SPACEEZ digest

Meet Larry Broughton

THE PEOPLE
BY JEFF BRICE ORNSTEIN
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Broughton Hotels, based in Anaheim, CA claims it has some “pretty radical ideas for a hotel management company. Ideas like personally interacting with investors and owners regularly, being authentic in our daily practices and reporting, and finding creative new solutions to old problems. Personal. Authentic. Creative. You won’t find that everywhere, but it’s kind of our thing.” Sounds interesting? Well, I had a chance to speak with Larry Broughton, CEO, and learn more about his group and philosophies and it’s definitely an interesting mix of dedication, humanity, passion and vision.

Jeff: Larry, tell me about the first job you had and how that got you to where you are right now. What was the transition?

“I realized that the hotel industry offered a lot of things I was looking for: the ability to lead, marketing, real estate, finance, team building, customer service, creativity. You know all kinds of things that really kept my schizophrenic entrepreneurial mind busy!”

Larry: Well, I think that like anyone in life who becomes a super achiever, each step leads to the scene that sets you up to the next one. Sometimes you’re going to fall, sometimes you take a couple of steps back, but you keep leaning into life. I try to figure out what I learned from every position I’ve been in. My first real job was a dishwasher at a dive of a restaurant in my hometown in rural New York. The place was a pig sty to be honest with you, but it paid a few bucks. I went from there to McDonald’s and became a burger flipper (this is while I was in high school) and then became a manager there, which I thought was very cool.

I moved out from my parent’s house when I was seventeen with my twin brother and, to be honest, neither of us were great high school students, though now we’re both highly educated. We were really into the martial arts and I thought that’s what I’m going to do for the rest of my life. We both came out to a National Martial Arts Tournament in San Jose and it was at that Martial Arts tournament where I heard the rumor the Army was going to be sponsoring a Taekwondo team for the 1984 Olympics. I thought that would be my ticket out of rural New York to a bigger life.

When I came to California, it was a big old world out there! A different world! People thought differently, and they were innovative. You know, all the mystique that goes with places like California or New York City, right? So, I went down to the Army recruiter’s office when I got back and said, “Hey how do I get on this Army Taekwondo team?” I really had no idea how the military worked. They said, “Well, you’ve got to be in the Army. I said, “What…!?!? I thought you just sponsored the darn thing!” Ultimately, to make this long story short, I ended up getting into the Special Forces and into the Green Berets. I spent almost nine years in the military, and about eight of those were in the Special Forces, where I travelled around the world doing amazing things.

While I was travelling in both Central America and in the Middle East, I really got this keen awareness about foreign policy and public policy. I really got interested in the whole political science realm. I thought that maybe when I get out I’ll go to school and work for the state department one day and maybe run for political office.

While I was in the service, my best friend moved to San Francisco. Back then it was pretty inexpensive to go to school in California, so I saw this as my opportunity to get back to California. I moved to San Francisco and my first job was working at a little no-tell motel in the Tenderloin District of San Francisco. I made five bucks an hour, went in at 11:00 pm at night, finished up at 7:00 am in the morning, and went to school during the day. After being there for a few months, an investment group came in to buy the place and turned it into what they were going to call a “rock and roll hotel.” It’s now called The Phoenix Hotel and was the first hotel of Joie de Vivre, which is now part of Two Roads Hospitality.

After a short time, I became a manager at that little hotel and I realized the hotel industry offered a lot of things I was looking for: the ability to lead, marketing, real estate, finance, team building, customer service, creativity. You know all kinds of things that really kept my schizophrenic entrepreneurial mind busy! I was made a partner in the company and over about a 14-year period we picked up 14 hotels in San Francisco, which now puts us into the late 90’s, and I started to realize at that point, that while I loved my role there at Joie De Vivre, I’m really built as what I call a “primary leader,” and I was in a “secondary leadership role.” I was the number two person in the company and I was never going to be the CEO. So, I decided I was working way too much, my wife at the time was working too much, and we decided we were going to move to Southern California and just figure out what we were going to do. We were starting a family, so we came down here and I started my own company.

Jeff: And how old were you when you started your own company?

