How We Built A Million Dollar Business That Connects Companies With The Perfect Hotels
Hello! Who are you and what business did you start?
We are Patrick Burkhardt and Rigel Bitterman, Co-Founders of Luxpitality. We work with 4 and 5-star boutique and lifestyle hotels that are either independent or part of small brands. We assist our hotel partners by generating incremental leads focusing on groups, meetings, retreats, and incentive trips.
Our clients consist of all new-age companies that are disrupting their industries such as tech, biotech, pharma, retail, advertising and financial to name a few. These companies need to have meetings for several different reasons such as a reward for crushing their goals, training, retreats for team building and we help them set the perfect stage so that they can continue to amplify their message, drive success and bring people together while enforcing their mission and visions.
Over the past 5 years, we have grown our hotel portfolio to over 650 hotels around the world that all compliment each other and are the perfect fit for our new-age corporate group clients. No matter where they go in the world we have the perfect option for their next meeting or program.
What's your backstory and how did you come up with the idea?
Rigel and I started in the hospitality industry several years ago and always focused on sales and marketing. We both worked for Luxury Independent Hotels, Rigel with Bacara in Santa Barbara and I opened Encore in Las Vegas.
Our paths crossed in San Diego about 10 years ago as several industry professionals felt we had similar styles for developing relationships and creative business for the companies we were working with. We immediately started sharing ideas and became fast friends. We worked for different companies however our thoughts for how we could make a change in the hospitality industry were perfectly aligned.
If you are not familiar with what is going on in the hotel industry let me bring you up to speed... You are seeing a huge shift with the big brands and chains buying the smaller ones. At the same time, you are seeing a shift with new-age clients out there that want a more localized and authentic experience making their program more memorable. The need to work with independent hotels that reek culture and local flare is more important now than ever because it serves two purposes. The first being it’s harder to stand out as the chains become more prominent around the world and the other is that clients want more authenticity and memorable experiences. This defines our brand exactly and this is what makes us Luxpitality.
As most of you know, the road getting to where we are today was anything but smooth. Waking up at 3:00 am to work on Luxpitality then going to work and then going right back to Luxpitality at the end of the day took about 1 year before it would prove to have enough legs to make it a reality. It was at this point my business mentor, first boss, and a long-time friend saw something and decided to invest which created a runway for Luxpitality to take-off!!
Take us through the process of designing, prototyping, and manufacturing your first product.
Designing our services was quite easy. Being in the hotel sales world you constantly see the things that don’t work and those that do. Paying attention to those things that don’t work was crucial to the design of Luxpitality while seeing the gap in the industry that allowed us to carve out our niche. The key differentiator was following your gut, drive, and passion for being creative while manifesting the right partnerships. That is something that no other company can replicate, that is our trademark.
We were so lucky to have the right investor Eric Otto and our CFO Shawn Liu there to support us. Eric knew how to effectively run a business whether it was on the legal or admin side while Shawn supported us with the finances, cashflow, taxes, projections, budgeting, forecasting and everything in between. It allowed us to focus on the rev gen which allowed us to extend the runway and also reinvest quickly.
The part that I love most about designing Luxpitality are the systems and partnerships! All the technology out there has allowed us to make this a reality. Starting with how we stay organized with all the hotels we bring on board to how we deliver the leads to them. The CRM system that is allowing us to constantly work smarter and not harder. The partners we have in place from adding additional services to marketing, web design and content creation. Picking the best people/companies in the industry and forging successful business relationships that otherwise wouldn’t make this possible is what I love most!
Describe the process of launching the business.
Oh man!! It’s nice to reflect back on all this from time to time!! While it doesn’t seem like much has changed, you realize how much you’ve learned and since then being able to do it again with more knowledge and quicker ramp-up time really lets you know that you’ve come a long way. One of the things I love so much is that we are in an era where technology is changing so rapidly, the cost and time to launch a company is greatly reduced.
Back in 2014 when this was still a concept I worked from 3:00 am until I went to bed on Luxpitality and with my day job. It wasn’t until March of 2015 that we officially launch Luxpitality and at that point, we pretty much had everything firing.
It’s ok to make mistakes if you learn from them.
The name Luxpitality came to me after 2 glasses of wine so that was checked off my Asana task list pretty quick… I hired a web dev company and a branding agency to create the logo. I must say that creating everything just the way you want is something I am most proud. It has become a reflection and representation of you and people see that.
You do learn a lot of lessons along the way! We will continue to learn and evolve through each stage and knowing there is no end in sight gets me more excited every day. Something super important is practicing patience and being realistic. I am a dreamer and an idealist which makes reality blah.. This was so important for me to practice, finding a healthy balance. Knowing where to invest your time and energy is huge. Pivoting and minor course corrections while still moving forward and taking it all in knowing that it’s all about the vision and mission you started with. With owning a company you will never stop learning and knowledge will come from all the experiences you put yourself through.
Since launch, what has worked to attract and retain customers?
When we first began we worked with hotels and clients all over the world. We also had a larger sales team of independent contractors. We realized that our bandwidth was being stretched too thin. We pivoted to a more domestic approach and said let’s get this right and then expand. It was great because it organically mapped out the next 10 years just by focusing on geographical markets.
