Miami tourism growth ‘has held completely’ amid inflation, FREEHOLD CEO says

Miami tourism growth ‘has held completely’ amid inflation, FREEHOLD CEO says

FREEHOLD Hospitality Co-Founder & CEO Brice Jones joins Yahoo Finance Live to discuss the tourism industry in Brooklyn and Miami, inflation, and staffing locations.

Video Transcript

Imagine yourself enjoying a nice espresso or espresso martini at a bustling boutique hotel without the actual hotel. Now, that’s the concept Freehold Hospitality is going for. And joining me now is the company’s CEO and co-founder Brice Jones, along with Yahoo Finance’s Brooke DiPalma as well. Now, Brice, we were talking about your business model during the break. Just give us an overview of what you’re bringing to the market here.

BRICE JONES: Well, thank you for having me. We’re bringing to the market a work by day, play by night concept. And we’re open from 8:00 AM to 3:00 AM at any given venue, serving coffee to cocktails all hours of the day.

BROOKE DIPALMA: And now, essentially, you have a location– a Freehold Brooklyn. You have Freehold Miami. You rent all your locations. And according to a new survey from Alignable, they said about 37% of small businesses across the US were actually unable to rent in full in October. So how are you facing the inflation that’s hitting rental prices? And when you look at expansion plans, how is that impacting that as well?

BRICE JONES: I mean, for us, you always have to adapt to whatever it is, whether it be rising cost of goods sold, payroll costs, or just the ability to find staff. And the recent rent hikes. You just have to find a way. And we do that through volume. Specifically, when everybody else might be cutting, we’re trying to invest more into programming and events, whether it be the DJ or the barista walking through your coffee in the morning and so forth.

I got to ask you about Miami. I am a native. I spent a considerable time there growing up. I’m just wondering– I haven’t been down there since a pandemic. And I know the scene has changed tremendously. I’m just wondering what it looks like in terms of operating your business down there.

BRICE JONES: I mean, it’s bustling. The tourism is very, very high right now. For us, we definitely chose that market, as we thought it was pretty much the best growth market in the States right now. It’s held completely through the rising cost of inflation and so forth as well.

And also in Miami, you have cryptocurrency available to pay for your customers. What sort of interaction have you seen with that? Is it successful there? Are you looking to bring it in Brooklyn as well?

BRICE JONES: Yeah. I like to compare it to years ago, you would have a customer come in with an American Express Black Card. And for us, you don’t see that card all the time. And it’s similar to crypto. You don’t see it all the time. But it’s special when it happens. It’s happening more and more frequently in Miami specifically. And I’m sure the bartenders are always excited to accept it.

Yeah. I know the bartenders always love to see those black cards whipped out here in New York. I was also asking you over the break, you have private clubs such as Soho House. You’re in a different genre here. You also have that live to work situation. And you are open to the public, whereas that is a private club. How does that difference in business model work for you?

BRICE JONES: I think volume. Soho House is a curated group that is very specific to the entertainment industry. And for us, we’re trying to appeal to a variety of different demographics, whether it be the tech community, whether it be music and entertainment and fashion. And for us, that element really brings a very diverse group that packs the place every night.

I didn’t hear finance in there. No finance bros?

BRICE JONES: We love the finance community. We love the finance community. Brooke.

BROOKE DIPALMA: Just to go back to inflation here, we’ve seen higher prices across the board. Certainly when customers are going to get groceries to the store, but also seeing less of an increase at food away from home. Have you taken any higher menu prices? And also, how is that sort of taken a toll on your customers?

BRICE JONES: I think our industry, it’s a bit tougher to raise prices. If we raised the price of a latte to what it should be, which would be about $7, it would be an outcry. For us, we really try to invest in the volume and try to bring– when everybody else is kind of making it smaller or raising prices, we try to actually expand our programming and our events.

Well, let me ask you– continuing along the discussion of prices. Labor, a huge input cost. I know I’ve talked to several people in the hospitality field, and the turnover is a killer. It’s been a challenge for a lot of business owners to retain and just get people in the door to work the service bars and the floor and whatever. How are you dealing with these labor challenges?

BRICE JONES: I mean, to give you an example, New York raised the minimum wage four times in four years. So labor has always been an issue for our industry specifically in New York. And for us, the new market is getting people in the door. But I got to tell you with, that’s actually been almost a benefit of inflation in some ways. People actually need the jobs. They want the jobs. They’re here to work. And they’re excited to come to work and learn more about the business every day. And we haven’t really seen that for the last few years.

BROOKE DIPALMA: And it’s been sort of a recovery effort by all New York City hospitality to really get back after the pandemic. You sit on the board of the New York the Hospitality Alliance here. What exactly are you hearing from fellow restaurant owners, fellow small business owners as well, these boutique hotels? Would you say that we have fully recovered from the pandemic?

BRICE JONES: I think we had an amazing 2021. I think we are cautiously optimistic about 2022 and beyond. I think the industry is going in a very positive place despite rising cost. And I think as far as turnout and guest appreciation we’re seeing a ton of success there.

And finally, to round out the discussion, expansion plans. Are you going internationally? Antarctica? No, there’s no public market down there. Expansion plans?

BRICE JONES: We’re very much eager and willing and looking into it. We have our eyes on a couple of things. But I can’t really say anything at this time.

All right.

BROOKE DIPALMA: To be continued.

Sounds enticing there. Freehold Hospitality CEO and co-founder Brice Jones and Yahoo Finance’s Brooke DiPalma.