SURESH CHAWLA WAS working behind the counter at his parents’ Mississippi convenience store in 1988 when Donald J. Trump Sr. called.
His father, Dr. V.K. Chawla, took the call in his tiny office and talked with the commercial real estate mogul for seven minutes, even putting Trump on hold so V.K. could deal with an angry customer.
Nearly 30 years later, Suresh of Greenwood, Mississippi, gives a detailed recollection of the call that changed his father’s life and the family’s fortunes in a podcast with Lodging Leaders, in partnership with Asian Hospitality.
Our July issue features Eric Danziger, CEO of Trump Hotels on its cover and tells the story of the birth of American Idea and how Trump Hotels connected with Suresh and his brother Dinesh, CFO and CEO of Chawla Hotels, respectively.
This is the second in a two-part podcast on Trump Hotels’ launch of American Idea, the announcement of the first Scion to be developed and the Asian American hoteliers who will bring the visions to reality. Last week, Danziger shared the vision for the brands and why Trump Hotels targets the Asian American hotel owner community as development partners.
- Listen to Suresh Chawla’s podcast here.
- Listen to Eric Danziger’s podcast here.
Chawla Hotels is building Trump Hotel’s first Scion, a four-star, full-service brand, and franchising its first three American Idea hotels, a three-star brand aimed at capturing and celebrating the essence of a community’s history, culture and lifestyle.
Suresh dishes on what it is like to work with Trump Hotels, including Donald Trump Jr. and Eric Trump.
The team “has a five-star mentality” no matter the segments of its new brands, said Suresh. That level of professionalism and expertise are traits the Chawlas have not before experienced with a business partner. “It will unquestionably set us apart in the four-star and three-star brand markets,” Suresh said.
At the same time, Chawla Hotels has a lot of leeway in designing the new American Idea hotels to best tell the stories of local communities and provide guests with authentic experiences.
He said the Trump team, including Donald Jr. and Eric, are friendly and respectful and they welcome ideas and input from Suresh and Dinesh, asking them what they think of certain concepts. “These are good people.”
The three properties the Chawlas will convert to American Ideas are older boxes. At one of the hotels, the current franchiser wants the company to reposition the hotel to a lesser brand, ultimately reducing the ADR. That “cookie cutter” mindset, said Suresh, “keeps us from maintaining the relationship with that particular franchiser.
“The problem for a lot for hotel developers is it’s difficult for them to inject a lot of money to renovate [existing properties] when they can’t get the right flag to get the return on investment.
“In these particular cases, American Idea is going to allow the developer to inject the kind of money [required] to get it up to the high, three-star brand product, but we are going to be able to get the ROI on that because we will be able to get the ADR and occupancy comparable to the big boys in the three-star market.”
Conversion to an American Idea is expected to range $9,000 to $11,000 a key, depending on the scope of the project.
Chawla Hotels officially began in 1989 with a 40-room Comfort Inn in Greenwood, Mississippi. As the story goes, V.K. was on the brink of losing the franchise license because he could not find a lender. After searching for more than two years for a banker or other investors, V.K. called Trump’s New York headquarters. Trump called him back and advised V.K. to explore SBA financing. V.K. was reluctant to pursue government-backed financing programs because of the reams of paperwork an application would require, but Trump said he had nothing to lose by trying. So, V.K. met with an SBA banker, but it turned out he did not do an SBA loan as the lender approved a conventional loan for $450,000.
Dr. V.K., as he was known to the Delta community, died in May 2015. The business he and his sons built has 17 limited-service hotels franchised with Hilton, IHG and Choice Hotels.
They are building a Scion in Cleveland, Mississippi, and opening an American Idea at an existing property there. They also will convert two hotels in Greenville and Clarksdale, Mississippi, to American Ideas.
Since the news broke in June, Suresh said Chawla Hotels is “getting a lot of interesting phone calls from people wanting to do business with us.” Fellow hoteliers also are reaching out, asking if they should consider vying for a Trump Hotels brand. Suresh’s response: “Heck, yeah.”
Danziger has hinted a pipeline for Scion and American Idea is beginning to form. Some Asian American hoteliers recently visited Trump Hotels in New York to discuss prospective licensing deals.