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Thread: House of Cards

  1. #1
    Administrator Jonesie's Avatar
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    House of Cards

    ml front.jpg

    By the numbers:

    Property owner: Ron S., Holds title and a $3.6 million lean on the building and the property it is on.
    Current Tenants: Mona Lisa hotel group. Incorporated (S.A.) by Tom Lustgraaf
    Managing principals: Tom and Walt Lustgraaf
    Rooms: 93, less than 50 rentable.
    Subsidiaries: Casino, Restaurant, 2 bars, massage parlor, and website **************.com.


    The Mona Lisa started off with the optimism of a community. Finally an alternative to the Del Rey. Ample square footage, elegant lobby, and located in close proximity to other monger friendly hotels. But much like one of those late night diner menus, the picture on the menu looked nothing like what was served.

    What separates this from the many other failed businesses in San Jose, is that it was actually a good idea to begin with. It was something the community actually could have benefited from. It was situated close enough to the other gulch hotels to work in concert to mutual benefit.

    What followed was persistent incompetence, arrogance, and a belligerent sense of accomplishment without a single instance of having made payroll on time. Not to mention the place is in the bowels of the gringo gulch.

    As I mentioned, it started off as a great idea. It had all the pieces for a bright future. To shore up the public relations campaign, Tom went in halves with Bill to buy Crt from a tired Tommy B. And had even made arrangements to buy the much smaller(at that time) competitor Ticaland. Insuring nothing but positive reviews from the entire online community.

    From a management perspective, the bad decisions are too numerous to count. Rooms are old and musty, the food is crap, the water sometimes works, the internet is spotty, and their response is "stay somewhere else if you don't like it".

    So what is it that makes these hapless gringos unable to learn through trial and error?

    My theories are numerous on this question, as the situation is far too murky to gather any accurate information, perhaps by design.

    First, these guys could very well be clueless wantrepreneurs stumbling through the process of flushing their life savings down a Costa Rican toilet. Like many a fool before them. They could actually believe that despite any type of logic, things will suddenly turn around.

    The place could be a criminal enterprise, laundering money for a much larger entity. Which would make sense of their indifference and lack of concern with the ocean of red ink.

    Another theory is the 'investment magnet'. Whereas they keep the place in a constant state of incomplete to draw in a steady supply of unsuspecting investors. This idea worked for Bugsy Siegel, at least for a while. Bugsy managed to sell 600% of the flamingo before it ever opened.

    While the end game is unclear, I don't think anyone inside or outside of that building believes the operation is or ever will be sustained by sales.

  2. #2
    Moderator Speedy1's Avatar
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    Mona Lisa has indeed been somewhat of an enigma. The promise was compelling, to say the least. This was going to be the new Del Rey, and not only that, but a place that really supported the gringo party and monger community and welcomed it. Del Rey has always had that detached air of indifference -- "We don't need CRT, if you don't like the way it is here, then go somewhere else." The difference is that HDR has the horsepower to pull that off. It's great for what it is, and it knows it. Actually, that aloof, arrogant flair adds to the atmosphere and draw of the place -- you ain't nobody if you ain't never been to the Del Rey. Well, that DOES NOT work when you're a startup like Mona Lisa and there's already an established HDR that's been there for years.

    Now, I am not going to even try to comment on the politics of the whole situation, which go deep. Nor am I going to comment on any money flow issues, potential investor scams, or money-laundering scenarios. I am a travel professional, but hotel operation and gulch politics are not my areas of expertise. I don't know anything about that stuff, other than what I need to know for my job, which is not much. I defer to Jonesie in all those areas -- he probably knows more about it than anyone else who has made a post on this board.

    I WILL, however, comment on ML as it relates to the monger and travel guys like me when we're asked our opinion by our clients. Here are some (certainly not all) of the mistakes they've made.

    1) Opening a swank first-floor reception/bar/lounge/casino area, then keeping most of it closed for most of the day.
    2) Said first-floor area looks like a vacant airline terminal. That much empty space has no appeal. Closing it off or generating more business are the only things that would help. Removing many of the slot machines didn't help.
    3) The rooms sharply contrast the first-floor elegance. It's like the old guest bedroom at Grandma's house, complete with grandma smell and decades-old linens. The rooms are nicely laid-out, but need to be refurbished.
    4) The casino is only open from 7pm until whenever. That doesn't work at all.
    5) The casino opened with no ATM. And the first floor had no WiFi. Don't know if that has changed. That was preposterous.
    6) The owners that I met in the lobby bar never seemed to want to talk for more than 30 seconds. "Too Busy." That doesn't make you look like a place that is doing a lot of business -- it makes you look like you're out of control. A busy owner should never start a conversation on the floor that he cannot finish.
    7) They are guilty of something that many owners are guilty of, even LA, SL, and other good places with good owners. They sometimes get bowed up at criticism. I know it must be hard to swallow, but any complaint is a legitimate complaint. "I think that all bathroom faucets should be gold-plated" is, in fact, a legitimate complaint. It might not be reasonable, but the customer is not WRONG. He does in fact think that. ML in particular seemed to take a very sharp attitude of "well, then, just go somewhere else." What they should be saying is, "Well, that's just not practical if we want to keep our room rates low, but I appreciate your comment. I hope that your stay has been otherwise pleasant."

