Foundation for a Partnership

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How Hotel Equities and The Witness Group share experiences, lessons learned, and logistics of creating a strategic alliance during a pandemic and beyond.

by ZOHREEN ISMAIL

The Witness Group and Hotel Equities joined forces to bring together operations and the management side of the hotel business. This streamlining has allowed two independent powerhouse organizations to create an industry-leading dynamic duo.

The Witness Group was created as an alliance between two family businesses based out of Ohio – Alliance Hospitality Inc. and KB Hotel Group. Alliance was founded by Naresh Patel and led by Nitin Patel, Hari Ohm Patel, and Sachin Patel. KB Hotel Group was founded by Kirit Patel and led by Aakash Patel and Neil Patel. The companies merged in 2016 and led with a focus on investment, construction, and management. Their portfolio included 30 hotels with 10 projects in development.

Hotel Equities was a company founded in 1989 by Fred “Coach” Cerrone based on servant leadership and extensive knowledge of the hospitality industry, and guided by moral and ethical values. And now, 53 years later, their portfolio consists of more than 160 hotels in North America, including Marriott, Hilton, IHG, Hyatt, and lifestyle independent boutique properties.

Today’s Hotelier sat down with The Witness Group and Hotel Equities to see what they have in mind for the future of hospitality and the process of creating an alliance during a pandemic. We also asked the highly anticipated question: Will there be a name change?

INDUSTRY CHALLENGES

With two organizations well established in the industry, leaders from both groups identified challenges within the hospitality industry.

“Finding and retaining good talent was one of the toughest challenges in the last several years,” said Brad Rahinsky, President & CEO, Hotel Equities. “However, the new reality is that talented folks are knocking down our door and we are working hard to create opportunities for them by being nimble and deploying our services in new ways to meet the complex needs of our industry.”

Rahinksky shared his thoughts about the global crises facing our country and industry. “When a crisis like the current pandemic ensues, you want to have an experienced team in your corner to preserve wealth and create significant and immediate opportunities for returns on investments,” he said.

COLLABORATING DURING A PANDEMIC

Amid the pandemic, leadership from Hotel Equities and The Witness Group agreed that an alliance would be beneficial to both organizations and provide the hospitality industry with a qualified service leader to assist through the challenges hotel owners are facing due to COVID-19. The two organizations worked together and adopted a growth mindset for their team members.

“Our portfolio was very dense and clustered to help achieve operational efficiency and profitability,” said Sagar Patel, Chief Investment Officer, The Witness Group. “This partnership would allow us to expand into other parts of the country, and more importantly, provide greater opportunities for our team members to expand and take the next step in their career.”

After the agreement of the partnership was confirmed, both companies aligned on goals and the process quickly began. “The transition and onboarding were quick processes. Both teams worked hard to get associates and hotels transitioned within 30 days,” Patel said.

Two powerful, successful organizations now had the opportunity to share processes and enhance strengths. “A component of this partnership was the opportunity for The Witness Group to share best practices and operating procedures over a 30-year history as an operator and how it can help the Hotel Equities platform and vice versa,” Patel said.

WHAT’S ON THE HORIZON?

The future of hotel management is in good hands with the alliance of Hotel Equities and The Witness Group. The chief development officers from both organizations shared what industry professionals can expect to see with this partnership.

“The Witness Group will continue to focus on development and investment within real estate,” said Aakash Patel, Chief Development Officer, The Witness Group. “We will diversify and expand beyond just hotels as we had already started doing with retail and office projects. Our focus is on recycling capital and looking for opportunities to acquire assets in robust markets that fit our operating model.”

“Hotel Equities will continue to focus on identifying investments that are conversion opportunities along with hotel transactions as we come out of the pandemic,” said Joe Reardon, Chief Development Officer, Hotel Equities. “In addition, we will continue to expand our development services that evolve around being the owner/asset manager for new build and hotel PIPs with our construction team.”

WHAT’S THE NEW NAME?

With the partnership of Hotel Equities and The Witness Group, industry professionals want to know – will there be a name change?

“No, and that was very intentional,” Rahinsky said. “We both will retain our well-respected identities while allowing Hotel Equities to do what we do best – that is operate best in-class hotels that outperform our competitors while allowing The Witness Group to focus on the expertise in development and acquisition.”

BLENDING CULTURE AND VALUES

That’s an easy one for Patel. “People first,” he said. “We have always been a company that works to prioritize its people and has maintained a strong family-based culture. Hotel Equities has been very intentional and focused on this aspect of their business, which is why their turnover and employee satisfaction far outpace competitors.”

“The priorities of both organizations closely resemble one another,” Rahinsky said. “The integration of the two organizations was collaborative and fluid and took away the anxiety of change from our associates and turned it into excitement.”

“This is part of our fabric,” Patel said. “It goes back to the generation above us that founded it all. This was highly important to us, as this partnership is not one where we transition operations and remove ourselves, but truly a partnership where we find ways to add value.”

“You only get one bite of that apple, so you better do it thoughtfully, with integrity, and compassion,” Rahinsky said.

LESSONS LEARNED

Lastly, the teams at The Witness Group and Hotel Equities shared some concluding remarks and lessons learned throughout the partnership.

“Change is hard,” Patel said. “This is a commonly used phrase for any profession. However, it’s important to remember that change does not always have to be negative. It is in our control as to how we adapt and work with change.”

“Overcommunicating and operating in full daylight helps build the necessary trust and adoption you’re looking for,” Rahinsky said, “and will help you come out of the blocks swinging.”

This alliance has allowed both companies to be stronger and better equipped to adapt to changing circumstances that 2020 has thrown our way. “We believe it will result in a 1+1=3,” Patel said. “The expansion of the operating platform will allow for more opportunities for our associates and opportunities for investment for our owners and investors. Like no other year, it truly results in the 1+1=3 mantra.”

5 WAYS TO CREATE A WINNING CULTURE

  1. Listen
    Continue to listen and find ways to get better.
  2. Openness
    Create an environment where team members feel comfortable sharing feedback for better collaboration and ownership of results.
  3. Accountability
    Ensure every team member is doing their part to ensure team success.
  4. Balance
    Allow team members to maintain a healthy balance supported by the company.
  5. Appreciation
    Focus on recognizing and appreciating team members. Start a food drive for impacted team members due to furloughs or picking up an extra shift for a team member.

How has your business developed creative solutions to navigate the pandemic?  We want to hear from you.
Send your story to todayshotelier@naylor.com

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