up in the neighborhood, I can see you getting a boost for that right away. So that's a nice feature too. Jim Kennett (06:23): Yeah. Hello. The hostel has always been the cash cow that's allowed us to Jimmy Black (06:29): Yeah, yeah. Jim Kennett (06:30): Create all this. Jimmy Black (06:31): Yeah. It does create for some months a certain future maneuvers. Now we talked briefly before we get on the episode here. One of the hot topics is SBA loans and some of these are grants that are forgiven and things like that. And they have the triple paycheck program, their program, they have the other disaster relief program. But as we have talked to a lot of people, hostel owners that run a very, you know, off the grid, I've got work exchange people. I'm the owner, I run it myself very little on paper. And in this moment you can apply, a lot of them don't qualify for these things. So what is your experience been thus far with that SBA? Jim Kennett (07:19): I dunno, 10 years ago we, we dropped the big banks. We did just didn't want to be associated with, you know, bank of America and all. It turns out those are the, those are the banks that got the loans for our small regional bank who had thousand applicants to, you know, to process. And you know, they tried the damn this and you know, and they called us, Oh, I don't know, a week ago and said, you know, we're really sorry but you know, we just couldn't get your application in. And you know, we were pretty disappointed. And then two days later they called us and said, we're so confused here. You actually got the loan. Your application did get in. You know, the thing is we applied for our three companies, the hostel cafe, the Northwest hostel, and then we have a, we're doing a hostel, a seasonal hostel up on Mount hood calls, exact mountain farm. Jimmy Black (08:19): Oh, cool. Jim Kennett (08:20): We applied with that as well. That's 50 acres. And you're Jimmy Black (08:25): Like that Jim Kennett (08:27): This was going to be May 1st was going to be kind of our grand opening. Jimmy Black (08:31): Oh, so this is a new expansion? Jim Kennett (08:34): Yeah, yeah. We did a, you know, we opened up, you know, kind of a soft opening and, and push it out as a hostel. But, but this year, you know, we are, Jimmy Black (08:46): Oh, that's great. Not to jump off, sidetrack, but I heard you say, I live in a year and we cut it from Pacific yurts. Jim Kennett (08:58): Yeah, yeah. Do you know about Colorado, your company too? Yup. Yup. Oh, cool. Yeah, so we have eight years. We just do an app first tiny house project and a big ranch, which is kind of our farm central. You know, I bought a, I bought a city bus and converted it to to campers kitchen. So the kitchen, Oh, we gotta come up for the podcast and do an episode up there. Yeah, you do appreciate it. That's awesome. Kind of bringing me back to my roots. Interesting thing was after the big real estate bust in 2008, we were looking for five acres, like a cabin just for Britain. And I, you know, we came across this 50 acre property with the cabin in a sprawling ranch house for it had been on the market for like twice what we paid for, you know, so, you know, I mean times like times like this, you can, there's positive things that come out of it, you know, and then that's kind of how you know, with the whole thing. Jim Kennett (10:43): Yeah, we were in panic mode for three or four days, but you know, through so much. And both Brittany and I are pretty resilient, you know, both of us, I come from a pretty poor family, never had much money to begin with. It's kinda like, okay, I get it. You know, this thing's not going to be dash, you know, so we, you know, we just jumped into a w and we shut it a go fund me for, for our laid off employees, you know? No, I think it's pushing about $6,000 right now. Giving out to laid off staff to help with their rent. You know, we did a big campaign. We reached out to all about followers from hostel travelers to local musicians that play at our cafe and you know, just all the way in different followers. We have 'em on you know, buy gift certificates, good for lodging, a good for food at the cafe and we're over $10,000 and selling gift certificates. So people, yeah. Yeah. Back to the SBA things. So we got the, we got the loan for all three places. No, we got it for just the hot for the hostel. The other two didn't make it in, but we did get a big tip from a bank and said, we heard that PayPal was processing loans for anybody that has a PayPal account and they've been really successful and really speedy. And so we had all the applications, everything filled out. So we immediately sent into PayPal within two hours they responded where you received your applications and they're trying to get them into the next round for the cafe and for zigzag. Jimmy Black (12:31): Oh good. That's a good, that's good tips there for the listeners there. Jim Kennett (12:36): Didn't get in. Yeah, Jimmy Black (12:37): Yeah, yeah. There still are other options. And it was great to see. They came out that second round of funding. We were in a similar situation with multiple hostels and we applied for each entity. Some got approve, some didn't. But wow, that was a roller coaster ride of a week while you were waiting a lot of drinking refresh on my SBA account. Jim Kennett (13:11): The challenge, you know with, with that PPP loan is, you know, you're supposed to bring, go up, go up to full staffing, you know, and then by the end of June, we don't need to do that. None of us are gonna be it need to go to full staffing. We're not going to be at full capacity. So we're really hoping, we know that like the national lodging association that we're a member of has, is, has strong lobbying and they're really pushing to get that date extended for another two months. That happens because for us to spend $137,000 on payroll in two months, Jimmy Black (13:50): It's very challenging. Yeah, that's an interesting conjunction. Jim Kennett (13:55): Cool. A part of, if you can meet that, that goal and it becomes a grant or if you can get 75% of it a grant. So we're looking at creative ways of of being able to spend that. I know my salary is going up. Jimmy Black (14:11): Yeah, exactly. That's the interesting thing. We want it to highlight