086 Creating one of the world's top luxury hospitality brands

[Richard Bexon]

Good afternoon, Leo. How are you doing? 

[Leo Ghitis]

Doing great, Richard. 

Thank you for having me on your program.

[Richard Bexon]

The honor is mine, and I'm sure that the people listening to the podcast, I don't know whether they understand how fortunate they are to have somebody that's been so successful here in Costa Rica and creating such a luxury brand on the show. So I'm sure that you're going to be able to give them some great tidbits here. 

[Leo Ghitis]

Thank you. Thank you for the kind words. Once in a while, everyone deserves to get lucky.

And I got lucky this time. 

[Richard Bexon]

Yeah, I think it's a little bit more than luck, Leo. 

[Leo Ghitis]

But hard work, hard work, hard work makes you lucky. 

[Richard Bexon]

It does. It does. That's very, very true.

Well, Leo, I mean, you've been in tourism now for quite a few years. But I mean, what recently has surprised you? And are you guys seeing any trends on your side? 

[Leo Ghitis]

Obviously, everyone had a real tough time. Everybody in the industry had a real tough time during the pandemic. 

But I guess what we did not realize at the time is that long term, this was going to be good for us. Because Costa Rica has always had a very good brand name. But the pandemic made the whole world realize how important the natural environment is.

And things that we used to take for granted, most people don't anymore. And Costa Rica embodies sustainability. I mean, Costa Rica was the first country in the world to kind of be the first country in the world that believed in being green.

And all of a sudden, after the pandemic, everybody realized how important that is. So all of us that have hotels or in the travel industry in Costa Rica are the beneficiaries of the work that Costa Rica has been doing for the last 20 years. 

[Richard Bexon]

Yeah, no, I agree.

And I think that that's only going to continue. Somebody asked me the other day whether, you know, they would ever privatize all the beachfront and sell it off. And I was like, I don't think so.

I think you'd have protests in the streets here. But I mean, Costa Rica's biggest resource is its natural resources, which it does not drill, it does not, you know, take advantage of. Well, I mean, it takes advantage of with regards to national parks and, you know, developing green tourist destinations.

But yeah, I mean, it's not mining. You know, hunting is illegal here drilling for oil is. So I mean, it really makes it a great place. 

[Leo Ghitis]

No, and you know what? What I found really interesting is that I talked to the reservation team. And I asked him when because we're pretty automated. I mean, pretty much everybody goes into our system. 

They check availability. They make their own reservations. So one of the bad parts about this automation is that we don't speak as much with guests.

And in the past, when guests used to call, you know, typically they wanted a break on the price. And so I always ask the reservation team, why do people follow you? And it's interesting that the minority of the people that call now are interested in discussing pricing. You'd be surprised that the majority wants to understand, wants to talk about sustainability.

They want to before they pull the trigger, before they come to visit to stay with us, they want to know what we're doing in terms of sustainability. And I think that's wonderful because it gives me hope. And the younger generation really, really cares about that.

So I think my generation is older and has not done a good job. Protecting the planet. So I think our biggest hope is that the generation that follows us will do a better job.

[Richard Bexon]

You’re the first person I think to mean, I heard about that many, many years ago. But recently, the first person that's ever said that to me is that people are asking about, you know, business sustainability practices. So I mean, that's great to hear. 

[Leo Ghitis]

Yeah,  it's very encouraging. 

[Richard Bexon]

Well, I mean, Leo, why do you think I mean, beyond some of the stuff that you've said, why do you think Costa Rica is a great place to invest? And also, what do you think it offers that potentially North America doesn't?

[Leo Ghitis]

 Really good question. I'm in real estate.

That's my main business. I've been in real estate in the US for almost 40 years. And you know what? I like the US a lot.

I am a big believer in real estate in the US. But Costa Rica has a few things that the US does not have. You have universal health care in the US.

For some reason, we don't. I'll never understand why we don't. And Costa Rica is more accessible. Prices in the US have gotten out of line. 

It's just hard as an investor to make money in the US. There are some pockets where there's opportunity. But the US is pretty tough right now.

In Costa Rica, you have I mean, you have everything going. Prices are still still very good compared to the US. It's one of the few countries in Latin America where there's no crime. 

