AAHOA Past Chairman Hasmukh P. (HP) Rama discusses adversity and how past lessons can help hoteliers survive COVID-19
by PETER BERK
As the hospitality industry faces unparalleled economic hardships imposed by COVID-19, it would be beneficial to look back and chat with the leaders who built AAHOA into the force it is today to see how they overcame past challenges and how we can use those lessons to navigate this pandemic. This article represents the first of three interviews to be published monthly in which we interview former AAHOA Chairs and discuss how they coped with and eventually overcame adversity. PMZ is pleased that HP Rama agreed to be the first inter-viewee of the series.
Hasmukh P. Rama is the Chairman of the Board of Auro Hotels, USA, renowned for development, acquisition, and management of up-scale hotels affiliated with some of the largest hotel franchises in the world: Marriott, Hilton, Hyatt, and Taj Hotels. He obtained his Mas-ter of Business Administration from Xavier University in Cincinnati, Ohio, and was awarded an Honorary Doctorate of Business Admin-istration in Hospitality Management by Johnson & Wales University.
Rama is the first chairman of AAHOA and has served as Past Chairman of the American Hotel & Lodging Association (AHLA).
In India, Rama is the Chairman of Gujarat JHM Hotels Ltd., which owns the Surat Marriott Hotel and the Courtyard by Marriott Hotel in Surat. He also is the Founder and President of the Auro University, Surat, Gujarat.
HP, as he is commonly known, has numerous professional affiliations, having served on the board of various universities such as John-son & Wales University, Cornell University School of Hotel Administration, University of South Carolina, New York University, University of Houston, and California Polytechnic University.
Rama’s commitment to excellence has won him many awards, including the ALIS Lifetime Achievement Award, AAHOA Outreach Award for Philanthropy Award, The Lodging Conference Above and Beyond Humanitarian Award, Hunter Conference Award for Excel-lence and Inspiration, ISHC Pioneer Award, the Arthur Landstreet Award, which is presented to an individual who has made a lasting im-pact on the quality of education and training in the hospitality industry, and the AAHOA Oberoi Award for Excellence, which recognizes a hotelier who has demonstrated strong leadership, has high standards of excellence, and who is making a significant contribution to the lodging industry.
WHAT YEAR DID YOU GET INTO THE BUSINESS?
WHAT IS SOMETHING INTERESTING THAT PEOPLE PROBABLY DON’T KNOW ABOUT YOU?
I‘m a regular visitor of Sri Aurobindo Ashram in Pondicherry, India, for meditation and yoga practice.
WHAT WAS THE FIRST HOTEL YOU OWNED, AND WHERE WAS IT?
A 40-room independent motel in Pomona, CA.
HOW MANY HOTELS DOES YOUR FIRM OWN TODAY, AND WHAT ARE THE BRANDS?
Auro Hotels owns 38 hotels and operates under Marriott, Hilton, and Hyatt brands.
YOU WERE FACED WITH ADVERSITY WHEN OPENING YOUR FIRST HOTEL. DESCRIBE AN UNEXPECTED CHALLENGE.
I wasn’t able to speak Spanish with my Spanish-speaking customers. I also didn’t know how to make beds, change vacuum bags, or clean the pool.
HOW DID YOU OVERCOME THOSE CHALLENGES?
I learned about the operations from the seller at the motel. He taught me all I didn’t know at that time. Through training and self-learning, I was able to overcome all that was necessary.
WHAT WERE THE FIRST ACTIONS YOU TOOK AT YOUR FIRM WHEN YOU REALIZED JUST HOW SERIOUS COVID-19 WAS BECOMING?
We developed the “Connecting Safely” program for our guests and associates. This allowed us to communicate with all stakeholders, banks, brands, vendors, associates, guests, and communities on the status of our situation. We could rely on them for help and support. We also focused on the cash management of the company through cutting costs of all line items within our hotel operations.
HOW DID YOU MAKE THE DECISION TO KEEP YOUR HOTELS OPEN OR CLOSE THEM?
The group house/full-service hotel’s demand immediately vanished. It forced us to suspend operations and our ability to cover variable and fixed costs based on revenue stream. We kept one property open and closed others, where we had a choice of multiple properties within the same market area.
