V.K. Chawla opened his first hotel in 1989. Nearly 30 years later, with his sons at the helm, Chawla Hotels has grown and will debut the first American Idea hotel.
by Alicia Hoisington
V.K. Chawla was an owner of a convenience store when in 1985 he had a dream to open a hotel in Greenwood, Miss. That dream would not come easy, however, and the journey was one that would have Chawla cross paths with Donald Trump – an encounter that nearly 30 years later would see itself come full circle.
“My father was rejected by over 50 banks and other loaning entities from 1985 to early 1988. He was desperate to get financing in January of 1988, as Quality International was getting tired of waiting on us to start construction since he had originally gotten the Greenwood Comfort Inn franchise in 1985,” said V.K’s son, Suresh Chawla.
That rejection would lead V.K., a long-time AAHOA member who passed away in 2015, to cold call companies across the country for help.
“The only one to call him back was the Trump Hotel Organization, and he spoke to Donald Trump himself in February 1988,” Suresh said.
While Trump didn’t provide V.K. the financial assistance he sought, he did offer advice and encouragement to get the 40-room hotel off the ground. Trump suggested V.K. go through the Small Business Administration to get his first loan and explained the difference between a 504 loan and a 7C loan.
“He told my father to stop feeling sorry for himself, and that if he had been able to overcome so much in life already, he would overcome this struggle with financing,” Suresh said.
To be sure, V.K. had overcome many adversities in life, according to his son Dinesh. When V.K. was 9 years old, his father was killed. Two of his older brothers died during the Partition of India. V.K. was the first in his family to graduate from high school, and he eventually earned a Ph.D. He left India, where he had a job as a professor, and moved to Canada with no contacts or job offers. He washed dishes, sorted mail and then became a senior researcher on water quality. He then moved to the United States and explored the food industry, where he mopped floors, cooked hamburgers and fries, and then opened his own business.
“My father was a bull-headed and determined man, and he never said no to a challenge,” Dinesh said.
And with the encouragement from Trump, V.K. did stop feeling the pang of rejection. He became motivated to rekindle his talks with banks. He connected with an SBA expert who introduced him to Trustmark Bank in Jackson, Miss., where he secured his first loan. The Comfort Inn hotel finally opened in August of 1989. It would be the start of a line of new hotels, a successful hotel company and a family business.
AMERICAN DREAM TO AMERICAN IDEA
Now, V.K.’s sons, Suresh and Dinesh, head up Greenwood, Miss.-based Chawla Hotels. Today, the company has 17 limited-service hotels in its portfolio, all in Mississippi.
The Chawla’s newest venture? They will be the first owners to develop Trump Organization’s new 3-star hotel brand, American Idea. The brothers’ plans will see them retrofit three of their current properties to the new brand.
“We have some properties that don’t fit the mold of major chains,” Dinesh said. “Do we just continue on a downward spiral and get a flag that doesn’t serve much of a purpose or ROI, or do we try something new to reinvigorate our properties?”
He said the brand allows for an investment in their current properties with a flag that meets their needs. Getting in on the ground floor was also an attractive proposition for the brothers, who believe the brand has the winning formula for success.
“What attracted me to the brand was that they felt there was opportunity out there to have hotels in the 3-star market that are high quality and not so cookie-cutter,” Suresh said. “A lot of hotels nationwide don’t fit into major brand players, but there is opportunity to brand them with a very attractive product.”
That’s exactly the point of the brand, according to Eric Danziger, CEO of Trump Hotels.
“This brand is intended to go into Every City, USA,” he said. “Why launch a brand in a big metropolitan area when it’s designed to be in Cleveland, Miss.?”
Danziger said the brand began to be conceptualized during the Trump family’s travels for the campaign. During their stays in hundreds of cities at many branded hotels, they realized there was nothing unique about the properties.
“They all looked the same but with different signs,” Danziger said. “We asked what we could do that is different for the consumer and that will do a good job for owners.”
The local community will be the focal point of each hotel. For example, if a city is home to a hanger manufacturer, then a central point in the lobby might be a wall of hangers on display.
“We want to provide an outlet for owners to put their mark and their individuality into the building instead of worrying about the size of the tile in the bathroom as a brand standard,” said Kathleen Flores, executive vice president of new brands and innovation for Trump Hotels.
Where possible, goods within the hotel will be made in America, Danziger said.
“When we first started dreaming of this, I wanted everything to be made in America,” he said. “It was a shock as to how many things are not nor can be. For example, no TV is made entirely in the U.S. TVs have pieces from other countries and are assembled here.”