“…we have to be tenacious. We have to have our core values, we have to have people on the team who believe in what we’re doing. We’ve got to make sure we’ve got the right people on the right seat on the bus.”

Larry: Well, I’m 55 now – seventeen years ago, whatever the math is – but I still had my partnership in the Joie De Vivre management company and a bunch of the hotels. But at that point, we were going into 2001 and I had our first hotel in escrow. We closed escrow in January 2001, we were heading into the national recession at the beginning of the year – the dot com bomb, the global recession, and SARS.

All of my investments were in hotels in San Francisco and about a third of that market was from the Pacific Rim, and that year we lost about 40% to 45% of the value of all our hotels. Then 9/11 hit. Interestingly, broughtonHOTELS had just opened a hotel September 1st of that year out in Palm Desert called Hotel Mojave we had renovated; along with also having just opened a hotel that we were building in Santa Barbara on September 9. It was kind of a kick in the groin at first, you know with the phones having died on September 11th and people were like the walking dead.

We were all stunned. The good thing was I had learned about the power over the years and we got some great press for the openings of our Palm Desert and Santa Barbara hotel projects in the September issue of Travel+Leisure, Conde Nast, Men’s Health, and Budget Traveler. There are probably a dozen different national magazines that we had some decent write ups in the month of September. So, all of those people who were planning to go to Italy or Hawaii or getting on a plane and going someplace far away … well, about three or four days after September 11th, our phones just went crazy. People still wanted their vacation booked, so both of our properties had a hundred percent market penetration in that first year, while most properties don’t hit a hundred percent market penetration for three years.

We kind of looked like we knew what we were doing, but we actually kind of just stumbled in at the right place. We obviously had to do the ground work. We had to do the basic blocking and tackling, which was what I made sure we had our PR engine doing, but you know the stars and the moon were aligned. We got a lot of attention. When there were hotels that were five, ten, fifteen years old that didn’t have the pleasure of getting the press that we got, and that really helped launch us during the first year. That’s how we got to where we are today.

What I learned over the years during several recessions and a depression, depending on how you look at it, is that we have to be tenacious. We have to have our core values, we have to have people on the team who believe in what we’re doing. We’ve got to make sure we’ve got the right people on the right seat on the bus. That way we can run a leaner organization, so we are more productive, and people have fun doing what they do. I loved that natural rush of what I felt when I was creating this company. I remember having a conversation with my e former wife’s great aunt … and she asked, “Are you proud of what you’re doing?” Yes! “Do you believe in what you’re doing?” Yes! “Do you want to inspire people?” Well of course I do! “Well then, the company needs to have your name on it. The company leads the path with your name on it because you can’t hide behind another.” And she said, “And that way the people know that your name is on the company, so it’s your reputation. They will know who to call, they could just pick up the phone.” And so that does put a little extra pressure on me having my name on it, because it’s my reputation that’s directly impacted.

Jeff: What motivates you, as I understand it, is your sense of adventure and your entrepreneurial spirit. How do you define commitment? What are you committed to?

“…perfection is a quick trip right off a cliff.”

Larry: What I’m committed to is excellence. The Greeks have this word called “arete,” which is the pursuit of excellence in all we do, you know, the way we kind of celebrate and glorify our higher power. I do believe there’s a “higher power” out there as some people call it. Some call it God, some call it Universe. Whatever it is, I think the way we glorify our Creator is by pursuing excellence in everything we do.

When you commit to that and don’t pursue perfection – because perfection is a quick trip right off a cliff – you know with high blood pressure and everything else – then I think we all know when we’re pursuing excellence, and we’re not just phoning in our performance.

In the Hospitality Industry, you can walk in immediately and tell whether the team – we call the people who work with us the team (notice I didn’t say work for us) – we call them “team members,” not “employees.” But you can walk in to a typical hotel and pretty quickly you can feel the vibe of whether people are pursuing excellence or they’re just phoning in their performance. Too often, lots of people forget we’re supposed to be hospitable and that we’re in the industry of pursing excellence in the way we greet our guests, pursuing excellence in the way we clean our rooms, it’s the way we plate the meal, and guests pick up on that. When you pursue excellence, customers and clients end up falling in love with what you do. I want people to do that, and feel like they’re on a winning team. Everyone wants to be on the winning team!

