When Michael Fuerstman’s caller ID reads “Alan Fuerstman,” he has no idea what type of conversation he’s about to jump into. It could be about scheduling a golf game, something happening at home, or about the specifics of a business deal. And that’s what the father and son team find particularly interesting about wearing multiple hats from a relationship and family business standpoint that has never been forced, seems to only get better and reinforces a great relationship and friendship. No matter what the topic, the duo, often with a snicker, say they always take each other’s calls. Yes, it is quite clear by the ease of the dialogue during this interview that the Fuerstmans have a relationship that works – that they both say was meant to be.
Alan, 60, the founder and CEO of Montage Hotels & Resorts, Irvine, California, and son Michael, 33, who has taken the lead as co-founder and creative director for the group’s second brand, Pendry Hotels, seemingly love talking business, with perhaps the only awkwardness coming when they inadvertently speak over each other. In fact, Michael jokes, “I still can’t believe I even get to speak.”
Of course, the dialogue always sounds easier when Alan can boast a record year of performance across the portfolio, sees steady growth and is just pretty optimistic as he looks at most indicators on both the individual and group sides as “really strong.”
Montage also took on a partner in January when real estate fund Ares Management made a strategic investment, purchasing a minority stake of up to 20% in the hotel group and providing up to US$200 million in future growth capital.
With this infusion, Pendry is in the spotlight, as the first hotel and residence is set to open in San Diego in December. Michael expects the new luxury lifestyle hotel to be the rate leader in San Diego’s Gaslamp District, fetching somewhere around a US$400 average rate. A second, 128-room, high-profile project in partnership with Under Armour founder Kevin Plank is set to open in February at Fells Point in Baltimore in a building dating back to 1914 that was considered the “Ellis Island” of the city. A third project should be announced shortly, with others in various stages of development. Michael says the more accessible brand could also work in cities like Nashville, Austin, Seattle and Portland.
While Alan has given Michael the reins with Pendry, he holds dearly the continued conceptualization of the ultra-luxury Montage brand, which has five hotels and residences open with an average rate north of US$700. It now includes the newly rebranded Montage Palmetto Bluff in South Carolina. The next Montage is under construction in Cabo San Lucas, Mexico, with an early 2018 opening date, and Alan says two more Montage projects should be announced by year’s end with another handful being reviewed, including a project in London he is very excited about.
HOTELS recently spoke with the Fuerstmans to discuss the evolution of the two brands and what it’s like to work together as colleagues who happen to be father and son.
HOTELS: What brought Michael into the family hotel business?
Alan Fuerstman: Mike went to Tufts University. He didn’t study hotels and wasn’t sure that’s what he wanted to do. After college, Michael was working on an Internet startup, just moved back to California and had some time on his hands. I suggested he intern at The Athens Group (a Montage developer), which was developing our hotel in Beverly Hills.
Michael Fuerstman: I sat in some owner’s meetings and had no idea about development as I only saw my dad as a hotel general manager… I saw people sitting around a table with a set of plans talking about developing the Montage Beverly Hills and making these really amazing decisions off a set of plans around a table and thought, ‘What is this?’ I banged down the door of the guy that was running the project and said, “Can I please be a part of this somehow?”
AF: When the Beverly Hills hotel was opening, it was the end of 2008 and it was the worst time imaginable. We had these incredible ultra-luxury condos to sell, so I suggested Michael get his real estate license, which he did and took the lead selling the condos… After a few years of that the natural segue was to go to work for Jason Herthel, who at the time was heading up acquisitions development and overall strategy. Jason is now the president of our company, and Mike went to work for Jason on his development team. That evolved (Michael still reports to Jason) as we were looking at creating a second brand and Michael actually took the lead on the creation of Pendry from a vision and leadership role.
H: As father-son, do you have working boundaries?
MF: Dad, do we have lines and boundaries (laughing)?
AF: No. But that’s a good idea (laughing). No, we have no lines or boundaries. I always stress that it’s a responsibility, not a privilege. Michael has taken on that responsibility really well. He is deeply respected at all the properties – the way he interacts with the staff. And I’ve seen it for years, a special charisma, stopping and getting to know our associates at all levels… I continue to learn from Michael, as well, and especially as the world changes, to have his perspective, and his look at things makes us a much better company.
MF: My dad set an amazing example, too – how you balance work and life, what it takes to create and inspire. You kind of know no other way… It never feels like I’m working for my father. It feels like we’re building something amazing together and it’s a credit to dad for making us feel that way, which is really nice. This is like a therapy session.
H: What’s the communication like between the two of you?
MF: Constant.
AF: And we’ve had to learn to temper it. There was a time when we’d be at dinner and Mike and I would be engrossed in solving the problems of the world on Montage side. We’ve done a better job of either involving everybody (Alan has four children) in those conversations or trying to be a little bit more careful.
H: Any drawbacks to working together?
AF: Actually, I’m surprised how comfortable it has been. In part it’s because we enjoy each other’s company so much. We have a lot of shared interest and that’s an important part of it. I also think having Jason makes a big difference. If there are things where Michael needs critique sometimes Jason’s the guy that will work through more complex issues with him, and that’s a great compliment.
H: Alan, how do you let go of some of the responsibility for a company you started?
AF: With Montage, the aesthetic, design, look and feel is something that I hold on to very closely. On the Pendry side I lean on Michael’s eye – he’s very artistic, has a great flair for the design part, and even when I might not necessarily agree I am more apt to follow his instincts. I’m just trying to balance, let go of some of the things that on the Montage side I’ve controlled so closely.
H: Is there a succession plan?
AF: We are really well situated for growth so we’ll just continue to grow as is. I love what I do every day and I don’t see that changing. I see Michael taking the lead with Pendry, growing that brand and more. Between him and Jason, and the gray hair that I have, we’re really well situated for many years of growth together. There is a succession plan in place… Michael is aware of that.
H: Any advice for other father-son teams?
AF: I have unbelievable respect for what Michael does and how he does it. I have to stop every once in a while and remind myself to give him the reinforcements and the acknowledgment of what he’s doing. There’s a tremendous amount of pressure the next generation puts on itself – greater than what I put on. I see it; I see how hard he works. I see how personally he takes everything, and I have to try to find that balance of support and still not lose sight that he’s my son and enjoy the son aspects of the relationship as well as work. It’s been a very interesting dynamic and it’s just been rewarding for me.
H: How do you make the working relationship work so well?
MF: Know what you’re getting into before you get into it. It’s been easy for me because I’ve always had a great relationship with my dad. I’ve always respected what he does. I’ve always known if I were ever to work for or with him I would be held to an even higher standard. So I think you just have to know what to expect before even considering working together… If you’re lucky enough to have this opportunity, do it. But if you don’t have the special relationship we have maybe consider alternatives, as well.
…But it is funny to attend industry events like the NYU investment conference, doing the panels and the funny grind, sitting through speed dating meetings, whatever party you are packed into, everybody blowing off steam and having beers, and it’s very funny to see my father going through these grinds alongside me.
AF: Part of what makes it work is that we’re not trying to force something that wasn’t meant to be; that we’re not compromising because the son, Michael, is doing something that we’re benefiting from.
MF: There’s no plan for any of this. We’re really fortunate to have a really great relationship, and I’ve liked hospitality. I didn’t think I was necessarily 100% going to, and I loved it. I’m really fortunate. I like what I’m doing. I like who I’m working with. It’s more special that it’s my dad – that we get to grow this thing together. It’s awesome.