WHAT STEPS ARE YOU TAKING AT YOUR HOTELS TO MAKE TRAVELERS COMFORTABLE THAT IT IS SAFE TO STAY AT YOUR HOTELS? PLEASE GIVE SOME SPECIFIC EXAMPLES.
We have created property-specific “Connecting Safely” plans, which include having a hygiene manager at each property to ensure all our procedures are in place, provide training to all our associates, and address any questions or needs our guests may have during these challenging times. We are using EPA/hospital-grade cleaners in all guest rooms and public areas and have increased the frequency of our cleaning schedules in all public areas.
Signage has been installed throughout all our properties to remind guests to wear masks and follow all social distancing guidelines. Sanitation stations have been added throughout our properties at the entrance and high-touch areas such as elevators, fitness centers, and all food and beverage outlets. All front desks now have plexiglass shields. We are utilizing single-use menus in food and beverage outlets. We are offering virtual site visits instead of in-person tours to meeting planners and others interested in booking an event at one of our hotels.
WHAT DO YOU THINK ABOUT THE CURRENT ZOOM MEETING CONCEPT? DO YOU THINK THAT WILL IMPACT THE BUSINESS TRAVELER DEMAND IN THE FUTURE?
Zoom meetings are a great way to communicate and make people feel more connected. I do feel that Zoom and other similar plat-forms will continue to be used for smaller, more regular, ongoing meetings. However, humans are social beings, and there is no replacement for in-person connections, networking, brainstorming, and building long-term relationships. The meetings/group side of the business will be slow to come back, but once a vaccine is created, I am confident that business levels will resume.
LET’S DISCUSS FINANCE FOR A MOMENT. HOW HAVE YOUR LENDERS HANDLED YOUR EXISTING LOANS? HAVE YOU GOTTEN RELIEF/FORBEARANCE?
All of our lenders offered us forbearance, generally for three months. We are working with many of our lenders now to extend the forbearance. Most hotels will need additional forbearance from lenders. We are starting to hear of pushback from some banks that are not willing to extend the initial relief period, or who may be asking for changes in terms as compensation for the extension. This is a time when hotels need forbearance. Banks that provide that relief will help to stabilize their loan faster and will build loyalty with their hotel clients, which will serve them well going forward.
HOW DID THE CRISIS YOU FACED WHEN OPENING YOUR FIRST HOTEL PREPARE YOU FOR THE DECISION PROCESS AMID THE CURRENT PANDEMIC?
I learned to never take success for granted, as we‘re living in a dynamic, changing world both personally and professionally. You have to earn and persevere over the course of your business to create goodwill, trust, and confidence of all stakeholders you work with. That applies to lenders, vendors, franchisors, associates, or fellow hoteliers. When things are not going your way, and you need help, then those deposits of creditworthiness will help to address and overcome issues, which inevitably come without pre-notice.
The biggest mistakes in our decisions are made during the best of times because we become comfortable, complacent, and overambitious, driven by greed, ego, and false competition. It’s always advisable to preserve the percentage of cash flow in liquid form, bank de-posits, stocks, and bonds. These can be available either to meet current obligations or take advantage of opportunities during bad times.
WHAT ADVICE WOULD YOU GIVE TO OTHER HOTEL OWNERS TO GET THROUGH THIS CURRENT CRISIS?
Communication, communication, communication! That, combined with transparency and candor toward all stakeholders, will help you manage the business with fiscal discipline on a daily basis. It will also help associates in your community in their hour of need. Most importantly, focus on your health and safety and all the people that depend on you.
THE BIG CRYSTAL BALL QUESTION: WHEN DO YOU EXPECT REVPAR TO GET BACK TO 2019 LEVELS
It will take time to get back to normalcy, which I predict will be in the second half of 2022.
Peter Berk is President of PMZ Realty Capital LLC – Hotel Finance Group. He has more than 26 years of experience in the real estate industry and is a frequent lecturer at industry events, including AAHOA webinars and meetings. He has arranged more than $6 billion of debt and equity transactions for hotel owners, representing more than 50,000 hotel rooms. As an industry leader, he has worked with AAHOA Members for more than 20 years on their financing needs. Berk attended George Washington University as an undergraduate and holds a graduate degree from Columbia University. He can be reached at [email protected] or 212-277-8265.