After helping his company launch a venture capital fund in 2015 and recognizing a trend in social group travel, TMC Hospitality CEO and Founder Philip Bates launched two boutique brands to cater to that segment.

TMC Group is TMC Hospitality's parent company and was started in 1985 as a real estate developer. The company developed any real estate type at that time.

"Whatever really made the most sense for them," Bates said.

The company has grown as an enterprise over the decades to the point where today it has a real estate investment arm, a real estate technology venture capital fund, a philanthropic arm that uses modern technology to address brain health and then its hotel development and management arm, TMC Hospitality.

"We're not the biggest company in the world, but we do try to be enterprising and innovative where we can," he said.

Bates joined TMC Group in 2012 and helped launch the venture capital fund in 2015. He saw a lot of big data showing a "real statistical trend in what we now call social group travel."

Social group travel is categorized as people traveling in groups of three or more, he said, something he told TMC Group's board was a "blue ocean opportunity" that the company needed to start investing in through acquisitions and new-builds.

TMC Hospitality was born from that idea and formally launched in 2016, and it brought its first hotel to market in 2018.

TMC Group wasn't in the hospitality space before TMC Hospitality, something Bates said he "really treasures" about the company.

The hospitality arm was formed through data and technology, and also through its founders' travel experiences and what they liked and didn't like about hotel product offerings at the time, he said.

TMC Hospitality's two brands — Bode and Drift — emerged out of that, and while they are similar brands, they are at different price points, he said.

Bates said the company thinks of Bode as being at a 3.5-star price point while Drift is at a 3-star price point.

When forming the two brands, Bates said he thought about what he, his wife and their friends look for when traveling. As avid travelers, they look for a place to stay that's well-designed and has good food and beverage offerings, but it doesn't necessarily need to be an all-inclusive resort where travelers spend all of their time.

"It's something that's a little bit more like our springboard where we can get a great cup of coffee and a handmade Pop-Tart in the morning and maybe start the night with a good cocktail in the evening, but from that, it would become our springboard where we would explore whatever destination we're in," he said.

Bates said Bode and Drift balance price, design, food and beverage and location. As ridesharing services have become more prevalent over the last decade, he said the company was "willing to give a little bit more on location, knowing that once we're in a city ... it's not quite as challenging to get where we want to go."

Bode was the first of the brands formed. It offers standard hotel rooms as well as two-, three-, four- and five-bedroom units. The multiple-bedroom guest rooms have their own bathroom that open into a common area for friends and other large groups traveling together, he said.

There are also activities outside of the rooms that cater to these social groups. Bode properties offer s'mores kits for cooking around a fire, cornhole boards set up outside and more.

Once Bode was open and operating, Bates said TMC Hospitality realized there's a lot of demand for that social group travel just under Bode's price point, which is how Drift came to be.

The first Drift property opened in San Jose del Cabo, Mexico, and was "kind of off the beaten path," he said.

He said a decade or so ago, people would have advised to be at the beach if investing in a hotel in Cabo, but Drift is in an arts district downtown that's a three-minute drive from the beach.

"You can wake up and there's wonderful street food, there's kids running to school on cobblestone streets ... it's just a beautiful place," he said. "And because it's a little further off the beaten path, we can offer it at a 3-star price point."

Labor challenges in the industry have led TMC Hospitality to use technology in operations where possible, which frees up resources and allows the company to focus on the "smaller number of people who are actually on property," Bates said.

"What I mean by that is we want every single person on property who works for us to be guest-facing," he said. "We outsource our cleaning. We don't have things like a check-in desk. Anything that would feel like a more monotonous-type role, we don't really want that."

TMC Hospitality wants to employ people who are "outward-facing," he said.

It's also important to empower associates and train them and make sure they "feel like they have a say in what we're doing," Bates said.

Instead of hiring people in a role such as a bartender and giving them a list of tasks to do, he said TMC Hospitality wants people to own the role they are in. This approach empowers employees to feel like they have a career at the company rather than a temporary job.

For example, the woman the company hired for Bode Nashville's bar, Sidebar, had bartending experience and was manager at a different bar before being hired, Bates said.

"She's a little young, but she's got something about herself that we want to invest in," he said. "We made her the head of that bar and told her, 'You need to run this bar as if it's your bar. You run the social, you hire who you want to hire, you do all of these things.'"

He said TMC Hospitality trained her, supplied her with the brand, marketing and financial support, and told her all she needed to do was focus on the people, product and customers.

"She's really flourished under that, and you can just totally tell when you see her on property that that is her bar. She runs that thing, she owns it," he said. "We were able to do that because we only have 10 or 12 people at that property that we manage, and we can manage those 10 or 12 with that kind of hands-on management that I think causes people to feel like their voices are heard. It causes them to feel like they are valued."