Don't Mandate! Unleash! How Independence and Opportunity Can Create Success – with David Lunt [Ep. 14]

Linda J. Hansen: Thank you for joining us today. I have a very special guest for our listeners. David Lunt is the president of the Scottsdale Plaza Resort, a premier leisure and group meeting destination. On the property, you will find 404 luxurious renovated guestrooms and suites, five sparkling pools, over forty thousand square feet of meeting space, tennis courts, a fitness center, putting green, JD's restaurant and lounge, and a beautiful salon and spa. It is nestled on 40 picturesque acres in the heart of Scottsdale, Arizona, only 12 miles from the Phoenix Sky Harbor International Airport. I've been coming to The Scottsdale Plaza Resort for various activities, meetings, things for many, many years. I'm constantly impressed with the quality and the absolute culture of the organization. I wanted to ask David to be a guest because, I think, he brings a very unique perspective to how employee and employer education can be so important in creating a culture of leadership, and a culture where everyone is on the same team growing a fantastic, remarkable business. So, David, with that, can you tell us how you-- a little bit about your background, and then how you came to be involved with Scottsdale Plaza Resort?

David Lunt: Absolutely. Thank you for having me, Linda. I've been in hospitality for over 20 years. I worked at Starwood Hotels & Resorts from '98 to 2004. Well, let me just step back for just a second. Arizona native, born and raised in Arizona, a lot of different small towns. Once I graduated high school, I moved here to the Phoenix area, and a graduate from ASU. Then, I started my career. I was first in health insurance, then moved over into hospitality. That's where, again, I joined Starwood Hotels & Resorts in '98. In 2004, I had a great opportunity here to join an independently-owned and operated resort here in Scottsdale, Paradise Valley. I started here in 2004 and I've been here ever since.

Linda: You did not start out running the company. Tell me your first position and how you came up to this position.

David: My background is in finance through ASU and I did go on to get my master’s as well. I started here as a financial analyst and quickly became the corporate controller and the CFO within the first couple of years. From that, I had another five years in that role. In 2013, I was then moved up into a more executive type position with Mr. Dawson with some changes that were made in 2013. And then in 2014, assumed the role as president and eventually CEO.

Linda: David mentioned Mr. Dawson. If anybody has been to Scottsdale Plaza Resort, it's hard not to remember the gentleman who we just spoke about, John Dawson. He was one of a kind and quite an amazing man, but his legacy lives on here at Scottsdale Plaza Resort. I'd like to highlight the fact that it is an independently-owned hospitality property which is very rare. It is not associated with any corporate flag, and they have been extremely successful largely due to their independence. Would you like to touch on that a bit?

David: I'd love to. I boast about it all the time. We're definitely a rare breed. Mr. Dawson was definitely a visionary. He believed that he could do everything just as well as anybody else and could do it even better. We are, again, truly independently-owned and operated. There is no management company that we're affiliated with. There's no flag, no brand, no franchise. We do everything that we see fit to improve our business, and it gives us an incredibly unique opportunity that we can truly affect change immediately without having to talk to anybody, in another state, another country, another brand that could be passed, or another standard that can be passed to multiple properties. We know what's best for us and we can make a change immediately. It does give us a unique opportunity that has led to our continued success of being a truly independently-owned and operated resort, and again, one of the last ones that I'm aware of in the entire state.

Linda: I think, actually, possibly in the entire nation. I think they are a few and far between. If you do visit Scottsdale Plaza Resort, you will be amazed at the immaculate grounds, the beautiful landscaping, the immaculate rooms, the excellent care by the staff. I know it sounds like I'm giving a commercial but it's true. It's actually true. I've seen it firsthand. I think part of that is the culture that was created here. I know Mr. Dawson used to tell me about how many families and generations of families have worked at Scottsdale Plaza Resort. I know you confirmed that this is true. You have several families that are second and third-generation employees here. That's a great testament to Mr. Dawson's leadership, and to your leadership as you've taken his place. Touch on that a little bit.

