AAHOA Member Mike Patel shares insights on franchising in an uncertain economy
When Mayur (Mike) Patel entered the family hotel franchise business upon graduating from college in 2011, it wasn’t a new experience to him. Growing up in the hotel business with his family, he was already familiar with life behind the check-in counter and the work that goes into smoothly operating a hotel. A former AAHOA North Texas Regional Director (2016-2019), and having served as an ambassador for five year prior, Patel continues to share his energy and bring that experience to his work on AAHOA’s strategic planning committee.
With his expertise in the industry, and in the current economy, Patel offered his insights on what to expect and how franchise owners can prepare and excel in the coming months.FRANCHISING IN THE CURRENT ECONOMY
Today, Patel’s franchise portfolio includes more than 25 properties concentrated in the Dallas-Fort Worth Metroplex, with an additional property in College Station, TX. Even in ongoing economic uncertainty, Patel remains bullish on franchising and the opportunities it offers.
He recently celebrated the opening of a new Motel 6/Studio 6 dual-branded property close to Dallas’s Market Center – his 24th location with the brand. “Going into our current economic state, it seems this slowdown has been inevitable,” Patel said, “but the COVID-19 pandemic already proved the resilience of the economy lodging segment.”
There is resilience in economy lodging, and Patel expects continued focus on conversions and finding properties that can be renovated and converted the right way to fit the segment and the market. His preferences are properties that have around 125 rooms. “These are quick to convert and easy to manage once open,” he said.
Patel believes now is a great time to open new properties, focusing on the long term when investing and expanding. For the Dallas market, the overall outlook is growth. Dallas is committed to the travel and convention industry, and voters recently approved a 2% tax increase to fund a new convention center. “Dallas is a market that knows the value of our industry, and it’s important to look for markets that are great for travel with local governments that encourage these investments,” he said.
In addition to supportive localities, Patel stresses the value of franchising with the right investors and partners. For him, franchising with G6 Hospitality has created a sustainable and well-managed relationship. He points to a lean operating model that reduces costs and comes with strong brand recognition to promote growth. For his most recent Motel 6/Studio 6 property opening, the timeframe from purchasing the property to opening the doors was a quick 45 days, a feat he attributes to his ongoing relationship with the brand and clear understanding of the expectations of the relationship.
MANAGING PROPERTIES THROUGH UNCERTAIN TIMES
Knowing how to support properties and manage the short-term effects of the economy remains a key aspect of securing franchise investments during economic uncertainty. Labor is one area that can cause challenges in tough times. Throughout the pandemic, labor shortages affected some hotel operators’ ability to maintain housekeeping requirements. For Patel, finding understanding with the brands in his portfolio helped to alleviate some of the burdens. Many economy brands understood the needs of the franchisees and worked to adjust the housekeeping services for stayover guests and check out requirements.
Another way many handle labor challenges is to be onsite and dedicate their own time to covering many of the positions you might hire. “It’s the operating partner’s responsibility to keep things up to standard and running efficiently,” Patel said. “But, this is a good way to manage in an economic downturn or work to save up money to reinvest in – or for some just starting out, buy – new properties.”
Ultimately, Patel’s main advice is to work with a brand that fits in your franchise portfolio and has a team that truly works to create a manageable experience and successful relationship. According to Patel, “At the end of the day, we’re working to share revenue and success and a lot depends on finding the right people to work with at the right time.”