Daniel Berman, President & CEO, AD1 Global
Invest: spoke with Daniel Berman, president and CEO of property management services company AD1 Global, about key milestones, including 12 new management contracts and a Miami project with Sonesta Hotels. Berman also discussed challenges like rising costs. “Expenses are overwhelming, but we need to keep pushing, control every cent we spend, be very careful with the budgets we approve, and go step by step to do a better job,” he said.
What have been the most significant milestones for AD1 Global in the past 12 to 18 months?
We were able to make the business grow in the last 12 months. We secured 12 different management contracts in 12 months, which is a significant milestone. We also established a new organization within the company and began pushing forward our development site for the construction of mixed-use products. We entered into an exciting new project in downtown Miami, in partnership with Sonesta Hotels, one of the world’s largest companies. Additionally, we were recognized for launching the world’s first AI bartender at one of our resorts, the Wyndham Celebration, and that is something we are still pursuing across the board.
What is the AI bartender project and how does it work?
It’s an interactive situation with the guests. They can not only ask for drinks but also inquire about the property, the hotel, the Orlando area, transportation, weather, and more. She makes suggestions for different types of drinks, and once the person chooses from the menu, she prepares the drink right there in front of them.
One of our goals is to bring technology not only to our guests but also to our employees, so they learn how to use it without worrying about whether it will take their jobs. On the contrary, this technology is here to work for them and help them do their jobs better.
What changes in traveler behavior and hotel demand have you observed, and how has your company adapted to these shifts?
First, there is a big need for innovation and differentiation. People are looking for the newest, trendiest thing. There is a strong tendency toward luxury, including inclusive, affordable luxury. That might sound like an oxymoron, but I think that’s the trend and where we’re heading — luxury, better service, quick response, no wasted time. People want easy check-in, easy check-out, cleanliness, and friendliness.
In terms of demographics, because of COVID, foreign travel and business travel were the last segments to recover. Florida was easy, as we say, because post-COVID, everyone wanted to travel, and they chose Florida due to fewer restrictions. But now, times have changed. People have, to be honest, grown a bit tired of visiting Florida, and we’re starting to see an exodus equal to the incoming movement of people to Florida. An equilibrium has been achieved. Now, you need to be smarter in capturing guests. The dynamics of business travel are likely to shift again, especially with political changes, so we’re excited to position ourselves to capture more of that business segment by offering what business travelers want — high-speed internet, and other technology-driven amenities.
Given the rising costs, labor shortages, and inflation affecting the industry, how is AD1 Global strategizing to overcome these challenges?
That has definitely been the most difficult part. We are starting to achieve occupancies and rates comparable to 2019, but expenses are 25-30% higher. Achieving that balance has been very challenging. I think we’re starting to understand that the only way to achieve it is by offering more. Prices are going to have to keep rising because otherwise, we cannot keep up with the expenses. Expenses are overwhelming, but we need to keep pushing, control every cent we spend, be very careful with the budgets we approve, and go step by step to do a better job.
It’s very complicated, and realistically, it’s been the key challenge for the entire industry. We need perseverance and to be very smart about it, cutting costs wherever possible without jeopardizing employees or guests. It’s all about realizing operational efficiencies, and not at the expense of the guest or the employee. That’s 100% the company’s philosophy.
Could you expand on how customer expectations have evolved, and which amenities and services are in highest demand?
One of the key components is food and beverage. Obviously, cleanliness and friendliness are fundamental to hospitality, but where we’re getting very strong is in our food and beverage offerings, with new things, new experiences. With AI, we’re bringing another type of new experience. In entertainment and maintaining the look and feel of the property, people remember things like the AI bartender. Let’s go back to that hotel with the AI bartender. You see something amazing there. In that hotel, we also have a very skilled live bartender, a real bartender. She understood this so well that, for her, she’s the boss of the AI bartender. She knows how to handle the guest experience and how to manage help from the AI. It’s amazing — contrary to what people might think. The bartender doesn’t feel threatened; it’s a collaboration. At the end of the day, it’s a tool.
I do believe everyone is aspirational. We all want to experience luxury in our lives, but not everyone can afford it. If you can make something possible for the average person, like a fantastic meal with a fantastic view at an affordable price, it’s a win for the guest and a win for us.
Given the company’s expansion along the East Coast, which markets do you see as the most promising for growth, and what criteria do you use to assess new opportunities?
We are getting very strong in the Miami area. We are working on a new project in Hallandale Beach. The entire coastal area in Florida — Fort Lauderdale, Palm Beach, Boca — is a hot market right now, but Miami is obviously booming, especially downtown Miami. We are developing one of the best properties in downtown Miami, which will be called The James Residences by Sonesta. It will feature a luxury, super-luxury residential component and a super-luxury condo hotel. The property will include food and beverage offerings from the best, including a rooftop bar, restaurant, and pool, along with a private club. It’s going to be amazing.
We’re very excited. Not only will it be the tallest tower in Miami, but it will also be the tallest tower in Florida, standing over 1,000 feet high. Imagine the views from the rooftop bar and restaurant on the 80th, 87th, or 85th floor.
What are your top priorities for the next few years, and where do you see the biggest opportunities for growth and innovation?
We definitely want to grow and expand our management company and, obviously, our development company. We’re going to focus mostly on luxury. We have an aggressive, ambitious plan for this year and for the next five years, and we’re very excited. We’re in the same energy and spirit as before the pandemic. We went through a lot of tough times, hard times, but I think that’s what makes us stronger, better entrepreneurs, and better businessmen.
It’s been four very rough years, not just for hospitality but for real estate in general. But we’re here, ready to contribute. We want to create jobs, create amazing things for everybody.
I’d also like to say that it’s very important for the business and investor community to understand that today’s situation requires teamwork. It’s not one against the other. We need to work together to build and rebuild the economy, rebuild confidence, and help rebuild the country from the bottom up. We need to build good things for everybody. Success feels good when shared.