David: Yeah, it's been a great family environment that we've had and that he's cultivated over his decades of leadership here. This past year, we just had an individual that hit 40 years, hit her 40-year anniversary. Through that 40 years, she has had her kids, all three, work here. We've had several multiple-generational families here and they've all said the same thing. It's a great place to go where you feel like family because, again, outside of when you're with your family at home, this is your family. You're here eight hours a day, forty, fifty, sometimes sixty hours a week. So, it is your second family. We want individuals to feel as such, and we have cultivated that very well. That gets back to our independence to where you, an employee of the Scottsdale Plaza Resort, has the ability to make a difference, and that has added to the family environment that we love to cultivate and the culture that we love to have, which has led to a lot of that longevity where there is over 30% of workforce that has been here for 10 or more years. Out of the 300 full-time equivalent employees that we have, we have about 260 full-time and about 70 part-time associates. On average, about 300 full-time equivalent employees. That's extremely helpful particularly in a difficult labor environment to have that longevity and that tenured staff that truly loves to be here.

Linda: You can see it in the staff. I mean, it's definitely a family of really committed personnel. David touched on the fact that next to our families, our work is really where we spend the most time, and I've always said that all politics is local. I mean, that's not an original phrase for me, but all politics is local. There's really nothing more local than your family and where you go to work every day. With Prosperity 101®, as we know, we never want to be a partisan organization in terms of how we present information to employees, but I know that Mr. Dawson has used Prosperity 101® resources in the past and some of the books I've written before and workshop materials. He told me back then that he was always impressed because when people took the books and things, they took them back and shared with him how-- they shared all of those materials with their families. That whole family atmosphere and that educational component that has been present is really inspirational. Just for our listeners who are wondering if it even makes a difference, we never know. We never know. When we stop to educate our employees or others about the freedoms we have in America and what actually contributes to, say, David's opportunity to provide paychecks for his employees, when we stop to take a little bit of time to help them understand that, we don't know how many generations we're going to impact. Freedom can be lost in one generation. It's upon us to make sure that those generations coming up understand the value of freedom, of capitalism, and how it affects companies like Scottsdale Plaza to be able to provide such security and in such a great environment for their employees. With that, I'd like to just talk about some of the times freedom is eroded by government overreach. David and I, before this interview, we have talked about some of the compliance issues that have come up in the hospitality industry and how it has impacted Scottsdale Plaza, and basically, we talked about government overreach. We've often discussed in these podcasts how government policy makers really do not understand the ins and outs of running a business day to day. They come in with rules and regulations but not realizing how that can impact the bottom line of the business. I asked David to share just a few general things that have truly had an impact. I know you mentioned one, minimum wage. Would you like to touch on that first?

David: Sure, I'd be happy to. In the healthy environment that we have, the economies are raising the minimum wage more so than the government is doing it. Conversations we have within employees...

Linda: Could you just repeat that statement? I don't want people to miss that, "The healthy economy we've had in this current administration..."

David: ...is elevating the minimum wage more so than the government can ever do.

Linda: That's a great quote.

David: It has had such an impact where it's artificially inflating what needs to happen for the bottom line. It's more beneficial to employees to have the economy grow their wages than it is for the government. When we have minimum wage...

Linda: For the government to mandate.

David: Right. When we have the government come in and mandate a 50 cent increase. It's "Do you want to make 50 cents more an hour or do you want to make $2 more an hour?" Of course, employees will say, "Yes, I want to make $2 more an hour." That is the level of growth that we're seeing. What's happening is when the government comes in and artificially inflates the bottom line, of course, we have to look to say, "Okay, where else can we take this from?"

Linda: There's only so much in the pie.

David: There's only so much in there. The wage growth that we've seen to the economy is so much greater than minimum wage does. The minimum wage, again, is causing us to go look for other avenues to try and pull that from. The growth that we've seen, again, has been tremendous particularly in this latest administration that the latest environment that we've seen from the economy has been great. The challenge comes when we artificially inflate that bottom line, we got to look forward to and say, "Okay, yes."

Linda: Where does it come?

David: "Where is it going to come from?" That's where we start pulling from other things for the businesses that continue to prosper.

