Inside the Mini-Boutique Hotel Revolution

In this conversation, we explore the Swepson Guesthouse project with Andrew Llewellyn, CEO and Founder of Super Stays STR, a hospitality innovator based in Louisville, Kentucky. Andrew shares how the Swepson Guesthouse—an expansive 10,000-square-foot property with 15 bedrooms, 10 bathrooms, and the capacity to host up to 42 guests—was transformed into a premier destination for large group accommodations. We delve into the unique features of the property, including its proximity to Louisville’s hottest attractions like Restaurant Row, the Highlands, and Downtown, as well as its tailored concierge services, from private bourbon tastings to charcuterie boards. Andrew highlights the challenges of pivoting the property’s intended use and aligning guest expectations with a focus on comfort, convenience, and group experiences. Whether you're an aspiring real estate investor or curious about innovative short-term rental models, this discussion provides valuable insights into creating memorable, scalable hospitality solutions for large groups.

Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com

Key Takeaways:

• Hospitality experience is valuable when transitioning to real estate. Andrew's background in running restaurants and managing teams helped him in operating the Swepson Guest House.

• Focusing on a specific customer type and not trying to be everything to everyone is important. Andrew targeted large groups like corporate retreats and bachelor parties.

• Providing additional services like trip planning and concierge-style amenities can differentiate a property and lead to repeat bookings.

• Being flexible with the property's layout and usage (corporate vs. leisure) can maximize revenue.

• Anticipating and planning for high guest usage, such as having extra furniture and supplies on hand, is crucial to maintain the guest experience.

• Applying lessons learned from previous business ventures, like using durable and easily replaceable items, helped improve operations.

• Exploring alternative business models, like converting an office space into a boutique hotel, can lead to more profitable opportunities.

• Leveraging connections and marketing strategies like SEO and social media can help attract the target customer base.

About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.

Episode Transcript:

Tyler Cauble 0:00

This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www dot cre central.com to learn more. Welcome back to the commercial real estate investor Podcast. Today, we are live with Andrew Llewellyn. He's the CEO and the founder of super stays STR and we're going to be diving into a really cool mini boutique hotel that he designed in Louisville called the swepson guest house. The link is in the description below. You'll go check it out. If you were ever in the Louisville area, hit Andrew up. It's a really cool project, and I think that it's, it's this next step out of Airbnbs, right? Airbnb is for the craze for quite some time, and they're kind of starting to fall off two boutique hotels. And so what Andrew has done, which we'll dive into today, is kind of created this mini boutique hotel out of this really awesome historic property in downtown Louisville. And of course, to note, he's a CRA accelerator member, which is pretty cool as well. So Andrew, that was a brief introduction of yourself. Man, tell us a little bit more about your background and kind of how you fell into this property.

Speaker 1 1:29

Yeah, thanks for having me on Tyler. That's awesome. Glad to be here. Hey, and the CRE group is been game changing. Not only the coaching calls with you, but the pod I'm in some great guys in there. You know, Marcus is a big guy on your channel. He's in there. It's been, you know, all those guys, Larry, I can go on and on, but what a great value you're, you're providing the community and so big. Thank you to you.

Tyler Cauble 1:55

Thank you.

Speaker 1 1:59

Spend some time early on, had no idea what I was doing at an investment firm, and turns out we were buying bank owned real estate, 2012 it was very manual process. Andrew intern called all the regional banks in the southeast, give me your REO list and compile the list, and then we'd go check out all the properties, make sure they were real. And those guys would call like, Sequoia bank, and, you know, get all the capital they needed, and then they sold those off over the next five years. I had no idea what I was doing at the time. That was crazy to reflect upon how great of a an experience that was, and to now be in real estate, spent some time at Papa John's pizza. That was, that was super fun. Naturally, after that, started a restaurant. Don't ever do that. It was super fun. One one summer, it was an ice cream shop, two ice cream shops. We ran an ice cream food truck with it as well. I had 40 high school girls on staff. So that was like crazy one summer, and we wrapped that up, and now I've got the swepson guest house, and we're working on another one in central business district of downtown Louisville. And, you know, just happy to be here.

Tyler Cauble 3:18

Yeah. Well, let's before we dive into this property, let's dive in more on the hospitality side of things, because obviously, having the restaurant dealing with a lot of employees, that's a big aspect of managing hotel operations, is managing a team and dealing with employees. I mean, what lessons like hospitality lessons did you take out of that experience and bring into your next venture, swepson guest house.

