Attributing much of his success to taking risks at a young age, as well as a bit of good fortune, KSL’s Michael Shannon discussed his extensive 30-plus-year career at length when he received the ALIS Lifetime Achievement Award last month.
Shannon—Chairman, KSL Capital Partners—co-founded KSL Recreation Corporation in 1992 and served as President/CEO. Prior to that, he served as President and CEO of Vail Associates, Inc.— owner of Vail and Beaver Creek Resorts—from 1986 to 1992. The hospitality veteran was interviewed by John Belden, executive chairman, Davidson Hospitality Group.
The following Q&A represents a portion of that conversation.
Belden: You took over Vail at the age of 27, what were the pivotal decisions that you and the management team made to help propel it to a top ski resort and how did they shape your thinking about business going forward?
Shannon: I guess the first thing we did was really learn a model that I call ‘inspect what you expect.’ So for two months as we began I went through a listening tour and brought every manager of every department in and asked them to bring two things with them; their general ledger and their last payroll record. We did balance sheet reviews. So the first thing I would do is ask them to explain who was on the payroll that week and rank them as most valuable to least valuable and then why where they paid what they were paid. Then we went through their expenses and I said ‘tell me why you’re doing this and what you’re trying to achieve.’ It started to create a plan. What we saw was Vail was this wonderful place that had gotten a little tired around the edges. A mindset needed to be developed on how do we create a family-friendly world class resort?
Belden: How did the transition from Vail Associates to KSL Recreation come about?
Shannon: That was really an opportunity for us to meet some people. As we got larger and more successful at Vail all of a sudden people started coming to us and saying ‘hey you guys should maybe take this on the road and go build your own company.’ So we had an opportunity to go and establish KSL Recreation and thank goodness for two of our neighbors—KKR’s Henry Kravis and George Roberts—in the buyout business. They liked what they saw in how we were operating Vail and they said ‘why don’t you go start something else.’ So we went out and started that business with an idea that transforming these one-of-a-kind places and making them become a vital resort city can be done all over the world, and KKR believed in that as well so that’s how we got KSL started.
Belden: Throughout your career you made a number of large-scale acquisitions, such as The Arizona Biltmore, the Hotel Del Coronado and Grand Wailea Maui Resort, to name a few, what drove your success?
Shannon: I think terminal curiosity. My dad grew up in Wisconsin, he was always asking questions, whether it was medicine or politics or the like. So I sort of got that curiosity gene, and I think by just asking why all the time, ‘tell me something.’ I think if you ask people to tell you about their stories they will and they’ll tell you the right answers. So I think it was just being young enough and inexperienced enough that you were willing to ask people for help and they would tell you how to solve the issues. You just kind of took the best from each of these different mentors and tried to roll it into something that really gave the customers some excitement and some joy.
Belden: The Vail decision was so pivotal in your life, what advice would you have for young professionals?
Shannon: If you look at life every five years you get a new job. So if you’re in your 20’s you’re going to have 8 or 9 jobs. The great thing about the country is the freedom to fail. So take the opportunity, give it a try and what’s the downside? There really isn’t a downside. You’ll learn, you’ll have a bigger network of friends and you’ll try it again. I think that’s what I’d tell all of you. If you get the opportunity to do it there’s no real downside when you’re 27 years old, so go for it. You’ll learn a lot and ask a lot of questions, you’ll get better day by day.
Belden: What do you want your legacy to be? What do you want people to know about your body of work?
Shannon: He’s the luckiest guy I know. First of all lucky to get a job at 27 you weren’t qualified to do and do it in a beautiful setting. Most of us in life if we can combine our avocations, what we love to do, with our vocation, what we do do, that is sort of Nirvana. So clearly being lucky because of combining my avocation and vocation and then to do it in a small town like Vail, CO, where you can grow up with your family. You can get up every day and it’s not quite the rat race I used to fight in downtown Chicago and those types of places. You’re just incredibly grateful.
Then I think I’m grateful for over 100,000 of our KSL business associates around the world, who are working hard every day because they have a simple idea of how do you make vacation dreams come true? You do that you get another opportunity. If it wasn’t for them all these businesses that we’ve been able to do wouldn’t be here. I want to thank everybody here in the room who gave me this opportunity for the lifetime achievement award because it’s been a lifetime of gratitude for me to be in the hospitality business.