Editor’s note: This cover story ran in Asian Hospitality, March 2017 (Volume 17 #146)
For the next 12 months, New Jersey hotelier Bhavesh Patel will face the challenge of a lifetime – protecting and promoting the American Dream before key decision makers in the upper echelons of government.
The incoming chairman of AAHOA is in an unprecedented position to lead the 16,000-member association to a new level of influence in Washington, D.C., including the White House.
AAHOA’s administrative leadership holds out hope President Donald Trump, with his innate understanding of the commercial real estate investment world, will encourage and support wholesale tax reform that benefits U.S. hotel owners and their family businesses.
Bhavesh said he is hopeful the friendships he and other members of AAHOA have forged with some key members of Trump’s Cabinet over the past five years will have a significant impact on White House policies and the 115th Congress.
“We have great relationships with people in the House and Senate, but we have not yet broken barriers with the Executive Branch,” said Bhavesh, who is set to move from vice chairman to chairman during the association’s 2017 convention to be held April 11-14 in San Antonio, Texas. He succeeds Bharat “Bruce” Patel.
Bhavesh pointed to former House representatives Mick Mulvaney of South Carolina, now director of the U.S. Office of Management and Budget, and Tom Price of Georgia, who is Secretary of Health and Human Services; and Jeff Sessions, a former U.S. senator from Alabama who is U.S. Attorney General, and called them friends.
He also noted the warm relationship between AAHOA and former South Carolina Gov. Nikki Haley, who is the U.S. ambassador to the United Nations and of Indian heritage. In all four cases, AAHOA issued statements supporting the nominations, which have since been approved by the Senate.
More than mere friends, the Trump appointees understand the hotel industry and know the entrepreneurial story of Asian American hoteliers, who dominate the hospitality investment landscape from sea to shining sea. That is all thanks to AAHOA leaders and members who visit Capitol Hill each month and hold two legislative summits a year in Washington, D.C., when hundreds of hotel owners converge on the Hill to meet with lawmakers and discuss the federal policies and pending legislation that would impact their businesses for good or bad.
Bhavesh likes to tell a story about Mulvaney. A couple of years ago, a small contingent of AAHOA leaders and members were visiting members of congress in the Longworth House Office Building when the then-congressman encountered the group in the hall. Recognizing the hoteliers because of their long-term relationship, Mulvaney asked why they were there. “We told him we visit Capitol Hill every month to talk to legislators,” Patel said. “He invited us into his office and spent the next 45 minutes talking to us about issues. As we were leaving, he showed his top 10 list and AAHOA was number four.”
Patel said the experience confirmed the impact AAHOA was making on U.S. lawmakers, educating them about the hotel industry and the effect laws and policies have on their investments as well as small business in general.
Not Easy Street
The 48-year-old hotelier knows a thing or two about running a small business. He is head of ADM Hotels in Cinnaminson, New Jersey, a family business that owns six hotels in its home state as well as Pennsylvania and Illinois. The past 28 years spent building a sustainable enterprise have not been easy for Bhavesh or his family. If blood, sweat and tears were money, they’d be billionaires.
He and his wife, Amita, lived in Collinsville, Illinois, the first several years of their marriage, operating two hotels his father, Ishverbhai, owned with a childhood friend, Raman Patel.
In 1997, Bhavesh and Amita decided to move back to New Jersey, where his father first started in business.
Ishverbhai Patel was born in Barasadi, Surat. In 1962, he moved his wife, Madhuben, and children to England, where he ran a small grocery store. Twelve years later, he visited family members in America and realized it is indeed a land of opportunity. “My uncle said he would help my dad get into business in America,” Bhavesh related. In 1976, Ishverbhai obtained a business visa and a green card. He moved his wife, two daughters and Bhavesh to Wrightstown, New Jersey, where he owned and operated a 25-room motel near McQuire Air Force Base.
“It’s the same old story,” said Bhavesh during an interview at his home, where he was recovering from neck surgery. “It was a rundown property, and we lived in it, fixed it up and ran the motel. My dad did everything himself. I would come home from school and help him. You name it – laying tile and carpet, fixing plumbing, housekeeping, working the front desk, lawn care – he taught me everything.”
In 1990, Patel and his sisters were all attending college when Ishverbhai suffered a brain hemorrhage. Only in his mid-50s, he was hospitalized and spent months in rehab and physical therapy. Bhavesh was in his final semester at York College of Pennsylvania where he majored in business management and finance when he offered to leave school and help his mother with the business, which by this time had hotels in different states. But his mother advised him to return to school.
It was then Bhavesh and his family witnessed the full strength and support of the Asian American community as friends and family stepped in to run the hotels and help his mom at home as she cared for his dad.
After graduation, Bhavesh returned home and picked up the leadership mantle. But life was not going the way he had planned.