  3. #3
    Administrator Jonesie's Avatar
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    I've said it before and I'll say it once more. The Del Rey stands at the top of the mountain only because it has no credible competitors.

    It's true, my opinion is shaped by my experiences with them. And after these clowns tried to get me deported and had me banned from an unrelated place, I feel no need to keep the secrets of these shady pricks.

    Ok, we're all clear that these guys don't know how to run a hotel and never will. But I don't really think that's their angle any more. I think they want to pass the punk by selling off as much of it as they can before it collapses or gets taped up.

    At some point, Ron is going to realize they're never going to pay him and tosses the shady vagrants out on their ass. I mean, they're no rocket scientists, but they have to see that day coming. Much like many a gringo wantrepreneur before them, they'll gather as much cheddar as they can on the way out, ethically or otherwise.

  4. #4
    Moderator Speedy1's Avatar
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    Quote Originally Posted by Jonesie View Post
    I've said it before and I'll say it once more. The Del Rey stands at the top of the mountain only because it has no credible competitors.
    What, perhaps, ML failed to realize is that you cannot just think "if we build it, they will come", when someone has already built it. A lot of guys who go to HDR don't ever get above the first floor, and ML was marvelously set up initially to compete with that. The entrance and first floor are gorgeous, no doubt about it. All the rhetoric in the world is not going to convince everyone to abandon HDR and start coming to a new place. It takes time.

    I don't care how much money and talent they have, a group of guys in Ft. Worth cannot start an NFL franchise called the "Ft. Worth Ranch Hands" and expect that everyone is going to say, "Oh, well screw the Cowboys then, we're all going over to Ft. Worth!" No, it does not work that way. It takes time to build a reputation and to prove that you can follow through in the long term. ML seemed to give up within a few weeks (maybe months) because they weren't packed tight with girls and paying customers.

  5. #5
    Papa Rotzi
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    I was in CR over Super Bowl week, and brought along 5 friends. One of them waited too long to book a hotel (4 of us booked a week at Amestad- all inclusive - which, BTW, was off the charts). One unlucky bastard booked into ML - a suite, no less. He said it was the worst experience in a very long time. This guy is a world-class shooter and travels the world, including Thailand, central/south America and some other Asian countries, so I know he's stayed in some less than stellar hotels over the years. I agree that the possibilities are there for this property but the current owners/managers do not have a clue.

  6. #6
    kojo96
    Guest
    I've stayed there over ten times now 6 days each shot and I think they are great.

  7. #7
    jstewart
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    I have stayed there many times up to 12 days at a time and to me it is the best place to stay in San Jose.

  8. #8
    Administrator Jonesie's Avatar
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    I'd say they had no shortage of opportunity. And it wasn't even the big mistakes early on. People will forgive mistakes from a new place if there is an attempt to correct it, and if the price is right. The started off with a bang. $49 room rates and an optimistic community. They made plenty of early mistakes.

    At some point, they looked at the reservations for the first month and decided they'd be full regardless, so they raised the room rates to $79. At that rate, they were on the same price point as the Amistad and SL. And at that rate, they were expected to be comparable, and they weren't. People who will forgive mistakes at $49 usually won't forgive them at $79. Add to that the attitude of management when approached with customer complaints and it's a straight downhill roll.

    Are there people that think the ML is the greatest hotel ever? I suppose. There are also people who think San Jose is the most beautiful city on earth. I suppose they get to think what they want.

    I think it is more likely that Tom's plan was to flip the hotel and didn't really have a long term plan to manage it. As it became obvious there weren't a ton of guys looking to invest into a hotel business that didn't own the property and wasn't fully functional, they've been adrift ever since.

  9. #9
    Moderator Speedy1's Avatar
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    Quote Originally Posted by Jonesie View Post
    Are there people that think the ML is the greatest hotel ever? I suppose. There are also people who think San Jose is the most beautiful city on earth. I suppose they get to think what they want.
    Now we might be kind of moving into a whole different argument. As I've posted before, I think that ML has squandered and frittered away the amazing resources that they have at their disposal. I personally can't imagine why anyone would think it's the greatest hotel in San Jose. I CAN understand why someone would think that HDR is the greatest hotel in the world -- EVEN THOUGH I personally do not like it. HDR excels at what it does. I don't see that at Mona Lisa.

    San Jose the most beautiful city on Earth? I can't see that either. That perfectly beautiful city, in my mind, does not exist in the Western Hemisphere -- certainly not in any of the cities normally discussed here, on this board. However, I can see arguments for "most fun city" or "most enjoyable city" or "most relaxing city", even though I might not agree with them.

    If guys are having good times at ML, well, maybe they're starting to get the flick and are turning things around. I hope so. As I've said before, I don't really want to see another establishment that is friendly to us go under. If guys are having a good time there, let's hope they keep it up and continue to attract more dudes and girls.

  10. #10
    Administrator Jonesie's Avatar
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    Speedy, Always the diplomat...

    I'm clearly jaded. Tommy B had the luxury of running crt from Miami. He'd fly in every couple of months, pick up his cash, and fly out the next day. He never had to bug guys for money they'd promised months earlier. His cell phone never rang with an angry Tom/Bill/Jimmy/Jeff on the other end telling him to take down an unflattering review from a member or stay out of their hotel. Such is the disadvantage of being a local.

    I actually thought being a local would be to my advantage, and at some level, it is. But there are liabilities to being so available to the trailer park illuminati.

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