AAHOA Convention: Industry shows its Strong Influence in Washington

AAHOA celebrated its ‘greatest legislative accomplishment’ at 2018 convention near Washington, D.C., where it helped lobby for and won tax reform

Twenty years ago, National Harbor in Oxon Hill, Maryland, was just a big idea. Peterson Cos., a real estate development enterprise, tagged 350 empty acres along America’s historic Potomac River as the best place to build a mixed-use community. The speed at which National Harbor has become a thriving destination marketplace with more than 3,300 hotels rooms is remarkable story of its own.

Across the river sits Washington, D.C., the nation’s capital, making it altogether apropos that the Asian American Hotel Owners Association hold its annual convention and trade show there.

More than 6,500 AAHOA members gathered at the Gaylord National Resort & Convention Center March 22-30 to celebrate their entrepreneurial achievements in business. Stronger Together was the conference theme.

The $200 billion hotel industry in the U.S. has been on a nine-year roll, and AAHOA saw its membership grow to more than 17,700, an increase of 1,200 over last year.

“We are becoming more influential,” Bhavesh Patel, 2017-18 chairman of AAHOA, told the audience during the opening-day general session.

The hotelier from New Jersey told the audience 2017 “was the year when teamwork made our dreams work. Hoteliers wanted to join; lawmakers heard our voice; and partners valued our leadership.”

National Harbor is 10 miles from the Trump White House and Capitol Hill, where AAHOA leadership and its members lobby tirelessly on laws and regulations that impact their ability to do business.

“AAHOA delivers for you, our hotel owners,” Bhavesh said. “This year we have delivered in a big way.”

In December, President Trump and Republicans in Congress enacted the most extensive tax reform in 30 years, which proponents say strongly favors small business and investors in hotels and commercial real estate. The new laws also double the keep on estate taxes to $22 million per couple, enabling next generations to hold onto more of their family’s hard-won wealth.

For at least three years in advance of the historic tax overhaul, AAHOA leadership and members met regularly with “hundreds of members of Congress and told our story,”

Bhavesh said. “The final tax cut is our greatest legislative accomplishment to date.”

Besides reductions in personal income tax withholdings, preserving the 1031 lifetime exchange in real estate transactions and allowing small business owners to exempt 20 percent of their annual revenue will save businesses tens of thousands of dollars each year,

Bhavesh said. “It will help every hotel owner increase business and create jobs.”

AAHOA also honored the 29 people who donated $5,000 each to its political action committee fund. The 30th top donor is Wyndham Hotel Group. At the end of 2017, AAHOA raised more than $720,000 for its PAC. Each PAC campaign runs for three years. By the end of 2018, the third year, AAHOA expects to reach $1.5 million.

Besides getting updates on political power brokering, Asian American hoteliers and their family members spent four days in fellowship with one another as well as those with whom they do business – the more than 400 vendors on the trade-show floor. AAHOA says its trade show sells out almost immediately each year.

The U.S. is home to 55,000 hotels and half of them are owned by Asian Americans, mostly first-generation immigrants from Surat and surrounding villages in Gujarat. Over the past 40 years, South Asian entrepreneurs have played a major role in growing the U.S. hotel industry to $200 billion in revenue.

Among the trade show exhibitors were major hotel franchisers who have come to depend on the Asian American hotelier community to grow new and existing brands and feed their shareholders’ appetites for healthy returns on investment. Overwhelmingly remarkable when one considers that 30 years ago the likes of Marriott International, Hilton Worldwide and InterContinental Hotels Group did not have the Asian American hotelier in its sights.

Franchisers such as Wyndham Hotel Group and Choice Hotels International paved the way for Asian American businesses to grow through franchising, starting with economy and midmarket priced brands.

Today, those companies report strong earnings thanks to Asian owners who have expanded their investment portfolios to include brands across all price segments. Smaller brands such as G6 Hospitality, Red Roof Inn and La Quinta Inns & Suites have expanded their footprints by targeting the Asian American hotelier community with licensing deals.

At the finale of this year’s conference Bhavesh handed over the leadership reins to Hitesh (HP) Patel for the next 12 months. HP is a second-generation hotelier who lived the prototypical story – growing up in a small motel in Texas, which his parents still own and operate. Today, he and his wife Trusha own Capital City Hospitality Group in Austin, Texas.

HP said his mission is to continue to strengthen and expand educational and training opportunities for AAHOA members. New programs begun in 2017 such as a mentorship initiative and an internship project with hotel companies and industry vendors will give members unprecedented opportunities to learn and grow.

Other educational and certification programs to launch under HP’s leadership include a master’s in hotel management program in partnership with several colleges; the revamping of AAHOA’s certified hotel owners program into an online program, making it accessible to more members and launching a certificate in hotel industry analytics.

Another goal of the new chairman is to encourage and uphold more women in leadership. HP said his mother, Laxmi, ran the family motel. While she learned through trial and error, she and other women in similar roles would have benefitted from training and education. HP’s wife Trusha, an MBA graduate and a business success in her own right, was instrumental in getting HP elected as an AAHOA officer four years ago.

Many of the new chairman’s supporters are women, and women are making history at AAHOA.

Set to take the helm in 2019 is Jagruti Panwala, the first woman officer of AAHOA. The Pennsylvania businesswoman ascended to vice chairman last week and will serve as the chairwoman for next year’s convention in San Diego, where she will be inducted as chairwoman of AAHOA.

