While the challenges of COVID-19 led some properties to close their doors, The Ramble Hotel owner Ryan Diggins partnered with New York City bar Death & Co’s hospitality company Gin & Luck to create new hospitality company, Midnight Auteur.
Diggins opened The Ramble in 2018 as the first hotel in Denver’s RiNo neighborhood – home to Death & Co’s second outpost – just over three years ago and the newly-formed group plans to create and operate additional hotels that are local in style and soul, and seamlessly transport guests between social spaces and retreats.
The Ramble thrived in its first couple of years, boasting 75% occupancy during its opening month and 82% during its first 12 months. It also took a unique approach with the ever-present employment challenge and provided profit sharing to its hourly employees, which resulted in an additional US$4/hour to monthly paychecks during the first two years.
During COVID, The Ramble hotel leaned in to necessary wellness and safety adjustments, while remaining committed to providing guests an escape, with additions such as an in-room mini bar curated by Death & Co, expanded in-room dining options and adding a new walk-up window for to-go items, including coffee and Death & Co batched cocktails.
Diggins, founder of The Ramble Hotel, partner and CEO of Midnight Auteur and partner at Gravitas Development Group, talked to HOTELS about his plans moving forward and lessons learned over the past three years, especially following the COVID-19 pandemic, and how they are shaping decisions for what comes next.
HOTELS: What is the financial arrangement with Death & Co.?
Ryan Diggins: Over the past 15 years, Gin & Luck has specialized in developing the concept and executing cocktail anchored bar/restaurant ventures, one of which is Death & Co. My company, Gravitas Development, has been an urban infill developer in Denver for more than 10 years and most recently developed The Ramble Hotel, while also serving as the management company.
Our new company, Midnight Auteur, is a joint venture between Gravitas and Gin & Luck. This partnership combines our respective areas of expertise into a cohesive new company capable of developing, concepting and managing ‘lifestyle hotels with cocktail anchored hospitality.’
H: What can you tell me about Midnight Auteur development plans? Any deals yet, or close?
RD: Our current property search is focused on the development and/or management of 50- to 125-room hotels in markets that support a healthy mix of business and leisure travel. While we’re skilled in handling the ground-up development and hotel management ourselves (like we did at The Ramble Hotel), we know it’s important to align with like-minded developers interested in bringing an independent hotel operator to their project. Securing foundational management contracts within projects that align with our commitment to delivering design-forward, highly intentional experiences will be critical to our growth.
We have a handful of active deals – some related to the acquisition and repositioning of an existing hotel and others are management agreements with new development projects. We’re being very selective with the first couple properties we pour our time, creativity and passion into – as they need to be absolutely perfect.
H: Are you going to own or just manage?
RD: We anticipate owning and managing about 25% of our properties but are equally excited about the management side of things, which will become a large portion of our business over time.
H: Do you have plans to bring in additional development partners for expansion?
RD: We haven’t aligned with any specific developers yet, but we’ve been proactively seeking companies that we feel understand the independent hotel market, and have a proven track record in high-quality developments. There’s certainly a value aligning with an expert in a particular market that has an amazing piece of land or building, and needs creative direction and operational expertise.
H: Where do you want to expand?
RD: There are about 20 or so markets that we feel offer a healthy blend of business and leisure (specifically drive-to leisure). Some might surprise you and some others are the usual suspects.
H: Give us a little on your hotel background.
RD: Prior to The Ramble Hotel my company was focused on what I call boutique urban infill development. This involved residential and commercial projects, with a core focus on design, placemaking and a high level of tenant curation. Our small office was on the current site of The Ramble Hotel, and as I watched the River North Art District (RiNo) continue to grow – it seemed all that was missing was a hotel (and a local one at that).
Once the lightbulb went off I became consumed with bringing the hotel to fruition. It was a daunting five-year journey to bring The Ramble Hotel into existence, but like any multi-step process you can’t get overwhelmed by the entirety of the undertaking. I had a very clear vision of what needed to happen and I was convinced I was the only one who could execute – this stubbornness proved to be of great benefit to our project.
H: What do you love about the business?
RD: I love what a great hotel can aspire to be. Creating an escape that’s also rooted in connection is inspiring to me. Curating an environment that romanticizes and pays tribute to timeless rituals in hosting is important, and that’s what gets me out of bed in the morning.
H: Can you provide more details about The Ramble concept such as its size, unique services?
RD: We feel that a great hotel is more than building a beautiful space, providing a comfortable bed, or cultivating a lively bar and restaurant scene. Midnight Auteur was created as a holistic hotel experience, one that leverages the experience of two established groups – The Ramble Hotel and the globally-recognized cocktail group Death & Co – to create hotels that fully and seamlessly immerse guests in dynamic social spaces and retreat.
H: There are so many lifestyle brands offering unique experiences. What sets The Ramble and your future plans apart?
RD: What makes a hotel great is highly subjective, so we’re sticking with what we’re passionate about. We love placemaking, we love design, we love cocktail-anchored hospitality and we’re inspired by gracious and warm hosting. We seek to create highly intentional experiences within legacy properties, and if we execute well we know we’ll find our people.
H: Biggest lesson through COVID?
RD: Take a stance and then commit to strategic, decisive and transparent communication around that approach. Our focus was placing the health and safety of our employees and guests above all else. While the respective goalposts of the CDC and federal, state, local governments were continuously moving, we made the best decisions that we could with the aggregated data and quickly pushed it out. We paid attention to global trends and tried to get ahead of problems where we could. We were typically two weeks ahead of local policy mandates, which enabled us to be proactive versus reactive. The health and safety of our employees and guests was placed above all else on day one and has continued to be our driving force.
H: How did the pickup window fair during COVID?
RD: During the throes of COVID it was very successful from a health/safety and guest experience perspective. There were four months when the interior of the property was open to hotel guests only (on some nights as few as 10 guests). These guests had a spacious and distanced dining experience while members of the public dined outside, ordering at the walk-up window, with servers bringing their orders to them. The window is now open Thursday – Saturday nights and we sell canned cocktails, canned beer and canned wine from Death & Co for our summer in the streets event. While this is profitable, I see this as more of a COVID pivot than a long-term solution.
H: What can the wider hotel industry learn from your profit-sharing effort?
RD: I think it’s part of a broader issue. This is how can we create hospitality careers, not just hospitality jobs. This comes by way of better pay, better benefits and more respect for employees in general.
H: Can you explain what the profit-sharing program entails?
RD: We distribute 5% of what we call ‘net cash to owner’ to our hourly employees. Our biggest distribution resulted in an extra US$7 per hour. There are pros and cons to the approach. In terms of attracting employees it’s a tough sell because it’s not guaranteed, but in terms of employee retention, it has been incredible. We are still fine-tuning the best ways to take care of our team, but it’s been a great program at The Ramble Hotel. In 2020, we just didn’t have much profit to speak of. We’ve had some nice distributions in 2021, though.
H: What are your biggest challenges ahead?
RD: Selecting the right property in the right market at the right time. We’re confident in our ability to create and operate something special, but some markets require years of understanding before an opinion can be formed. We hope to fast-track this process while being respectful of the nuances each city, neighborhood and street corner bring.
H: If you were standing in front of a big group of hotel owners and operators, what would be your key message, especially right now?
RD: Independent hotels have a stigma of being riskier investments than branded properties. Our case study at The Ramble Hotel and onward with Midnight Auteur continues to show that when trying to drive occupancy and ADR, a differentiated and irreplaceable experience is the only way to insulate a property from never-ending room supply increase.