The concept is to include as many products as possible made in America, but the company recognizes not everything can be, as the high cost would be a disservice to owners, he said. But where it makes sense, American-made products are key. For instance, if a hotel is in New Orleans, then the owner might consider sourcing coffee from a local business.
“For a traveler, wouldn’t that be cool? If I’m in New Orleans, why would I want Folgers if they have Louisiana coffee?” Danziger said. “These are the kinds of things that create the persona. It’s about respect to America and the owner.”
“So many amazing ideas come out of this country. America is what we are,” Flores said. “We want to highlight that in each of these locations. It creates the experience for guests and allows team members on property to take part in that and learn a few things about the community in the process.”
A BRAND WITH PLANS
The first three American Idea hotels to open with the Chawlas will be conversions, located in Cleveland, Miss.; Clarksdale, Miss.; and Greenwood, Miss. However, that doesn’t mean new-builds are out of the question, Danziger said.
“It can be anything that fits within the brand essence,” he said, adding that the private nature of the company allows it to be selective when public hotel companies can’t.
Additionally, the estimated conversion cost of $9,000 to $12,000 per key is a reasonable figure for owners, Danziger said. The value proposition of Americana nostalgia is also attractive. For example, exterior corridors – which many major brands have abandoned – are OK with American Idea. And Danziger said owners will appreciate the flexibility of the brand.
“We don’t care whether the tiles are 4 inches. I’ve never met anyone who wouldn’t stay at a hotel because it didn’t have 4-inch tiles,” he said. “I’m very flexible because we are owner-centric, and it’s about doing the right thing.”
That flexibility and owner-focus within the midscale space is precisely what the Chawla brothers like about the brand.
“I love the fact that there is tremendous focus on public areas and a gathering place in the evening for this chain,” Suresh said. “We’re looking to develop a sports bar concept in the lobby with American products, which is a niche for clientele out there.”
The support from brand leaders has been “stunning,” Dinesh said, adding that Danziger and his executive team have visited Cleveland, Miss., where the first hotel will open, several times.
“No other chain in the world would send someone at that level, and we’re one month into development,” Dinesh said. “They provide amazing resources and perspectives.”
If V.K. were still here today, his sons said he would be fascinated by the American Idea deal.
“He didn’t believe in inertia. He loved a challenge and taking a piece of dirt to accomplish something,” Dinesh said.
“He would be proud to see the renovations and proud we’re taking one hell of a gamble similar to what he did in 1989,” Suresh said. ■
PHOTOS COURTESY OF THE CHAWLA FAMILY
With a family business that started nearly 30 years ago by their father V.K., Suresh and Dinesh Chawla have grown up in the hotel industry. Their father taught them the value of hard work, showing them that humility was the key to success and no job was too small.
“My brother and I both had MBAs and worked the front desk,” Suresh said. “We cleaned rooms when necessary, did maintenance, swept and cleaned the pool. We learned about work ethic and business from him.”
All that hard work wasn’t without payoffs, Dinesh said. While V.K. didn’t always pay his sons a high salary, he did give them equity in projects.
“Things were tough in the beginning to work hard, make sacrifices, be humble and do grunt work,” Dinesh said. “But when things went well, he gave us a lion’s share. He set us up for life.”
Now the brothers head up Chawla Hotels and have 17 hotels in five cities in the Mississippi Delta with more than 300 employees. But they have never forgotten their roots and the lessons their father taught them. Those lessons have led their company to success today.
“The most important aspect of the hotel business is the front line,” Suresh said. “The most important asset the front line can have for success is a nice personality with a smiling face. That’s the key to success in our business.”
In terms of strategy, Dinesh said he learned early on that success comes from listening, learning and doing in a humble fashion rather than telling people what to do and how to do it. He said it’s important to seek out advice from all walks of life.
He recalled a time when the family hotel business was getting off the ground and he learned how to use power tools from the construction crew.
“We were naïve. We thought it was something you just fell into,” he said. “They were excited to show me things, an owner learning from the front line with no pretentious airs.”
Dinesh said that accessibility comes from the way his father raised his sons. By making them work front-line jobs, the brothers learned how to communicate and be natural in an environment so that employees were not just co-workers but also friends.
“It’s amazing. If you don’t act like the smartest person in the room, then by accident you become the smartest person,” Dinesh said. “You’re like a sponge, listening and asking questions to get new perspectives.”