And that's and that's really important. And then what I was discussing before, I mean, Costa Rica has an amazing brand and people want to be Costa Rica. People respect and admire everything that Costa Rica has done in terms of sustainability.

And that's only going to become more important. Costa Rica is the green country of the world. Costa Rica is a global success story in terms of sustainability.

And people want to be associated with that. So I think it's myself. I have the two options and I am more and more inclined to invest in Costa Rica. 

[Richard Bexon]

Yeah, no, I mean, I think a lot of people are currently looking at Costa Rica to invest just because, again, they feel that the prices are a little over inflated at the moment, that maybe they're at the peak. And, you know, I think people are hesitant to invest, you know, kind of at the peak. But there's an opportunity here in Costa Rica. 

But also there's a leisure lifestyle aspect to that investment as well. So you get to kind of enjoy it. 

[Leo Ghitis]

Yeah, yeah, absolutely.

[Richard Bexon]

Well, I mean, let's just talk about, I mean, your journey with Nayara, if you don't mind me asking.

I mean, you've been able to build probably Costa Rica's strongest luxury travel brand. And I think I've said that to you before. And you were like, you know, it's very difficult to see the impact that you have while you're inside the box as it does outside. 

And I think you guys really have shaped, you know, the luxury market here. And you kind of you're the hair that will be, you know, everybody else is chasing. But I mean, what have been the most challenging hurdles you guys have had to overcome? 

[Leo Ghitis]

Most difficult challenge for us is transportation. 

Yet we've been lobbying the government to basically allow us in partnership with the local airport, which is Prairie Hill, to allow us to bring private jets. And it's very, very difficult for it. And I'm not going to mention names here, but I remember meeting with a prior minister of tourism and basically they told us, if you can find an airline that will fly, then we will consider providing an immigration officer and a customs officer. 

And we were willing to pay for that. So we spent a bunch of time. We found an airline that was willing to provide service.

When we brought the airline to the minister of tourism, she came up with another reason why she wasn't in agreement with that. So that we mean, the kind of clients that we cater to many times want to come with their own private jet. And we and the only place that they can land is Liberia or San Jose. 

And in Arenal, we're two and a half hours away from either airport. And what compounds the problem is that the roads are in very bad shape. So, yeah, if you have backpackers, they don't care. 

But when people are paying over a thousand dollars a night, they expect a different type of arrival experience. So I would tell you that this is the biggest problem since I got involved in Costa Rica almost 15 years ago. I mean, hearing about the road that was going to be the highway that was going to be built and nothing happened.

It's just that part is a real problem for us. 

[Richard Bexon]

No, I agree. You know, I always say to people because they're always I've heard about this and I've heard about that.

And I can tell it happens in Costa Rica. Don't believe anything. You know, but it's interesting what you were saying about the airstrip there, though, that I mean, I don't understand why we wouldn't do something like that if we have all of these marinas that also have customs and immigration people there. 

I mean, what is the difference between a marina and an airstrip? I mean, there really is not that much difference. There's not. 

[Leo Ghitis]

You know, you have no idea how many guests do not come to Costa Rica because they want to fly there.

I mean, they have a private plane or they are on those net jets or charter type situations. And the fact that they have to drive two and a half hours, it's a big deterrent.

[Richard Bexon]

Yeah, well, I mean, just kind of switching gears here a little bit talking about Nayara, I mean, what would you say your guys secret sources? Because I mean, you guys get an amazing average daily rate for being a property that is not on the beach, you know, which is typically people think that they have to be on the beach to get an amazing, you know, ADR. 

But I mean, you guys, I mean, are a trendsetter. I mean, what would you say to your guys' secret sauce?

[Leo Ghitis]

 It's simple customer service, customer service. This is what it's all about.

The philosophy at Nayara is that no guest can ever leave unhappy. And that's part of our DNA. We train and train and we keep harping on that every time we hire someone.

That's the secret sauce.

[Richard Bexon]

 Yeah. How do you guys find, you know, I suppose workers, employees here in Costa Rica? I mean, do you find that easy or do you have to train them? 

[Leo Ghitis]

It's very difficult.

It's very difficult. And it's getting more difficult every day. One of the goals when we started Nayara is that we wanted to give opportunities to the people in the area. 