Linda: I'm sure other employers listening to this podcast can relate to that. I've often said that minimum wage mandates are basically an unfunded mandate upon a business. I've tried to explain to employees that there's only so much money in the pie. And if you take X amount of money out and make it mandated that it has to go towards this, it takes away from everything else just like David said. Now, he was sharing with me before the interview that in this current economy, we're recording this, basically, in 2020, February of 2020, and he said the last three years of the economy have grown his business so much that the workers have had a natural increase. They've had a natural increase in wages without any government mandate making it. The tip wages when a business here at a resort hotel and you have F&B here, Food & Beverage, everything, the employees make so much more per hour because your business is booming.

David: That's correct. If you look at the employees that are making or are seeing the large increases, it is those tip positions which the better the business, the more they're making. They're very happy with the increase that they're seeing. It has nothing to do with what the government is doing to their base wages. It's the tips. It's the gratuities. It's having more guests go through our property day in and day out and book more business. That's where they're seeing the growth, not from what the government is doing to artificially inflate that base wage.

Linda: Absolutely. We talked about some of the other regulatory compliance things you've had to deal with that have really been an overreach in your mind. Would you like to touch on a few of those?

David: Sure, I'd be happy to. It's a policy that is written but then taken out of context where we see things the same but let us address it the way we feel fit or the way we feel is best for the business. For example, smoking. There are rules out there for state rules where you can have an ashtray or a smoking section 20 feet from an entrance or an exit. We don't want that either. We do not want non-smoking guests to be near an entrance or an exit who are trying to eat. We want to push them out as far as reasonable as well. The code at the time was 20 feet from an entrance or an exit. We had an ashtray somehow that got moved six inches, it could have been from one of our employees cleaning the ashtray and somehow just shuffled over time, and we...

Linda: Or it could have been from a guest. He didn't put it 20 feet away.

David: It could have been kicked several times, but to get noted for-- to get warned that this ashtray is 19 feet 6 inches from a door, to me, is just unnecessary.

Linda: Right. They don't take the entire property into context because I know you have other areas on the property that aren't legally required to be a non-smoking area but you create a non-smoking area to make sure you have the best environment for your guests.

David: We do not allow smoking in the pool area. That's for our guest. The government doesn't need to tell us that. We can make that decision, the right decision, for all of our guests what we feel is best. It's rare to even find any smoking section even on property close to an entrance or an exit further than 20 feet now because that's what we want to do. We don't need somebody to tell us that that's the right thing to do. We already understand that and we feel the same way.

Linda: Because you want happy guests. Happy guests come back. They create good reviews, and then everybody's wages go up, and the economy booms.

David: Correct. Another example that we had was the compliance for the pool fence requirements where we have to have self-closing, self-latching doors. Basically, you have to have a barrier around entire property. Two of our pools have rooms that circumscribe the pools, very private type rooms that are exclusive with the pool that would walk out to the back patio. There's already a barrier there which is a front door into one of our guest rooms. The benefit of these rooms is you can walk out the back door and enjoy the pool, and freely go in and out of your guest suite and walk out to this pool. We have to put self-closing, self-latching doors on the backside to those doors that guests used to like going in and out, that becomes an inconvenience to our guests because the door has to absolutely close. It can't be one of those just propped… it's gotta be a hard-closing door. On top of that, we have a self-latching-- an opening that is above that so it's really difficult to maneuver those doors. This is an inconvenience for a guest. Again, there's already a barrier there. We understand the reason for a barrier, but to take it to the next level because of code is somewhat of a-- is unreasonable for these guest rooms that are already private guest rooms and has taken away the ability for adults to make their own choices when they come into our guest rooms.

Linda: Well, you bring up a good point. Adults to make their own choices. Now, obviously, with a property like this, David, is very cognizant of the need to make everything safe for children, safe for families. They're safe for pets. They can accommodate the needs of all the guests that arrive, and that's their desire. They don't need the government to tell them how to do that. So, as we close this interview, what recommendations might you have for other employers to help their employees understand that the role of government is not to mandate all of these things nor to provide financially for everyone but to allow for prosperity to happen. The role of government is to allow and regulations… Steve Moore often says “regulations need to be guardrails, not roadblocks”. As you think about how you communicate that to your employees, what recommendations could you give to other employees who might be wondering how to do so?

