Want to Make Guests—and Hotel Workers—Fall in Love with Hotels Again? Forget Everything About How to Run a Hotel.

I’ve spent many years in adventure travel and always enjoyed the wide range of hospitality the peoples of the world have offered me. From Bedouin tents to hostels to Italian pensiones, all lodging beguiles me. That’s how I decided I would apply the same methods I used to remake my company, Semco—employee control, small teams, meaningful incentives, and virtually no hierarchy—to the hotel business. 

My first idea was a concept called Nomad Hotels, hotels that not only sat lightly on the land, but were actually temporary. Nomad would upend traditional hostelry by replacing the typical corporate pyramid, which places all decision-making power at the top, with a concept I call the Round Pyramid. The Round Pyramid compresses the distance between leadership and on-the-ground outcomes by putting critical operational choices in the hands of the people making them. It treats frontline workers as competent adults who know better than the hotel executives how to get things done well and cost-effectively. Imagine that. 

To make Nomad happen, I first turned to the logical place: the engineers of Cirque du Soleil. True, they weren’t building Hiltons, but I didn’t want a Hilton. These engineers were accustomed to developing giant structures that could be moved. Nomad would have circus-like structures built to be folded and dismantled so they could fit into a cargo ship. But after deeper investigation, this idea proved to be impractical. Instead, my inquiries led to a daring hospitality experiment: a mountain luxury hotel in Brazil that became an icon because it was built on the principles of the Round Pyramid.

First, I did some market research and asked what people dislike about typical hotels. The answer boiled down to: “They’re designed around the convenience of the management and staff, and only pretend to be centered around the guest.” Think about that. When you stay at a hotel, you deal with a dozen fiefdoms: reservations, reception, concierge, parking, room service, housekeeping, security, cashier, food service, spa, and on and on. None is particularly interested in helping you, just in making sure you follow the rules and minimize hassle for them.

What if I could prove that a different kind of luxury hotel was possible, one that offered its guests quiet, lush comfort, rest, and frictionless convenience at a reasonable price? First principle: one person would manage your entire stay, like a personal concierge or a butler, but with total decision-making authority.

With that, we ported the Semco small-team concept to the hotel. A team of six to eight people would handle everything for our guests, with a single lead as the sole guest point of contact. Every other member of the team would be trained to perform every guest care task at a high level of excellence. We cross-trained everyone as concierge, housekeeper, server, chef, bartender, and barista.

Each team member was assigned to be the sole caretaker of a cluster of five rooms, which meant there were no departments to deal with. This made it possible for us to customize services such as housekeeping to a ridiculous degree. With radios and Wi-Fi-connected tablets, every staffer tracked every movement of “their” guests. If someone saw a couple leave their suite, all team members would get an alert: the suite needed to be freshened up. Taking back pathways (no guests ever crossed paths with staff unless they chose to), the staffer would travel to the suite and give it a light cleaning. Thus all rooms were cleaned or redone three or four times a day. Guests were delighted to arrive to find a tidied, sweet-smelling room with crisp sheets and fresh flowers.

We paid the staff very well for all this work, so no tips were allowed. As a result, guests knew the employees were taking care of them because they were rewarded for doing a good job, not because they were angling for an envelope of cash left in the room after checkout. This led to a healthier energy between guests and employees.

Obviously, we needed top-quality people to run things in this way, so we hired from the nearby area. We kept employees over the long term, and we intentionally avoided people who had been trained in the hospitality industry, who we would have to re-train. We charged guests a flat service charge and distributed those monies equally to everyone.

The quality of our people allowed us to pilot some insanely popular programs. For example, most guests loathe packing and unpacking, so if you were scheduled to arrive on a Friday and lived within a certain radius of the hotel, the hotel would send someone to your home on Thursday to pick up your clothes (freshly ironed, on our hangers) and other personal items and put them in your hotel room closet and drawers, ready when you arrived. After you left, your bags and your clothes (washed and ironed) arrived the next day at your house—all free of charge.

We also instituted some other rather radical changes to the hotel model:

• Guests never had to sign for anything.

• Checking in and checking out? Please. There was no Reception. No one asked for a credit card. Bills were emailed after the stay, and I can count the number of times a guest disputed a charge on one hand. We also relieved guests of the annoyance of check-in and check-out by keeping ten percent of rooms unsold so they could check out when they were ready. 

• Staff got profit participation amounting to 23% of revenue—a huge amount for the hospitality industry. High occupancy rates meant they earned double a typical hotel wage, while low occupancy meant they would make the industry’s base wage. That meant everyone was incentivized to make the guest experience extraordinary and keep them coming back.

When trying to figure out how many employees we needed, we hired two consulting firms. One said we would need 110 employees; the other said 105. By using the Round Pyramid, we launched with just thirty-eight employees. Ten years later, we still had only thirty-eight people, most of whom had been there on the day we opened.

Hotels expect to break even in the sixth year of operation. Our hotel, Botanique Hotel & Spa, was profitable at the end of its second year. It was regarded as the finest hotel in the country, based on TripAdvisor, awards and accolades, and on lists from icons like Condé Nast and Travel & Leisure. We did all that with 38 employees – and no pyramid.