Dillipkumar “Danny” Patel, center, CEO and founder of PeachState Hospitality LLC in Warner Robins, Georgia, is flanked by Rajiv Bhatia, president, and Ricky Raman, his son and chief operating officer. Both Bhatia and Raman joined PeachState in 2017 to help Patel reposition the 30-year-old company into a larger, more-sophisticated version of itself that will one day include third-party management. (Photo: Ivory Johnson, ICU Studios Inc., for Asian Hospitality)

June 2018

For years after the real estate crash of 2008, PeachState Hospitality LLC held off on developing new hotels. In the years immediately following the dawn of the Great Recession, the Georgia-based hotel company had to open the hotels it had under development at the time. Then it rested, biding its time.

Over the past two years, PeachState Hospitality has re-awakened – launching itself from the ashes of the downturn as a new company, a 2.0 version, if you will. It put shovels in the ground in 2016 and 2017, and so far this year it has opened a new hotel about every 45 days. Its new-development portfolio of about a dozen hotels exceeds more than $350 million in financing from lenders as well as a small, tight group of private investors.

As the hotel-investment enterprise expands its presence in the Southeast U.S., PeachState Hospitality is carving a footprint in Texas and searching for growth opportunities on the West Coast. Once it reaches a portfolio of 30 to 40 hotels PeachState will add to its story another chapter as a third-party management company – the 3.0 stage.

During the time PeachState was not developing hotels, it was building a new company. One positioned to take advantage of the industry upturn its leadership knew was on the horizon.

“There was a growing sense that after the meltdown, we had to change,” said PeachState CEO Dilipkumar “Danny” Patel, founder of the nearly 30-year-old enterprise. “Our business philosophy has changed. In a larger market, you can sustain a business, but in a smaller market, you get hurt.”

Leading the strategic revival with Danny are his brother Hitesh “Harry” Patel and brother-in-law Bharat “Bobby” Patel, as well as some well-seasoned new blood in the form of Rajiv Bhatia, a former Wyndham franchise executive who joined PeachState in 2017 as president.

What truly defines the refreshed company, however, is the debut of Ricky Raman, Danny Patel’s son who officially joined the family business last year after graduating from Mercer University and working for Marriott International for several years in its franchising division. Raman, 27, is chief operating officer of PeachState, recently promoted from vice president of growth management. He is working toward his MBA at the University of Georgia’s Terry College of Business.

“Ricky is clearly the rising future of PeachState Hospitality,” said Ramesh Gokal, who helped the company define its new mission and craft its resurgence.

PeachState 2.0 is the result of months and months spent in long-range planning and launching its modern-business strategies. Gokal came on board in 2016 at Danny Patel’s urging. Gokal, 72, is an industry veteran, owner and consultant who worked for HFS and Wyndham.

“While Danny might be considered a first-generation hotelier, he is really second-generation as far as the industry goes,” Gokal said. “A lot of us started in the early 1970s, and Danny came into the industry later on.”

In his early 50s, Danny Patel, “is full of energy and quite the inspiration for the company,” Gokal said. “Ricky is now clearly regarded as the next-generation hotelier.”

PeachState Hospitality LLC is significantly growing its staff both at its new hotels as well as at its headquarters in Warner Robins, Georgia. The company’s leadership and administration team members include, front row, from left: Brandy Bolden, regional manager; Jamiya Wallace, accounting manager; Rajiv Bhatia, president (seated); Danny Patel, chief executive officer; Ricky Raman, chief operating officer (seated); Evelyn Jones, procurement manager; and Debra Bouvia, director of operations. Back row, from left: Harsh Trivedi, director of innovation and market intelligence; Makeba Lawhorn, director of human resources; Travis Walsh, regional manager; Harry Patel, chief financial officer; Justin Tripp, revenue manager; and Salinda Kay, director of sales & marketing.

New Mindset

The history of PeachState Hospitality and its founders is, of course, similar to many Asian American hotel businesses. The realization that a family business needs to change to remain sustainable for the next generation is the first step toward longevity but taking the initiative to make it happen requires a whole other mindset.

To explain the old school of thought, Gokal shares a memory: “When I was still buying hotels in the 1970s, I had an opportunity to buy a Best Western for $1.1 million. I asked friends what they thought about going into this, and a very good friend – who is highly successful now – said, ‘Franchised hotels are not for us, and we definitely don’t buy anything over $1 million.’

“I think of that and think of now and that PeachState is on track to be a $1 billion company in the next 10 years. It is exciting as a first-generation hotelier to see that happen. The younger generation has the skills and ability to do that.

“The learning experience for us is to trust in the abilities of the next generation to take us to the next level,” Gokal said.

“We have turned our growth strategy upside down,” Danny Patel said. “Used to be, I would make all the decisions.” Gut feelings do no longer rule the day at PeachState. “Now we have established a formal approval process. Any project has to pencil out,” he said.

Reinventing PeachState Hospitality, or any company for that matter, takes more than expanding the executive ranks, adding experienced leadership, recruiting new blood and opening new hotels. Fundamental transformation must happen from the inside out, Gokal said.

To that end, PeachState’s new mission statement, “Delivering meaningful experiences,” is targeted at more than guests. It is the mantra that hums through the entire company – from the CEO to an entry-level employee.

“We asked ourselves, ‘Who do we want to be and how do we get there?’” said Raman, who would travel from Marriott’s headquarters in Bethesda, Maryland, to Warner Robins, Georgia, to participate in forming PeachState’s new business strategy.