Let’s perfect the market in our backyard and then apply the momentum to the next stage of the business. Since doing so we have become one of the top 5 representation companies in the States, retained almost 100% of our customers while growing through referrals and building an amazing portfolio of over 200 hotels in North America.
I believe that time in the market is also helping us. We have amazing partners and the conversations over time have become easier. There is more content out there for people to research and more people are talking about us. I remember the first hotel partners we approached. It took months for them to buy-in so we pivoted to a model that made our partnership mutually beneficial. It was another aha moment for us and we still use that same practice today.
Social Media and PR really helped get us into the next stage where customers were now reading about us and after a call, they would research who we were. Not just our company but about us personally. Here is a cool article that has been referenced several times.
PR did a lot for us and our name was getting out, however, it became quite costly. I see the value and need for this to build credibility but we had to pivot again. We asked ourselves how are we going to get the word out in a more cost-effective way. Investing money into a copywriter was one and creating a clear brand on social media being another.
Don’t ever stop moving forward, be adaptable and make minor course corrections.
Adding services and asking what else we can help with, from our current clients has been huge. It serves two purposes, one being that we are continuing to give our clients the best service possible and it increases our margins without having customer acquisition costs.
How are you doing today and what does the future look like?
We have hit profitability and it feels great!! All of our investments are seeing returns and the numbers that were once pipe dreams have become the standard. Every milestone we hit we take a look back and can’t believe how far we’ve come. What excites us most is that there is no end in sight and we will never stop growing!
Back in July of 2018 we had surpassed all our numbers from 2018 and pacing over 100% for this time last year for 2020. The very next month, in August, we crushed our best month by over 200%.
The future looks great for us and we are becoming smarter. We have a great team and have really been focusing on building the foundation to scale. Working smarter than ever and becoming as efficient as possible while automating as much as we can.
Through starting the business, have you learned anything particularly helpful or advantageous?
This is such a loaded question. You will learn from absolutely everything you do. It’s ok to make mistakes if you learn from them. That’s why we are where we are today.
We figured out how to turn those mistakes into successes. When you do something right, look back and see how you can do it even better. The harder you try and the bigger the drive the luckier you’ll be.. Timing is everything but if you aren’t constantly moving forward time stays still.
What platform/tools do you use for your business?
- CRM - Hubspot
- Internal Communication - Slack
- Proposals - Proposify
- Hotel Sourcing Platform - CVENT
- Global Distribution System - SABRE
- Itineraries - Tripcase
- Human Resources - Trinet
- Project and Task Management - ASANA
- Graphic Design - Design Pickle and Canva
Hubspot is becoming the nucleus of our operation. Everything from contact management for our entire team, to our deals and automating processes throughout different departments it has shaved off countless hours and kept us more organized than ever.
Internally we use Slack which has helped us cut down on tons of back and forth emails along with a myriad of integrations to help streamline communication not only with our internal team but also with our clients... It’s something that many are not doing yet in the hospitality industry. Project management is becoming a dream with Asana and it lets us stay super organized with everything such as our content calendar for newsletters, social media, and blog posts.
Proposals are now super legit with the help of Proposify and CVENT Proposal Portal. It allows our clients to see all the specifics for their groups as well as all the details about our properties. The cool thing is they get a portal to log into and they can see all the business they are booking directly with Luxpitality. This makes it really easy, especially when it comes to repeat business or booking multiple groups at once. Sabre is our newest integration and it allows us to now compliment all our group booking clients by helping them with individual business travel from air, hotel reservations and all gets sent directly our partner app tripcase.
Thank you to Design Pickle and Canva we have a full-service graphic design department. Design Pickle will turn around big jobs in 24 hours while Canva pumps out the easy stuff that typically only takes around 30 minutes or less.
Finally, we have our new HR department that is completely outsourced. Everything from the best health benefits to 401k, life insurance, expense tracking/reporting, and payroll. All in a one-stop-shop.
What have been the most influential books, podcasts, or other resources?
For books I have always loved Start with WHY by Simon Sinek. It goes deep into the reasoning about why you do what you do and not what you are doing. It’s what made Apple so sexy and DELL well Dell.
For podcasts, I love Gary Vaynerchuk and How I Built This. Gary tells it how it is and built his own brand over the years. He is self-made and someone most of us can relate to. Guy Raz always has the coolest companies that he interviews for How I Built This and to hear the stories of how they got to where they are now is something we can relate to.
Advice for other entrepreneurs who want to get started or are just starting out?
Don’t ever stop moving forward, be adaptable and make minor course corrections. Be patient and focus on revenue generation rather than making sure your business card looks sexy (nobody cares). Hold out from investor rounds if you can and try to bootstrap as much as possible.
Look at partnerships and outsourcing departments to the experts. We have done this with HR, Web Design, Copywriter, Graphic Design and Social Media. We don’t claim to be any of these so why not find the best to partner with.
Are you looking to hire for certain positions right now?
We are looking for people that have a strong background in hotel group sales. Someone that loves to uncover and hunt for new business and someone that has relationships they can tap into immediately. In return you get to be your boss, earn a 10% commission on over 650 hotels, travel the world and essentially run your own business without the headache of owning a business.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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