And so we do everything we can to hire all of our team from the surrounding towns. We used to have a lot of expats in key positions. And over time, we're not doing that anymore. 

And we and the goal is that everybody at Nayara will be a tico. And so what we do is we constantly train the team with the idea that eventually people will be in a situation where they can take over the hotel. And in the case of Nayara, I mean, my partner, since we began this journey, is from Costa Rica, and we always had a resident manager that was from there as an expat.

And I'm very happy that as of I guess two years ago, our resident manager is someone from Costa Rica. He's from La Fortuna. He started with Nayara as a receptionist, and he moved up and he's probably the best resident manager we've had.

And he's a local guy. So that gives me a lot of pride. 

[Richard Bexon]

Yeah, I mean, it's nice to see those opportunities for people, you know, and the ability to develop here. 

And, you know, I mean, even in our business, our head of finance and our head of travel experience were interns, you know, so I mean, the opportunities are there. I mean, as you said, it's hard work and determination. 

[Leo Ghitis]

Yes, absolutely.

Absolutely. 

[Richard Bexon]

Well, I mean, for anyone wanting to, I suppose, build or invest in hotels here in Costa Rica, I mean, what advice would you give them? 

[Leo Ghitis]

I'm inside very close to either Liberia or San Jose. Yeah, because the roads are not getting better.

I think they're getting worse. And there are no and I don't see for many years more international airports. Yeah, and that's been our biggest struggle.

So I would say, don't don't repeat the mistake that we made.

[Richard Bexon]

 Well, you've not done too badly from it, you know, but I agree. I mean, on those roads, I get a lot of people complaining about car sickness just because of the windbacks. 

I mean, I think it's a little easier from Liberia. You know, it's a little bit more difficult from San Jose. But yeah, I think that's great advice to put your property not too far away from an airport. 

So Leo, are there any other projects that you're currently working on that you want to tell us about? 

[Leo Ghitis]

Yeah, obviously, when I'm working on projects, I typically sign a confidentiality agreement. Oh, yeah. You don't need to tell us any of those ones. 

Yeah, no. So I'll tell you without being very specific. So I don't so I don't get in trouble.

We are, I mean, we've been working for several years now on a project on the Central Pacific on the beach. And that that project is getting closer and closer to fruition. I'm hoping that we will be able to break ground in the next six months.

And that's a project that I'm very excited about. And we have a project in Central in another one in Central America, also a beach location outside of Costa Rica. Two hotels under development in the Caribbean.

And in one hotel in the Middle East. So we're staying busy. We're staying busy.

We obviously love Costa Rica, but that but we there's so I mean, so much development happening in Costa Rica and so many hotels that have announced that they're coming to the country. And there's going to be such a large supply of product that I'm a little concerned about building another hotel in Costa Rica. So besides the one in the Pacific, I think we are at this point focusing mostly on the opportunities outside of Costa Rica. 

[Richard Bexon]

Well, I mean, if you inherited $500,000, Leo, this is my last question for you . Again, I really appreciate your time and know that you're very, very busy. If you invested if you inherited $500,000 and had to invest it into a business or real estate in Costa Rica, what would you do with it? 

[Leo Ghitis]

I'll answer the same way that before we started the call, I would ask you to help me with it. You know, you know, Costa Rica, the residential market better than anyone else. 

I mean, every time that I try to get a hold of you, you are inspecting some location, you're on the road, you know what's going on. So anybody who wants to invest in Costa Rica, I think the first phone call that I would make would be for you. 

[Richard Bexon]

Thank you very much, Leo. 

Thank you. Well, Leo, I know you're very busy. I want to appreciate you very much for coming on here.

I think this is going to be a big help for anybody looking to, you know, invest in tourism here in Costa Rica. And I'll put all the hotel details in the description here. And I hope you have a great weekend.

[Leo Ghitis]

Richard, thank you for everything that you're doing for Costa Rica, the lobbying that you're doing on behalf of all of us. I mean, your team is great. So we really cherish our relationship and everything you guys do for us. 

Again, thank you very much and have a nice weekend. 

[Richard Bexon]

Thank you very much. 

Ready to start your investing journey? Contact us now.