Speaker 1 3:42

Yeah, I think just, you know, really, really, finding your customer type is a big one, and continuing to refine that customer type and not being for everybody. And then, you know, second of all, understanding that you can't really set price. Marriott Hilton, back in the ice cream world, Baskin Robbins, Dairy Queen, those guys set price. So you really have to find some other reason to, you know, convey to the customer on why they should pay you more than they're paying, you know, the kind of call it the commodity price. So we've, we've taken that lesson here and, you know, we, we mostly host large groups. And, yeah, that's, that's the biggest thing. And then, and then the employees, you know, you know, you've got employees, and they can be challenging at times. We've got a ton. We've got, I've got a great crew here right now, an amazing crew, but it's taken a lot of hard work culture building to get that crew in here, get them trained, keep them around. We're figuring, you know, at this point, it's, it's cheaper to keep cheaper to train them. You know, adjust behaviors, tell them. Are great than to try to just find new people and run through people really value the relationship with those, those those people doing the groundwork, the hard work, day in and day out. At this at this hotel, those cleaners. I try to, on Sunday, I try to come in and, you know, see em, you know, they're, they're doing the heavy lifting. That's

Tyler Cauble 5:22

great. Well, so tell us a little bit about this property. I mean, how big is it? How many rooms? How'd you come across it?

Speaker 1 5:29

Yeah, so it's currently, it's 10,000 square feet. We've got 15 bedrooms, 10 bathrooms, five kitchens, six living rooms. Our third floor is really set up to do corporate retreats on the weekdays, and then we completely flip the script on the weekend, and we do like bachelor parties. So split the dining room table apart, beer pong tables. It you know, it's crazy. So it's fun little business. Before I purchased the building, it was an office space and had been kind of like it's kind of a funky little residential type office space, and the first floor needed a complete gut and renovation. So we did that, put two apartments in total of seven bedrooms between two apartments and, yeah, it's, this is where we're at today.

Tyler Cauble 6:29

Yeah, if you're, if you're joining us live, I'll see if I can get you added in here with me. There we go. This is the third floor, right here. Mm, hmm, awesome. Well, yeah, I mean, you could tell it's very well set up for corporate retreats, right? Because you've got this bigger open space. You've got a massive table right here that everybody could sit at. Big Table. It's a really cool

Speaker 1 6:53

yeah, go ahead. I was gonna say big table goes in front of the TV. You can run a proper corporate retreat. AV, hook up. It's, it's the real deal for and it's private. That's the other thing that people like. It's very private. You don't have to worry about people walking in on you can talk about whatever you need to. And then the camaraderie of being in the same place as well. That's

Tyler Cauble 7:17

right, it's really interesting. I mean, saying, you know, 15 bedrooms, 21 beds, you can accommodate up to 42 guests. I mean, how did you, how did you come up with this idea? Like, how did you find the property and what sparked it? Like, you know, what we should do is this mini boutique hotel, yeah,

Speaker 1 7:33

so the whole thing was, like, a complete accident. Like, I, like, I was telling you before I had the ice cream shop during COVID, we had started running a wholesale bakery. Because, like every entrepreneur that's undisciplined, I got bored and was like, we should start another business. And so running a wholesale bakery to coffee shops, and we needed to get out of the back of the ice cream shop. So my father was like, stop paying rent. Like, just go buy something. And I was like, okay, cool. So this, this had a an Airbnb on top it was 50% of the way it is today, and then two long term tenants on the second floor. And I was like, well, that kind of pays the mortgage as we build out the first floor for the the bakery. The city had other ideas. When we we did all our due diligence, talk to them, sure you can put a baker on the first floor. And then during permitting, they changed their mind, and our like, quarter million dollar bakery went to well over half a million dollars. And at four in the morning, I woke up in night sweats, and I'm like, I don't think we can sell that many blueberry muffins to recover a half a million dollars worth of blueberry muffins at wholesale pricing. I was like, I don't think, I don't think the math works. And I thought back to a buddy of mine. He had mentioned he has some Airbnbs. He's kind of a residential real estate guy. And he was like, you should just Airbnb this whole place. And I was like, Luke, like, you're out of your mind. Like, that's crazy. And I was like, I don't know, Luke's mostly right about stuff. So I've got, like, four in the morning and modeled it out. And was like, I saw the net income number. And it was, it was very clear that we should scrap the bakery in the ice cream shop and get in the hotel business, or the, at the time, multiple Airbnbs in one spot. And then through that, just kind of the mind starts running. And I was like, you know, I bet there's large groups that come to Louisville. Let's, let's try to, like, go after those groups and see if there's a business there, and if there's not, we know we can run this five Airbnbs, five times five. But we found a lot of operational efficiency in the large group, so we just kind of kept, uh. You know, digging away at that, trying to pull all the meat off that bone and to get to where we are today. Yeah,

Tyler Cauble 10:06

so, so break that down for us a little bit more. So you've got individual levels or rooms or sections that people can rent out, but you can also rent out the entire place. So kind of walk us through how you've organized that.