Jeff: Tell me, do you have an opinion about where you think hotel design is headed next?

“High-tech, high-touch, authentic design that really celebrates the locale of our hotels in their cities.”

Larry: Well, thank goodness, I was part of the Joie De Vivre family early on, when along with Kimpton and Ian Schrager Hotels, we were really considered the vanguards of the whole boutique hotel industry. The big guys started looking at this and saying, “Gosh, they’re really creating a buzz out there. These boutiques have higher customer satisfaction, higher loyalty, and they’re actually making more on a RevPAR basis than we are … maybe there’s something to it.” Then the big guys started creating all these lifestyle brands, right? I think the direction as to where it’s heading is just for it to become more and more personalized.

I think those hotels that really succeed are those that celebrate the location where they’re sitting. Hotels that just become vanilla, monotonous … you know, mediocre, are those where you open up your eyes in the morning and you don’t know whether you’re in Boise or Baton Rouge or Boston. But hotels that celebrate the locale, I think those are the ones that are really going to have staying power. That could mean that you’re going to have something really powerful – like a great mid-century modern design, say in Palm Springs or Miami, and you may have more of a Southwest design, say in Albuquerque, but you’ve got to celebrate the architecture as well.

I’ve walked into the mid-century buildings and they try to do a traditional design. Guests may not be able to put their finger on it, but they just know the dots aren’t being connected. Operators and developers are beginning to understand that now. You’re going to see more authentic design as we go forward. Obviously, we’re trying to incorporate more high-tech into these hotels, but if we’re not careful, they could become a little soulless. But it also HAS to be high-touch, so people feel comfortable, so people feel warm. I think we’re moving into the multi-level relationship economy. High-tech, high-touch, authentic design that really celebrates the locale of our hotels in their cities.

Jeff: Whats your biggest source of inspiration in our industry today?

Larry: I look for inspiration wherever I go. I’m a big fan of going to a magazine stand before I fly as I’m on a plane all the time. I love the magazine stands of New York where it’s floor-to-ceiling magazines and you see a thousand different magazines. I’ll pick up different magazines about things I know nothing about – it might be knitting, it might be something about Harley Davidson motorcycles, it might be something about welding – and I read through them to see what those people are talking about. When I start seeing people talking about the same thing in totally different industries and interests, the trends start to emerge.

Jeff: Like you say, the dots connect. What would you say would be one of your proudest professional accomplishments?

“I think that’s one of the challenges entrepreneur’s face, is that we sometimes lack the courage to do the hard right over the easy wrong.”

Larry: The first one has to be when I was awarded to serve in the Special Forces in the Green Berets, because I had no idea when I was growing up that this was something I could ever do or something I would ever do – I didn’t even know what is was. Once I found out – Larry the naïve guy didn’t even know what he had accomplished until after he accomplished it – I didn’t know how rare it was to do that. I barely graduated High School. I’m dyslexic. I used to think that I was stupid, but after having been given IQ tests I found that I have a very high IQ. I found out that the guys who earned the Special Forces also have high IQs, so that was really a source of a sense of accomplishment.

Another was when I received the Ernst & Young Entrepreneur of the Year Award. They came in and really pulled back the curtain. They talked to our clients, they talked to our attorney, they talked to our CPA’s, and they went through our books. When you’ve got an organization like Ernst & Young that gives you that distinction, which is arguably the most prestigious entrepreneurial award given, and they say, “Hey, we believe in you, we believe in what you’re doing, and even more importantly because I got the Emerging Entrepreneur Award, is that, “We believe where you’re going.” To have an organization like that speak of you so publicly, that inspired me. There were times during this past recession when I walked through the office after everybody had left and asked, “Oh my gosh, how am I going to keep this all together?” There were times I’d have to walk up to the awards I had received, just to look up and say, “you know at one point in time, somebody believed in me. I can do this. I’ve got the goods. I have to have the courage to lean into this.” I think one of the challenges entrepreneurs face, is that we sometimes lack the courage to do the hard right over the easy wrong. The hard right sometimes is, sadly, that you have to let people go, or not taking the paycheck, or giving bad news. Between getting the Green Beret and being awarded the Ernst and Young award, those are my top picks.