Biran Patel of Texas on Saturday moved up to treasurer. Newly elected as secretary was Vinay Patel of Virginia. He ran unopposed for the seat, an AAHOA first. Vinay has been an active AAHOA member for more than 20 years and long served as director of its Washington, D.C., region.

VOICES OF CEOS

During its two general sessions each morning, AAHOA featured heads of U.S. hotel companies who briefly shared leadership traits and methods they either look for in building an executive team or in guiding their companies to higher levels of achievement.

Here are the takeaways from three of the presenters.

Identify the Disruptors

David Kong, president and CEO of Best Western Hotels & Resorts, in Phoenix, Arizona.

Each year, the rate of change is faster than the year before. In two years, the world will have 30 billion internet-connected devices. Factor in those who will disrupt the industry as we know it today as well as the generational shift taking place among the demographic of travelers and those who stay at our hotels, and one can say the speed of change is the fastest I have seen my lifetime.

On the other hand, one can say the speed of change is the slowest I have seen in my lifetime. This is how a disruptor thinks. A disruptor looks forward; is proactive not reactive. If you are reactive, you will have marginal improvements, but disruptors think, “What can others do to me to make me irrelevant?”

An example of a disruptor is Takeru Kobayashi, a skinny 23-year-old who in 2001 broke the Nathan Hot Dog Eating Contest record of 25 bun-wrapped hot dogs when he downed 50 hot dogs and buns. Kobayashi did not ask, How can I eat more hot dogs? He asked, How can I make hot dogs easier to eat? He separated the dog from the bun, swallowed the dog and dipped the bun in water, making it easier to swallow without chewing.

The biggest disruptor in the world today is Amazon. Jeff Bezos, founder, said, “Every day is Day One at Amazon.” Bezos thinks like a disruptor but acts like a startup. He hires people who have a do or die attitude and a sense of urgency. Those are the same types of people Kong looks for to work at Best Western Hotels & Resorts.

Get a Grip on Reality

Tom Magnuson, co-founder and CEO of Magnuson Hotels, in Spokane, Washington, and London, England.

Leaders stay grounded in chaotic and turbulent times. They see a problem for what it is and make clear-minded decisions that will sustain the business in the future.

What you think is reality and what is really happening can be two different things. To focus on what is truly happening around you in business, step away from the distractions – your phone and other devices. “The answers are in our guts and in our hearts, but we have to be quiet enough to hear them. Image yourself sitting by a quiet river. It has no beginning, no end. Just this place right here, right now. See how long you can hold this thought all day. Try carrying it with you, and the answers will emerge.”

Don’t allow distractions to keep you from planning for the future. What will you do about that new hotel across the street? What will you do when the town’s main employer leaves? When Airbnb takes your guests? This is the moment your transformation begins.

Since the age of 8, Magnuson worked in his family’s small Stardust Motel in Wallace, Idaho, the silver-mining capital of the world. “Money flowed like water.” As an adult, he and his wife, Melissa, owned and operated a 63-room Best Western along a highway in Wallace. Occupancy was at 70 percent and ADR at $90. “We just couldn’t lose.” But they lost in the early 1990s when the silver mines closed, and a new bypass diverted traffic away from their hotel.

Rather than blame the government or the hotel company, the Magnusons looked around at what was. They saw logging trails being used by snowmobilers and mountain bikers. They went to the state government and convinced it to finance a tourism promotion that promoted Idaho’s “Silver Country” as the “World’s Largest Snowmobile Destination.” Their now-independent hotel, the Wallace Inn, became the 1-800 headquarters for the new campaign.

Eventually, the Magnusons launched their own business that manages the marketing and distribution for independent hoteliers, and Magnuson Hotels was borne.

“As you face your own challenges, ask yourself, what will I do with this struggle that’s been added to me? Think about the river, slow down, ask what really is happening, not what I think is happening. Focus on your present day and create your future. Everything will be OK in the end. If it’s not OK, it’s not the end.”

Educate with Empathy

Geoff Ballotti, president and CEO, Wyndham Hotel Group in Parsippany, New Jersey

The most important trait a leader needs is empathy. To be able to identify with the needs of others and be driven to help fulfill them.

The person who most inspires Ballotti is Christel DeHaan, who founded Resort Condominiums International in 1974 with her then-husband Jon. She eventually bought out his ownership stake.

When DeHaan was a girl, her mother and sisters migrated to Indianapolis, Indiana, from war-torn Germany where her father was killed in a bombing raid. Raised in a family with modest means, DeHaan built RCI through her own wits, determination and hard work. Today her net worth is estimated to be about $900 million.

When DeHaan sold RCI to Wyndham Worldwide in 1996 for $825 million, she did not stay quiet. She founded Christel House, channeling her financial gain toward building schools in underdeveloped countries to feed, clothe and educate impoverished children, giving them and their families hope for the future. She opened schools where her business experienced the most success -- in communities in the U.S., Latin America, Venezelua, Mexico and India.

There is a Christel House in Bangalore and one in Naya Raipur. School buses daily pick up students from their homes, which often lack electricity and clean, running water.

Christel House graduation rates are high, and many students find meaningful jobs in Wyndham hotels and resorts.

Ballotti became CEO of RCI in March 2008, and he served on the board of Christel House. He was named CEO of Wyndham Hotel Group in March 2014.