not only if you get approved, but if you do get approved how to manage this correct thing because mismanage it, you could go from having a forgivable grant. So all of a sudden having a loan that saddle on you for so many years, I get fearful that also hostel owners getting that large injection of money all at once. You could be you could make some mistakes that could follow you for a long time. Jim Kennett (14:45): Yeah. If you're not sure, here's a tip from a banker from that I know from hustling in the past, he was working, he was working for bank of America and he's still there. And his number one job right now is processing these loan. I talked to him on the phone and, and his advice was if you get the loan except it put the money in the bank and don't spend it cause in two years you're going to have to pay it back. So unless you think you can meet those guidelines except it but you know, put it in the bank and then and then kind of go from there Jimmy Black (15:24): That, you know, Bobby and I were having the same conversation last night. It can be overwhelming to look in the account. But what we did is we were like, alright, well we're going to take most of this and we're going to put it in the credit union account that we never look at there and hopefully we don't need it. And then if we can make it through this time, then maybe that could be used for other investments or other things or capital. But what would be the biggest mistake is to get a little bit confident or a little bit big for your britches and spend it. And then this thing goes on for longer than expected and now your worse than before. Right? Yeah, exactly. I think that's a very good point. Now, Bob, you had some questions you wanted to ask Jim about his upcoming conference and trade association, but it's more about what you got going on Jim Kennett (16:16): Together. After last time I met you guys was I think two years ago in Charleston, the conference that Vicki puts on. And so if some of us, you know, spun off from that and, and just started talking about studying some kind of an organization and then we looked into it you know, one of our guys is is an attorney and you know, kind of did some research and we came up with the thought that a trade association is the best thing for us because it's not, it's not a it's an organization that's open to all in the industry. So all hostels, you know, there's not going to be something where we're inspecting hostels or anything like that. It's kinda like if you want to join this group of hostel operators and, and you know, benefit from everything we can do at the power of many that you know, that you'll be able to join and keep it keeping dues, you know, really reasonable. You know, we're talking about large hostels, over a hundred beds being just $50 a year and in smaller hostels being $25 reasonable and then, and then as a benefit, you could actually take that $50 and a play at, toward your registration for the annual conference as well as, Jimmy Black (17:37): That's interesting. We were talking to Joe Gill from a North Carolina and he was, you know, we're on the topic of international flights. They're going to be limited for the near future. So how important it is for, you know, getting Americans to travel and do hostels and you know, everybody comes together, you know, creating an advertising campaign for us. U S hostel travel. And if everybody puts a, you know, a few few bucks together, you can have a large campaign to at younger travelers, the travel within America. So, yeah, Jim Kennett (18:12): One small group of us now that are working in association is Sydney from the 11th Avenue hostel in Denver. And he has a marketing degree and she's, she's young and she's really pretty hip with, you know, with social media and all. And you know, so it's, you know, we put all of our expertise together. You know, Karen is on our board of advisors. He was, he was the first one to say, yes, we're going to be eventually know we've got all the paperwork to file with the federal government. So the five Oh one C6 and you know, we're gonna put out a an email blast to all the hostels close to, you know, even though times are tough join and if you can pay the dues now, great. You know, we need some funds to use in everything if you can't pay, join anyway and pay it by the end of the year. So that's kind of a campaign that we'll be doing, you know, within the next week or so. Jimmy Black (19:24): Exciting and encouraging. I think that people need say account IGH hostels in will be on board. But I think this is exactly then in conjunction with this. Tell us more about the conference. Where's the one going to be? Jim Kennett (19:38): So the conference will be our big sort of signature thing was supposed to be this next fall, but we decided with the everybody focusing on the virus and all, we're going to push it to 2021 it ended up being in the spring so it might just get delayed for six months. Nice. But we haven't set a date yet, but it'll be the first one. We'll be in Portland, Oregon. I love Portland. I have a conference center that's donating the space just so you know where we'll be. It'll be, it'll be a good one. We want to kick off a good conference that people will come back to and then we'll rotate from hostel the hostel. You know who, who wants to host it next? Denver's in line for the second one. Jimmy Black (20:23): I want to go see Sidney's hostel. That's on my bucket list as well cause she's such a strong gal. I can't wait to see, Jim Kennett (20:30): But she's done massive renovation. It will be exciting to see that. But you know, once we get the paperwork filed in our organizing group, their steering committee will become the board of directors. That'll be the governing body. We'll keep that to six or eight people and then and then we'll have a board of advisors, which we've already started. For me, that'll be people who, you know, I have a lot of expertise. Maybe they don't have the time to be in meetings all the time, but, but they'll put their name out as somebody who would recognition and, and if we have questions or you know, whatever the expertise is, we can reach out to them. Yeah. It actually would be great to have one of you guys on that board of advisors. Jimmy