To inspire young professionals, hoteliers should share their success stories
Hoteliers who question whether their children are up to the task of running the family business should know they’re in good company. In June 2023, a Wells Fargo survey of 1,008 entrepreneurs found 52% don’t want their children to inherit and run their business, with many respondents citing concerns that their children lack the requisite skill set.
The survey of U.S. adults ages 50 and older with more than $1 million in investable assets excluded those who had inherited most of their wealth. Not surprisingly, 90% attributed their financial success to their own hard work and determination, a sentiment that will resonate with many AAHOA Members who’ve built their hotel companies from the ground up.
But can they expect that same level of resolve from their children? Many respondents to the Wells Fargo survey have their doubts. Thirty percent said it’s been hard to transmit their work ethic to their children, and 44% were worried their kids didn’t know how to build wealth of their own.
Michael Liersch, head of advice and planning for Wells Fargo Wealth & Investment Management, said many entrepreneurs lack confidence that their children will keep the family business on solid footing. In addition, some wealth creators believe large inheritances can be a disincentive to earning one’s own financial success, he said.
“More parents are recognizing their children simply aren’t interested in joining the family business, [so the parents]aren’t pressuring them to do so,” Liersch said.
“Knowing what your children are interested in and where their strengths lie is key to effective succession planning.”
Still, parents do have some ability to shape their children’s career paths. A 2021 Joblist survey of 810 workers found that 48% felt that their parents strongly influenced their career choice, while 25.7% said their parents’ influence was moderate and 26.3% said it was marginal.
Similarly, 39.9% of respondents said they felt heavily pressured to follow their parents’ career advice, while 29.9% said the pressure was moderate, and 30.2% said they weren’t pressured at all.
Navpreet Saroya, a second-generation hotelier studying at the University of California at Berkeley, said he’s attended industry events where hoteliers have complained their children aren’t interested in taking over the family business.
“It’s a shame because these parents worked so hard building these successful businesses, and for it all just to go to cash [after being sold]doesn’t make much sense,” he said. “They’ll own a property for years, they’ll do all these capital improvements, they’ll be involved in their community, they’ll build relationships with their employees and their families, and all that goes away when they pull their money out and retire. I think it’s somewhat self-inflicted.”
SHOW THEM THE MONEY
To inspire the next generation of leaders in the hospitality industry, Saroya said it’s vital for hoteliers to share their success stories. He said many hoteliers from Southeast Asian cultures have been taught to be humble about their financial success, and they’re reticent to talk with their children about being wealthy.
Consequently, many children of hoteliers see their parents burning the candle at both ends for years, and they hear complaints over the dinner table about the stress and workload that come with running a small business. Parents needn’t display their bank statements on the refrigerator door, the way they would a child’s artwork or report card, but they shouldn’t keep their wealth a secret either, Saroya said.
Instead, hoteliers should emphasize to their children their hard work is for a purpose, and it pays off handsomely in the long run, he said.
“We’re told not to flaunt our wealth because we don’t want to raise spoiled kids; we want to raise good kids,” Saroya said. “That works, but what also happens is you see your parents working 80 hours a week and you don’t know how much they’re earning. You have to show your kids the stat sheet and clearly communicate to them this is a career worth pursuing.”
During the winter, Saroya, 20, was taking a six-month break from studying aerospace engineering at UC-Berkeley to help design aircraft wings for Boeing. He said his father and uncles have owned hotels and gas stations for years, and he’s been involved in the business since he was 16.
In addition to work and school, he runs one of his family’s hotels in Ashford, WA, is developing a new boutique hotel in Winlock, WA, and plans to launch a management and franchise company called Redondo Hotels and Management in early 2024.
Saroya plans to work part time for Boeing while finishing school, and he’ll remain active in his family’s business, which they’re looking to expand. He said he doesn’t think he’ll have to choose between a career in aerospace engineering and hospitality but will find the time to pursue both of his passions. For the children of hoteliers, it’s possible to contribute to the family business while forging your own path, he said.
“Yes, you can be a lawyer, but you can also manage the family business on the side,” Saroya said. “You can always do multiple things, so never box yourself in.”
Saroya said many of his peers at UC-Berkeley are interested in high-growth fields such as logistics and financial technology and desire stable jobs that provide work-from-home opportunities and a good work/life balance. Having grown up after the dotcom bubble of the late 1990s, they’ve never known a time when the tech industry was on its heels.
Meanwhile, Saroya and his peers have seen the hospitality industry beaten down by the COVID-19 pandemic, making them question whether they have a future in the industry. That makes it all the more important hoteliers tell their children about how their businesses are rebounding and how the industry has proven resilient time and again, he said.
With rates of travel approaching record highs, hoteliers have a positive story to share with their children. Hoteliers also should extol the virtues of being your own boss, Saroya said.
In October, a survey of more than 1,000 Americans ages 16 to 25 by Morning Consult and Samsung found that half wanted to become an entrepreneur and start their own business. Ann Woo, head of corporate citizenship at Samsung Electronics America, said conversations about entrepreneurship and alternative career paths accelerated on online forums during the pandemic, heightening young Americans’ desire to become their own boss.
For the children of hoteliers, that can be a major selling point for the family business, Saroya said.
“When you own the place, you run the place, and you don’t have to answer to anybody,” he said. “Young people have an opportunity in the hospitality industry. If they get in here, they can really make some good money.”
SEEING MORE YOUNG FACES
Armaan Patel, 19, never had to be sold on the hospitality industry. He grew up working at his family’s properties and later started a hotel-management company called AGA Essentials to operate their 23 branded hotels in the Los Angeles area. Patel also founded AGA Hotels, a small group of boutique properties that includes the LYFE INN and ERTH INN brands.
“I never really thought about doing anything else,” Patel said. “When I was a little kid, I would go straight to the hotel after school and see what I could learn. Since my dad owned the hotels, I could see firsthand how operations really work. He gave me the motivation to start in the hospitality industry, and I really loved it.”
Patel’s company had a booth at AAHOACON23 in Los Angeles last year, and he said he was encouraged to see more young attendees than at previous industry events. He credited AAHOA for “progressively working to involve the younger generation,” adding it’s important for young hoteliers to attend industry events and network with each other.
Saroya said his father has a cellphone and a phonebook full of industry contacts, and younger hoteliers should follow suit, taking advantage of LinkedIn and other online resources. He said it’s also important to attend industry events like AAHOACON and take the initiative in making new contacts. Most hoteliers and industry experts are more than willing to mentor young hoteliers and share their knowledge, so it’s up to them to ask for help, he said.
“It’s 100% worth it to go to these events,” Saroya said. “I’ve met some amazing people at these events, so if you see a young person there, go introduce yourself. It’s very important we connect with each other.”
Patel said some hoteliers may not be active enough in promoting the hotel industry to their kids as a rewarding career path, and the industry as a whole could be more welcoming to young faces. He said real estate brokers, insurance agents, and commercial property owners sometimes don’t take young entrepreneurs seriously, which can sour them on the industry.
“A lot of people thought I was too young to start my business, but I’m doing pretty well with it, so I’m going to keep going,” he said.
Patel said hoteliers should encourage their children and the young people in their companies to bring fresh ideas and innovations to their businesses. By giving young people opportunities and responsibility, hoteliers can help the industry retain young talent, “combining the experience of the older generation with the energy and creativity of the younger one,” he said.
“It’s not just passing the torch,” he said. “It’s an investment in a stronger, more resilient hospitality industry for the future.”
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