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The Next Frontier

The Next Frontier

As he drove along I-75 in Georgia, H.P. Rama couldn’t help but notice the billboard. What he found particularly hard to miss was that the hotel advertisement was emblazoned with four words: “American owned and operated.” It was the late 1980s, and it certainly wasn’t the first time, or the last time, that the Indian-American hotelier would see those words on a hotel sign or advertisement. “I was in Hot Springs, Ark., and I saw a hotel ad in the Yellow Pages and those words were there again,” recalls Rama, who now serves as chairman and CEO of JHM Hotels. “It prompted me to find out why they were putting that on there.”

He discovered that some American hoteliers, particularly in the South, were overtly trying to differentiate themselves from the growing number of Indian-American immigrants who where buying and operating hotels across the United States. Rama was aghast. “I thought that if Americans started believing these advertisements, I, and many other Asian-American hotel owners, would be out of business,” he says. “I needed to do something about it.”

A chance meeting with Michael Leven, a veteran hotel executive who nowadays is president and CEO of Las Vegas Sands, ended up being the catalyst for what Rama wanted to do—put an end to discrimination in the hotel industry against Asian-American hoteliers. “Mike understood what I was talking about,” Rama says. Leven is Jewish and has spoken often about enduring prejudice in the business world.

Together, Rama and Leven began what became the Asian American Hotel Owners Association with 12 members and a conference financed entirely by Leven. Rama served as the first chairman. “We formed it and a few other hoteliers were with us,” Rama says. “I traveled the country with Ravi Patel, president of SREE Hotels and the association’s second chairman, to kick-start things and make people understand what we were thinking. That’s how AAHOA was born.”

The association, which will celebrate its 25th anniversary next year, has grown to 11,165 members while becoming one of the most influential organizations in the hotel industry. In addition to continuing to focus on education, community service, and services for members, AAHOA will be making bold moves on the advocacy front in 2013.

LAYING A FIRM FOUNDATION
The days of Rama’s grassroots efforts to form an association with the purpose of fighting discrimination have long given way to a modern-day, corporate-like entity striving to create a better business environment for the hotel industry as a whole. “We’ve evolved. Back in 1989, it was about achieving some level of equality in the industry,” says Tarun Patel, principal at Silver Creek Hospitality, who served as chairman of the association in 2009. “Now our perspective is that we are the majority of the industry. We’ve achieved equality. It’s about how we can help our peers and advance our industry’s goals.”

Getting to this point has been a journey that has seen the association go from an outlier to a bit of a rebel—it’s ruffled more than a few feathers over one of its pet issues, fair franchising—to an influencer in the industry over the last two decades. “The first generation guys were just trying to build a legacy,” Patel says. “The second generation knows we have a great foundation and we’re looking to preserve it and grow it.” The association has sustained a pace of moderate growth by adjusting its core structure for the long haul. In the early days, AAHOA operated on the changing agendas of revolving chairmen. Now AAHOA runs on a governing model that carries over from leader to leader.

“There’s a strategic plan in place now. There’s policy and procedure,” Patel says. “Before, it was a simple bylaw structure. Chairmen tried to accomplish everything they could in nine months and then the next one came in and did his thing. Now when a new chairman comes in, he picks up the strategy.” Vinay Patel, senior vice president of operations and sales at SREE Hotels, agrees that the adjusted governing model has made a significant difference. “There’s more continuity,” he says. “They come in as a secretary and move into chairmanship so they are already involved in the strategy and they can continue it.” AAHOA’s new governance model synchronizes the calendar of regional meetings, legislative summits, the annual convention, and other events to increase participation and prompt more members to get involved. At AAHOA’s recent convention, Alkesh Patel, the 2012 chairman, said, “Our goal with the governance model is to implement procedures to help AAHOA function even more efficiently and more professionally on behalf the members.”

Besides making AAHOA more efficient, these changes have also helped the group become more effective in working with the rest of the industry, in particular associations such as the American Hotel and Lodging Association and the U.S. Travel Association (USTA). Rama also served as chairman of AH&LA in 1999 and Tarun Patel sits of the board of USTA. Many other AAHOA members are members of and sit on committees at both organizations. “When I was chairman of AH&LA we felt like we built a bridge with the two associations,” Rama says.

TO WASHINGTON AND BEYOND

“What we’re seeing now is a move more toward the legislative issues in the industry,” Vinay Patel says. “The association is looking to gain more influence.” Tarun Patel, who has chaired AAHOA’s governmental affairs committee for the last two years, agrees that the focus on legislative activities has increased over the last few years. “I think it’s our untapped frontier,” he says. “We’ve really started to turn the wheels on that.” That movement includes increasing AAHOA’s presence in the nation’s capital. The association is investing and staffing a satellite office in Washington, D.C., as well, according to Patel. One of the issues the group is looking to address is SBA financing for hotel owners, increasing the availability of loans and streamlining the process for borrowers. “We have a bunch of issues, but that’s one of our main focus items,” he says.

The majority of AAHOA members own franchised hotels, so the group will also continue its leadership in fair franchising. AAHOA releases progress reports on fair franchising in which leading franchisors and membership organizations identify the most important programs they have implemented to support their franchisees and members. They also respond to specific franchising issues and concerns raised by their franchisees. Alkesh Patel said AAHOA aggressively worked for the passage of California’s bill to protect hotel owners from abusive franchising practices and helped move ahead a Universal Franchisee Bill of Rights ratified by the Coalition of Franchisee Associations.

While Washington becomes more of a focus for the association’s board of directors, many of the second generation leaders of AAHOA are also focusing on growing beyond small hotel owners and operators and continuing to build their companies into large, multi-property conglomerates. “I think legislative issues are important, but many of the next generation hoteliers are looking at building larger hotels beyond select service,” Vinay Patel says. “They’re looking at issues within the capital markets, building REITs. Not that there aren’t Asian-American hoteliers already playing in the large full-service space and running REITs, but it’s a small percentage. We want to have more representation in that space. When you talk to the younger hoteliers, that’s the direction they’re leaning and that’s their focus.” He says international business is also a growing focus among the younger generation of Asian-American hoteliers, particularly growing the success rate of hotels in places such as India and China, as well as some of the European markets.

Over the last two decades, Asian-American hoteliers have made a significant impact on the hotel industry. No longer an outlier in the hotel industry, Asian-American hoteliers have already established themselves as leaders and influencers in the hotel industry. “It went very fast,” Rama says of the last two decades. “We feel like we have accomplished our mission.” Now, it’s on to conquering those next frontiers.

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