David: There are a lot of info there to go. I did want to sit back for a second and like what you praised with Steve Moore about not-- to be guardrails, not roadblocks. We feel the same way. We understand there is a certain role to play for the guardrails, but the roadblocks are unnecessary. Our vision at the resort is creating happiness and helping others live outside the norm. When I say that, that applies to everybody. We want to create happiness. If you're coming in with the family, with a spouse, with the friends, or whatever your purpose is to come to the resort, we want you to be happy. We want to basically have that escape while you’re outside the norm. That means making all the accommodations available to you so you can have a great experience. We don't need somebody else to tell us what those accommodations should be. We know what they are.

Linda: Your guests tell you.

David: Absolutely. Our guests, on social media, which has been tremendously helpful for us, we look at the feedback. We are number 10 out of 78 resorts here in Scottsdale, Paradise Valley. We ranked number 10 on TripAdvisor. We listen to the guest feedback and we respond to it immediately. We don't, again, need somebody else to tell us how to respond to it. We see what the feedback is and we address it right away. Again, that's why we're number 10 right now on TripAdvisor which is the biggest social media website for hospitality.

Linda: Number 10 and rising.

David: Yes, number 10. We've made tremendous strides. Again, we respond to the guests' feedback. Again, we don't need somebody else to tell us how to do that. For the other employers, the conversations we have with employees a lot of times are-- well, it gets back to the culture, too. It's not just conversations, it’s the culture. Are you happy here? That vision we have for our guests also applies to our employees, creating happiness. We want you to be happy. So, when we sit down and we have discussions about various topics that could be political in nature, it's "Are you happy with where you are right now and how things are going? Do you feel that somebody else needs to come and tell you how to basically achieve your happiness?" The answer is always no. We know best how to take care of our business and our employees, and it gets back to the beauty of our independence that we are fully independently-owned and operated. We rely on the employees for the feedback, no different than the guests for the feedback to make the changes necessary to be a thriving business. Though the conversations for employees and the discussion we have further, I guess, would be for our takeaways. For the other employers, it's just listen to your employees, and make sure and educate them and respond to the things that they're asking that are, of course, within reason for the business. Have those open discussions about how we can make these changes without somebody else telling us to make these changes. And again, the example would be minimum wage increase. Do you want to make 50 cents more an hour or do you want to make $2 more an hour? That's a big difference. When they see that, they can understand how we, as individuals, can make better decisions to run our business than somebody else from another legislation, state, another country. And again, I tie it back to our independence that we can make our decisions as we feel best. Guardrails versus roadblocks, I think, is a great way to put it, and I couldn't agree more.

Linda: Helping employees to understand that in terms of not just for your business but for their own lives. I know we talked about the multi-generations that work here too, obviously, they can appreciate the culture here. But you and Mr. Dawson have done a fantastic job of really helping them see the big picture. And if the business is profitable, they'll be profitable. And if there are hindrances to the business being profitable, their job might be at risk. And you've been able to explain that well so I commend you for that, and I wish there were more employers like that. Employees don't always connect the dots, so to our listeners, we have to look and say, "Do our employees understand the constitutional principles that made America great? Do they understand that free-market capitalism is really the path to prosperity? That a business like Scottsdale Plaza Resort could not survive without free-market capitalism." I mean, they're here to make a profit to continue to grow the business, to serve more guests, to hire more employees, to continue to grow. As Herman Cain often says, the ROI on educating employees about these issues is a healthier, more prosperous business. I commend you for that and thank you for being a part of this interview. I'm sure the listeners have enjoyed it. If they would like to contact Scottsdale Plaza Resort, tell them how to reach you.

David: They can contact us locally at our number, it's 480-948-5000, or go to our website at www.scottsdaleplaza.com. Thank you for having me.

Linda: My pleasure. Thank you, listeners. We'll close this episode. Prosperity 101® - Breakroom Economics™.