Black (21:15): Oh, it'd be happy to. We'd be happy to, if it's TV use Bobby, if it's voice used to me. [inaudible] Does that trade association cover any of the work exchange elements of being like a nonprofit allowing the work exchange to be more legitimised or is that not covered in a trade association? Jim Kennett (21:40): We haven't really looked into that. That would be interesting. Jimmy Black (21:44): That's something we're still trying to figure out on our end to just make that more clean. Jim Kennett (21:50): Yeah, yeah, yeah. Because there's some issues with work exchange. Jimmy Black (21:53): Yeah. Because the fiber one C3 with like an HSI, they get covered fine. But that designation of five and one Seafreeze impossible to get, you know, so all those final one sees, I'm very fascinated by the fire. Bobby Dyer (22:08): Yeah. Jim Kennett (22:10): You can read into the but Oh, what was I gonna say? Yeah, just, you know the, the power of just, if we can get a hundred or even 200 hostels this is, you know, Canada and Mexico and the U S and, and we can start negotiating with credit card companies for better rates for OTAs hostels. Imagine if 200 of us went to Hostelworld and said, Hey, how about an 8%, you know, Bobby Dyer (22:45): Yes. Jim Kennett (22:48): Well, we're all, you know, we can do a boycott in our insurance. Yeah. Yeah. So there's, there's many avenues that, you know, if we all unite and then just networking together, that's so important. And then being a fi being the trade association, it's not like we're gonna we're not competing, you know, like the conference that Vicki does, we would promote that conference. There's a conference that happens in the Midwest, you know, Detroit, right? Yeah, yeah. And you know, kind of just promoting all those opportunities up there and the international conferences, you know, getting a group of us to go and, you know, Jimmy Black (23:30): Yeah. New hostels popping up. We were at the comp, Vicky's conference last, this last bell a couple of months ago and there was probably 30 new people that were, you know, getting ready to get their hostels set up or open or, you know, narrowing down a city. So it's great to see all of the you know, Jim Kennett (23:45): New interests and whatnot. And yeah, definitely gathering everybody with the, the association will be a great resource and support and just grow the whole industry in general. Right? Absolutely. Absolutely. I've always been a person that has had the interest in helping others and I've had many people, you know, contact me that are ready to open a hostel or some that are just dreaming about it and you know, it's, it's, it's fun to work with them. It kind of brings me my early days. Jimmy Black (24:14): Yeah, I was, it was really inspiring to hear. We spent a lot of time with Frankie for bulk and brew at a couple of conferences that go and it was so cool to hear how much you helped those guys and were like a mentor to them through that process. The great example of like two young guys that want to make it happen and there's very limited options out there of people like yourself or Vicky or Darren Overby from hostel management.com that have this experience that can open the doors up or give you the Pat on the back when you need the little extra help and encouragement to get through the tough times. So I think it's awesome that you are part of this trade association and hosting this next conference because it's, it's really pivotal that people like you and Darren Vicki are on the forefront of these things that can help keep us younger entrepreneurs in line and in check Jim Kennett (25:13): Repeat Frankie's on our steering committee. And so is Jay from budget. Jimmy Black (25:17): Great guys. Great guys. Yeah, that's awesome. They were excited to go up there and check their guy's place out. So this is all really encouraging news for the industry at a time where I think people need something to look forward to and to be excited about in that trade association. The power numbers, like you said, so many things from insurances to OTA to buying in bulk to all different things, lobbying efforts, they all become so much more tangible and reliable when you have those strengths and numbers and a budget to push together. So, Jim Kennett (25:51): And then there's going to be so many of us dementia, new hostels and make them, you know, have a better chance to succeed, Jimmy Black (25:59): Energized this industry. I love it. Well, Jim Kennett (26:03): When people are almost ready to open a hostel, I always say, well, the best way to learn is to come job shadow at my hostel. You know, come and Frankie and Jay did that for a month, five days a week. They would come for a few hours here and there and behind the front desk and a great tip for people that we need a lot of people that want to make a hostel and they've never worked at one. Think about shadow as somebody you can learn. Jimmy Black (26:37): Okay, that's a great, that's a great opportunity for listeners out there. If I were doing it, I would make that call the gym candidate. You can save yourself a lot of heartache and stress and troubles by learning from the experience of others. And then a lot of people I think might even find that maybe it's not exactly what they thought it might be or maybe they're not fired up for it as they thought they might, especially if they haven't worked in one before like the ops yet. But great info there, Jim, and inspiring information about this trade association conference. We're super excited and I've inspired to see that you're battening down the hatches and holding on and getting through it with your lady there and making sure you come out and the other side, I'm really excited to hear about this farm project you got going on and we're definitely put that on our agenda. I was going to say, let's do the podcast that you're [inaudible]. I think we should do it up there now inside of a year. What's the name of the new place? Zigzag. Mountain farm. That's beautiful. All right, well, Jim Kennan up in Portland. Thank you for your time and your wisdom and we will be staying tuned for this trade association and count and just let Bobby and I know if we can help in any way in that area, we're on board. All right, sounds great.