Jeff: What was your most memorable journey you’ve been on?

Larry: Most memorable journey? Well, life is a journey, it has its ups and downs, it’s a roller coaster. It really started back in 2001, what I call my journey towards enlightenment, when I realized there’s something bigger out there than me. I realized that although I had all these accomplishments, I was making a lot of money, but I just wasn’t feeling satisfied, I wasn’t fulfilled. I knew there was something out there bigger and better for me, but it took probably, nine or ten years before I really had the guts to open my kimono and say, “Here’s who I really am, here are all my flaws. Here are the mistakes I have made. I’m not perfect, I screw up constantly. Love me or don’t.” So, that’s the journey I continue to stay on to this day because it’s hard. We are in a society where people all the time expect perfection, and if they see what they believe may be a weakness or a flaw, they may want to exploit that, so to be able to let go of that and just say, “So what? We’re all broken.” The journey in our organization is that we don’t terminate people because of their flaws or the mistakes they make. Now, if you make the same mistakes over and over again, we’re going to coach you up or coach you out. But we want people to make mistakes because innovation only comes through change and making mistakes and errors. That’s the journey I tend to be on and I know it’s much better to be on this side than the side I used to be on.

Jeff: You’ve embraced your human condition, and what makes us human are our frailties, from which we can also find our strengths. Where will you be on your next day off? It doesn’t even sound like you take days off….!

“I’ll go down in front of our office where there is a spot of grass, take my shoes and socks off and just stand there.”

Larry: Oh, I do! I take days off, not as many as I should. I’m a big fan of hiking, so this Saturday I’m going to be hiking Santiago Oaks Trail here in Orange County. I love going on hikes – getting out in nature. There are times where I realize I’ve not put my feet in the grass just to get grounded for sometimes a week or two weeks, so I’ll go down in front of our office where’s there a spot of grass, take my shoes and socks off and just stand there. I need to get grounded, and that’s what I’m doing my next day off.

Jeff: Tell me who would be your ideal intimate dinner party guests?

Larry: Oh, that’s a great one. There are some pretty obvious ones, I guess. Abe Lincoln would one, as well as Harriet Tubman. They were pretty amazing folks.

Jeff: Harriet Tubman? Because she was fighter?

Larry: She was a badass. She was an absolute warrior. Also, Sara Blakely, I’d love to have her there as well, the founder of Spanx. Let’s see, one more … Elon Musk.

Jeff: Fighters and visionaries. You’re true to your DNA. If you had a boat, what would you name it?

Larry: Oh my god [laughs] Benily. B-E-N-I-L-Y.

Jeff: Is that a family name?

Larry: It’s the blending of my two children’s names.

Jeff: If you won twenty million dollars in the lottery what would you do with the money?

Larry: I’ve traveled to about 45 different countries at this point and have realized that entrepreneurship is really what changes the trajectory of countries and, more specifically, of lives. So, if I had twenty million dollars I’d set up a foundation to do three key things: Entrepreneurship training in third world developing countries, clean water, and education for women and girls.

Jeff: If you were on an island and could only bring three things what would you bring?

Larry: Oh gosh! I’m an avid reader so I would bring a Kindle loaded with books. It would have to have a long-life battery, or maybe be solar powered? I would bring, oh gosh, I love ice cream and sushi. Can I bring those?

Jeff: Sure, why not. Well, sushi, there’s probably ample sushi nearby on an island, but whatever, that’s okay. Last question. If you were eighty years old, what would you tell your children?

“Love deeply and be absolutely tenacious.”

Larry: That’s a great one. I reflect on this all the time. I guess I would tell them to be courageous and to love deeply. There’s a great quote in Winnie the Pooh.

Christopher Robin is talking to the Winnie the Pooh and he says this, “You’re braver than you believe, stronger than you seem, and smarter than you think.” I’d also say, you know, love deeply and be absolutely tenacious.

Jeff: Excellent. It sounds kind of like those are the core tenets of how you live. Thanks for your time and I will look forward to meeting you one day soon, I hope.

Larry: Great, thanks so much.

Jeff Brice Ornstein is the founder and Principal of JBrice Design International Founded in 1989 and headquarted in Boston, MA.