“I was 21 and I did not want to get into the hotel business,” he said. “I had a job lined up in investment banking on Wall Street. I grew up watching what my parents went through to build their business, and I did not want to do it. They made beds, cut lawns, worked the front desk at night. My parents had to separate for months at a time because my dad had to travel to his properties and fill in when they could not find the right person to hire. I did not want that kind of life for my future wife and children.”
But Providence has its own way. After Bhavesh met Amita while visiting his grandfather in India, they were married in 1993. By then, Ishverbhai was healthier and able to return to work. The young couple started their life together in Illinois, where Raman Patel and his son, Hitesh, taught Bhavesh how to run branded hotels as well as build new ones. “I learned a lot,” he said.
The accidental hotelier discovered he did not have to run a business like the one in which he grew up. “I was the boss. I had an education, and I could make it my own business.” He and Amita returned to New Jersey in 1997, and with the help of family partners bought a full-service hotel in Runnemede. “From there, we started adding properties,” Bhavesh said.
Today, his parents live in India. Bhavesh is president and principle of ADM Hotels, which takes the first initial of Amita and his sons Dhaval, 20, and Milan, 17.
The most challenging periods for ADM Hotels were the aftermaths of the 9-11 terrorist attacks and the 2008 real estate crash that ignited the Great Recession. Both events crippled the U.S. hotel industry, the former because travel practically came to halt and ADM’s hotels were in airport markets; and the latter because conventional financing dried up. The friends-and-family investment scheme would pool a down payment on a hotel mortgage, but conventional lenders were not in the market to provide the difference.
ADM Hotels hung in there and continued to operate its properties as leanly as possible, finding ways to cut costs while not diminishing customer service. Besides reducing operating costs, ADM re-negotiated rates with vendors and challenged its hotels’ pre-recession property values with local tax assessors. “We tried to wring out every possible drop of excess cost.”
New Business Model
When the economy and the hotel industry recovered this last go-round, ADM Hotels altered its business model. “We used to acquire and hold, but we are switching that strategy,” Bhavesh said. “We are no longer married to our assets. A lot of owners get emotionally attached, but you can’t do that anymore. You have to reevaluate your whole way of doing business.
“We are divesting some of our assets, and we have five new hotels in the pipeline, Marriott, Hilton and Hyatt brands. We also are looking for more sites.”
Staying fluid and growing by churning over investments is the game plan. “We see more opportunity in investing in new builds than existing hotels. Depending on the markets, our goal is to build at least three hotels a year for the next few years. We will hold onto the assets for five to seven years before liquidating and building.” Bhavesh believes U.S. hotel performance will stabilize over the next few years. It will generate gains, but nothing close to the peak in 2015.
ADM Hotels’ development is taking place in the mid-Atlantic states, an area heavy with Asian American hotel owners. It is where Bhavesh first became involved with AAHOA. He had chaired the association’s revenue committee for five years, and served as an ambassador and director of its Mid-Atlantic Region, which has more than 600 members in Pennsylvania and New Jersey. Adjacent is its Northeast Region, which includes another 600-plus members in New York, Rhode Island, Connecticut, Massachusetts, New Hampshire and Vermont.
Besides volunteering with AAHOA, Bhavesh served his community as president of the local Rotary Club and is on the board of the New Jersey Restaurant & Lodging Association, which formed an alliance with AAHOA to advocate on behalf of the hospitality industry in New Jersey’s state capitol. Bhavesh said while the national association exercises much of its political muscle in D.C., it is also active on local and state levels where tax policy and labor laws can burden small businesses.
It was his best friend, Kaushik Patel, who urged him to run for office, and he was elected secretary of AAHOA in 2014. Sadly, Kaushik was not there to celebrate Bhavesh’s success. He died in July 2012 from a sudden heart attack while he, Bhavesh, their wives and friends were traveling in Spain. The loss was life altering for Bhavesh. “We did everything together. He was like my brother.”
Bhavesh finds it important to give back and to do one’s best to build not only hotels and a family business but a community that treasures and upholds Indian-American values of devotion to faith, family and friends.
As chairman for the 2017-18 term, Bhavesh wants to create scholarships for hospitality colleges, form student internship programs with major brand companies and develop a mentorship program through which second- and third-generation Asian immigrants can find honest guidance and support as they come of age and strive to realize their own American Dreams.
Bhavesh Patel at a Glance
Birthplace: London, England
Immigrated to U.S.: 1974 at age 5
Home: Cinnaminson, New Jersey
Family: Wife, Amita; sons, Dhaval, 20, a student at Temple University in Philadelphia, and Milan, 17, a high school junior
Business: ADM Hotels
Education: Bachelor’s degree in business management and finance from York College of Pennsylvania
Community service: Former president of the Runnemede, Bellmawr, Glendora Rotary Club; past president and member of the board of trustees of Charotaria Leuva Patidar Seva Samaj; AAHOA vice chairman, former Mid-Atlantic Regional director.