The fuel for growth is not so much about raising capital and researching markets as it is recruiting the right people to work at PeachState’s headquarters and in every one of its hotels, from the general manager to housekeeping to maintenance to the breakfast attendant.

Creating a cultural of inspiration across the board is critical to the success of PeachState 2.0, Gokal said. “You should inspire every one of your people because you never know where the next best idea will come from.”

Danny Patel, who served as chairman of AAHOA in 2007, has leveraged his relationships with franchisers such as Marriott to grow PeachState. But after the licensing contract is signed, he said, “you have to be in the position to deliver. I tell Ricky that in the lodging community what you speak is what you deliver.”

The CEO encounters a lot of up-and-coming hoteliers. “If there is one weakness with this next generation is that they talk much, but they have to do.”

One tried-and-true rule of thumb that will never get old, Patel said, is to keep your promises. “Marriott is a stakeholder, our employees are stakeholders, our investors are stakeholders. Before we go into a market, we have to understand the concept. When we raise capital, be aware of the kinds of promises we make. And we have to deliver first to our investors. It is do or die.”

Bridging the Divide

Fulfilling expectations is the most challenging aspect of PeachState 2.0, said Bhatia, who signed on as president at Gokal’s urging.

During the frenzied development pace, PeachState goes market by market, project by project to determine the best and highest use of its resources. Finding land and getting to market are not the most difficult steps of business expansion. Being sure it has the systems in place to do what it says it can do is what seals the deal and keeps the business thriving.

“When I first came to PeachState,” Bhatia said. “I looked at what had been achieved so far and what is ahead. First comes the vision, then you build the reality around the vision. In operations, you come up with strategies to move the plan forward as fast as possible.”

Although PeachState took a breather of sorts during the recession, that’s not a growth strategy. “Growth cannot be a hard stop and a hard start,” Bhatia said.

He said the strength of PeachState is its razor-sharp development chops. Bobby Patel, an engineer by profession, runs the construction division while Danny’s design-and-build creativity provides opportunities for operations to excel. He thinks about the future value of an asset and will design beyond brand standard. A six-foot-wide hall expands to seven feet. A standard size room gets bigger.

That is admirable, indeed, but in today’s industry, designing and developing in advance of executing a management plan specific to that property is putting the cart before the horse, Bhatia said. “Our challenge is to turn that process on its head. Instead of Danny saying, ‘I have five projects, are you ready?’ We want to say, ‘Danny, we are ready; what are you waiting for?’ That will be PeachState 3.0.”

Closing the gap between development and operations is Raman, said Bhatia. “Ricky is the bridge between Danny’s vision and where the company needs to be with operations. He provides the forward momentum. He is the catalyst to where we are and where we are going.”

Raman said success does not depend on one person. “It has to be a collective win. We want to enable our culture to see that the sky is the limit. We try not to be complacent in anything we do. We are building a dynamic and evolving culture to be able to deliver the same level of experience that is the same today and tomorrow in our hotels, in our company and in our community.”

Business Renaissance

Building a consistent service platform and empowering every employee to help PeachState meet its fundamental goals of staying in budget and balancing profit and loss is job one for Bhatia and Raman and another new addition to PeachState – Harsh Trivedi, the company’s director of innovation and market intelligence.

Trivedi is responsible for gathering the analytical data on property performances and guest preferences. He helps PeachState develop and deploy ideas that improve efficiency and enhance experiences.

Trivedi, 27, who grew up in his parents’ Massachusetts motel, said innovation is key in staying relevant now as well as over the long haul. “We are having a renaissance at PeachState Hospitality; we can’t get stuck. We have created a repeatable management system, a scalable platform with which we can move forward toward our 3.0.

“We are essentially trying to deliver a consistent and meaningful experience,” Trivedi said. “We want people to trust us with their hopes and dreams. We want to showcase we are efficient and consistent.”

“It starts at home,” Bhatia said. “We want to make sure we get it right ourselves. Then we can go out and sell it. We can say we have done it 30 to 40 times.”

Raman said once PeachState has grown its portfolio nationwide, it will be time to begin the launch of its third-party management company. “We want to be one of the top 10 hotel management companies in the U.S.,” he said.

PeachState Hospitality LLC in April opened its dual-branded Courtyard by Marriott and Fairfield Inn & Suites in Lithia Springs, Georgia. The 162-room project is one of about a dozen that PeachState Hospitality of Warner Robins, Georgia, has either opened or under development.

With its current portfolio, including hotels under construction and in the development pipeline, the company is halfway toward its ownership goal. By 2020, the company wants to have at least 25 premium-branded hotels in its portfolio. Danny Patel said it plans to divest some of its older assets as the opportunities arise. It has been selling non-core assets over the past few years.

To speed up its growth pace, Raman said PeachState will begin to acquire existing assets.

“We have done our own construction so far,” he said. “Our approach until this year has been 100 percent development, but now we are flipping that to 4o percent development and 60 percent acquisitions. With our strategic growth plan, we cannot wait 18 months for an asset to build.” Time is money is not just a pithy phrase at PeachState, it’s reality.

Raman said many next-gen hoteliers in his peer group are developing hotels with the intent to sell. “There are plenty of assets out there where we can come in and apply the PeachState management system and deliver to our investors, guests and associates.”