Speaker 1 10:18

If you pull our website back up, and then it's got a great little visual on there. Yeah, maybe main page on the main page there, yeah, it's got the three listings right there. So if you see there, we've got three levels. And for our groups, we we have these three listings. And there it's the full building buyout the second and third floor, and then the full first floor, and then the whole building is comprised of five units, five kind of apartment style units. And when we combine those, that's that's when we like those large groups the

Tyler Cauble 10:59

way. So like the way. This is broken out, this is the ground floor, and these are two suites on the ground floor. You've got two suites on the second floor, and then one full suite on the top. That's correct. Okay, yeah, that's really cool. Yeah, it's really interesting. So when you're going through this process, I mean, you know Airbnb is, those are a dime a dozen, right? But this is something that's really taking it to the next step. I mean, how do you, how do you test this model out? Or, how did you kind of underwrite, like, Okay, well, if we're going to do something that could potentially accommodate 42 guests across 15 bedrooms, was it, hey, let's just build it and figure it out from there. Or were you able to find comps? Or, you know, what did you guys kind of walk through

Speaker 1 11:41

originally when it was built out, it was underwritten as five Airbnbs, okay, and, and just with the the idea that we could do these large groups, because I knew we could always fall back on five individual Airbnbs, you Know, we knew that worked. We knew Airbnb worked in Louisville with the bourbon travel. But, you know, it was, like, it was kind of just roll the dice and and throw those listings out there and see if they would book. Yeah. So when you're

Tyler Cauble 12:13

when you're when you're going through your marketing, like, how do you attract large groups, right? Like, are you doing any SEO Marketing? Are you writing blogs, doing videos? Like, what does that side of things look like to attract those bigger

Speaker 1 12:28

bookings? Yeah, yeah. So luckily, my time at Papa John's met some really great people over there, one of them, Bernie. We kind of use him as our CMO on demand, and he's always guiding me. And you know what I need to do next on our website, to drive that SEO, and you know, to attract large groups, to attract bachelor parties, to attract these very specific types of calm customer avatars, that book that need to sleep, 4215 to 42 people, and then we and then, you know, I hope Airbnb is not listening, but we've gotten really good Airbnb that reach out to us there, yeah,

Tyler Cauble 13:18

well, yeah. I mean, that's, that's the like, especially when it comes to boutique hotels. I mean, the big thing that you're wanting to focus on is really crafting the guest experience so they book directly with you the next time that they want to come back and stay. And this was something that you and I talked about early on with this project. That you guys do is it's not just a place to stay. You'll also help plan out the entire trip to Louisville. So can you, can you kind of walk us through that, what that looks like? We

Speaker 1 13:45

kind of, we kind of look at the the guest journey, you know, I guess holistically, is like you're coming to Louisville, and it's like you want, the reason you're going to rent an Airbnb over a hotel is the experience with the group and the togetherness and the privacy. So that's an experience in itself right there that we try to really foster. That's that's one part of it. We try to have a cool place that you want to be. That's another part in a cool neighborhood, again, another part walkable coffee shops, bars. You know, people get dropped off on Ubers, or they they drive. They don't want to hop, you know, in six cars to go someplace every time. And then on top of that, we've all been on that, like that boys trip, and somebody plays cruise director the entire time. And that one poor guy, it's not very fun, because he's like, herding cats. So we try to really solve that problem for our bachelor parties and our corporate groups through kind of travel agent services, again, by planning bourbon tours. You know, events, dinner. Dinner on site, reservations, you name it. We we try to build them in an itinerary, yeah.

Tyler Cauble 15:06

How has that go ahead? Yeah.

Speaker 1 15:10

I mean, again, that's that's kind of our differentiating factor that I talked about before. You know, Marriott won't do that for you, but we will. That's

Tyler Cauble 15:20

right, yeah. I mean, how has that impacted, you know, the guest experience, guest rebookings. Because it seems to me like, you know, one, there's not very many opportunities to do larger group bookings in in most cities, right, in this fashion. But two, having somebody that's going to plan out the entire trip so you don't have to worry about it, I would imagine you get a fair amount of repeat guests, is that the case?

