Part 4: The pros speak up

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Nitin Shah, President of Imperial Investments Group, Inc., talks about lessons learned from past hurdles and how he applied those to surviving COVID-19

by PETER BERK

As the hospitality industry continues to face unparalleled economic hardships imposed by COVID-19, we are pleased to present the next interview with one of AAHOA’s founders and past chairmen. The discussions shed light on the struggles they went through as both owners and chair, as well as how those experiences prepared them to face today’s challenges. For this month’s edition, we had an exclusive chat with Nitin Shah, President, Imperial Investments Group, Inc., a Georgia-based hospitality company he founded in 1984. Assets include numerous hotels as well as various commercial real estate holdings.

Shah also is chairman and CEO of Embassy National Bank, an Atlanta-based community bank he helped establish in 2007, which is a leading hotel and SBA lender in the southeastern U.S.

In 1989, he was one of the founders of AAHOA and became its third chairman in 1993. Shah was instrumental in increasing membership and revenue. Today, he continues to be active in AAHOA. Nitin has served on several committees over the years. Currently, he serves on the Franchise & Industry Relations Committee and the Past Chair Council.

He serves on the advisory boards for the College of Business at Georgia College and for Asian Studies at Kennesaw State University. Shah co-chairs the Global Organization of People of Indian Origin (GOPIO) Chamber of Commerce.

Born in Mumbai, Shah earned his undergraduate degree in mechanical engineering at the University of Bombay, and his master’s in Business Administration at Georgia College and State University.

Nitin Shah is the President of Imperial Investments Group, Inc., Chairman and CEO of Embassy National Bank, and AAHOA’s third chairman.

What was the first hotel you owned and where was it?
Days Inn, Milledgeville, GA

How many hotels does your firm own today and what brands?
Fifteen hotels comprised of Hilton (Hampton, Hilton Garden Inn), Marriott (Fairfield, Sheraton), IHG (Holiday Inn Express), and Choice branded properties.

When opening your first hotel, you were faced with many challenges. But describe a challenge that was completely unexpected.
The biggest challenge I faced when I opened my first hotel was a lack of willingness from bankers, franchise companies, insurance agents, and even other hoteliers to work with an Indian owner.

How did you overcome that challenge?
I overcame this challenge in several ways. First, I utilized my extensive experience in banking and finance. I was able to speak the same language as the lenders and show the franchise companies and other partners the value I brought to the deal. Second was banding with several other owners facing the same challenges. We collectively reached out to Mike Leven, Henry Silverman, and Jerry Merkin, who not only listened to our issues but took interest and helped us form AAHOA. Through AAHOA, we were able to help educate our community on how to become better hoteliers, which gave us a voice and power to affect change.

What were the first few things you did at your firm when you realized the COVID-19 crisis would be serious?
We looked at each property individually and strategized on the best way to mitigate the impact, whether it was to close the property, close a restaurant, or even close all public facilities to ensure survival. We contacted all our partners – lenders, franchisors, and vendors – to share our plan as well as to ask for their help and input. Most of our small lenders stepped up to help, but the big banks were harder to deal with, some asking for three months’ advance payment to get a deferral. Our vendors were understanding and deferred payment. Many franchise partners stepped up with innovative ways and programs to help us survive. We learned communication was the most important tool in this crisis. This process still needs to continue.

How did you make the decision to keep your hotels open or close them?
A cost analysis was done on each property to help us determine the best course forward on a case-by-case basis. In some properties, we made the hard decision to keep them open with only one or two staff members to maintain and monitor the hotel along with taking care of the building and ensuring the safety of those guests we had.

Describe how the lessons you learned from your first unexpected crisis opening your first hotel helped your decision-making process during the COVID-19 crisis?
Our experience in the early days running hotels with minimal resources and learning how to negotiate with lenders was beneficial. We used all the government-provided resources like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) and took care of our long-term employees.

What is something interesting that people probably don’t know about you?
Having banking experience helped me tremendously because I was able to not only help myself but many others on the best way to negotiate with lenders, understand loan documents, covenant clauses, banking regulators, COVID-19 regulations, CMBS documents, and back-end workings so that they can navigate their loan problems without losing the property.

What advice would you give to other hotel owners to get through this current crisis?
The most important advice is to communicate with your lender to ensure you are not in default and make sure you have the proper insurance to cover a significant loss. Everything else you can always get back. The most important thing is to take care of your health and not let the pandemic stress you out.

The big crystal ball question: When do you expect RevPar to get back to 2019 levels?
2022 if a vaccine or treatment is widely available.

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 berk@pmzcapital.com or 212-277-8265.

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