Speaker 1 15:41

Yeah, yeah. We are we? Are we actually? Yes. Funny enough. Yesterday, we booked, we toured a group through that wanted the place for their family for Thanksgiving. And then after those people left, the people that came last year for Thanksgiving called and was like, hey, we want it again. So we were able to, like, use that urgency and all those marketing skills. Of like, I got two groups here that want the same dates, somebody put their credit card in, and they both talked about that. They wanted it for the experience, and they wanted it for the services that we offered. And our and our corporate groups are taking that as well, because with the with the corporate groups, it's a little different. It's like some intern got this thrown on their plate and, like, their jobs on the line of giving these executives an amazing experience in Louisville. And, like, Louisville is a tertiary market, and you're like, I don't even know how to go about this. It's not like Nashville that they've got concierge services and things like that. Yeah,

Tyler Cauble 16:43

you mentioned earlier that it cost. It was gonna cost somewhere between 250, and $400,000 to to build out the restaurant. You nixed that out of the budget. What did it end up like? Roundabout numbers costing to finish building it out as an Airbnb. Because, like you said, it was, it was an office before, right? So this is kind of a conversion project, yeah,

Speaker 1 17:02

I think to do the just the renovation on the first floor was around 450,000 but when you put that against the the income it would have it was, that's right, it was an easy deal to do. Versus blueberry muffin for $1.50

Tyler Cauble 17:20

muffins, versus heads and beds a little bit different, yeah, and a bit less work on the hotel side of things, yeah,

Unknown Speaker 17:29

yeah,

Tyler Cauble 17:31

that's great.

Speaker 1 17:34

I never watched the show bear because it hit too close to home. Oh

Tyler Cauble 17:37

my gosh, yeah. I've heard I've got friends at the restaurant business that are like, that's basically a documentary.

Unknown Speaker 17:43

Yeah.

Tyler Cauble 17:45

Well, I know you're working on, on doing more of these concepts. I mean, what? What lessons learned would you take away from your first version of this? You know, were there things that you were like, we have to do this again, because it was so successful. And what did you have where you're like, you know what? I wish we hadn't done that. And here's why

Speaker 1 18:03

I, you know, I think we spent, there were places that we spent too much time, attention and money on that we thought it would make a difference to the guest. And it turns out, it just doesn't, you know, like little nicer, like door handles, like it doesn't matter. They're gonna get scratched up. They're going to break them. They're going to use them, you know, way harder than than you thought they would. So and you're going to replace, not door handles specifically, but you're going to end up replacing items that get touched and, you know, dishes. That's a big lesson that we learned, that we took from the ice cream shop and brought into here was we have just basic Amazon plates, anything that's like a usable is, like easily findable and replaceable, so that we don't have a hodgepodge of different dishes and cups and plates. It's it makes it easy, yeah, because

Tyler Cauble 19:01

those are getting broken no matter what I mean, with that many guests, yeah, yeah, it's gonna happen.

Speaker 1 19:07

I've got TVs, I've got glasses, plates, furniture, I've got basically a whole nother Airbnb in the in the basement of this place, ready to go for when stuff gets broken. Yeah,

Tyler Cauble 19:17

yeah. It's funny. I mean, that's, that's one thing that you do have to do. We're going through the process right now of ordering furniture for the boutique hotel that I'm doing here in Nashville, and we're like, Okay, let's get extras of everything and put it in the basement, because we know stuff's going to get broken, we need to have something on hand to just be able to replace it so that the next guest coming in doesn't have a lesser experience Because of that, Andrew,

Speaker 1 19:41

and how are you going to source that in 12 to 18 months, when that skew is like no longer made?

Tyler Cauble 19:47

Gone? Yeah, yeah. Andrew, this is, this has been a great conversation. We've got to do a story of the deal on this. Eventually be fun to do a deep dive on this project. What's what's next? What's next? For swepson and super stays. So

Speaker 1 20:02

we've got another one. We're going to call it a 12. It's down in the central business district of Louisville, about two blocks away from Whiskey Row. It'll basically be twice the size of what we have now. Same, same concept. All the learnings applied, and hopefully we can do a story of the deal down there, and get the whole accelerator group up here to stay with me and host

Tyler Cauble 20:29

a get together. Yeah, we'll have to, we'll have to rent the place out for a weekend. Get a bunch of people out there. That'd be a lot of fun. Get out there and check out your properties. Well, Andrew, thanks for joining us. Man, for those of you all that are listening, you are more than welcome to check out the description for the link to swepson guest house. It's, I mean, it's pretty easy. Swepson guesthouse.com go check it out. I think that this is a great case study on really doing the next level Airbnb really kind of leveling it up and creating more of a commercial real estate investment for yourselves. Thank you all for joining us, and we'll see y'all in the next one. This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate, you'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way, go to www.crecentral.com to learn more.