The hotel industry secret NOBODY talks about

#entrepreneurship #franchisebusiness #wyndhamhotelsandresorts #podcast 

On the Built4Profit Podcast, hosts Elizabeth and Sha interview Tesh Patel, Senior Director of Franchise Development at Wyndham Hotels & Resorts, and unpack how the hotel industry is largely franchise-based and often owned by individuals, families, or partnerships. 

Patel explains his role developing Wyndham’s select-service brands in the Southeast, including La Quinta, Microtel, Hawthorne Suites, and the newer Echo Suites, created post-COVID to meet demand in the economy extended-stay segment with 200+ deals signed and about 15 open! 

He shares his upbringing working in a 28-room motel, how AAHOA helped fight discrimination, and why success depends on commitment, hands-on leadership, strong key managers, service, and proactively managing reviews. 

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Get to know Wyndham Hotels: https://development.wyndhamhotels.com/

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Transcript

SPEAKER_00 0:00

Almost everything we were saying, we were shocked, and we didn't even know this was a franchise, not this brand, the industry as a whole, and you probably don't either. Welcome to Built for Profit Podcast, where entrepreneurs and strategies that actually work. We're here to inspire, challenge, and give you the playbook to profit with purpose. Let's get into it. Let's do it. I don't know if we've learned the most on this podcast with this guest or we knew the least about this industry. I think both. But almost everything we were saying, we were shocked and we didn't even know this was a franchise, not this brand, the industry as a whole. And you probably don't either. But today we have with us Tesh Patel, and he is the senior director of development at Wyndham Hotels and Resorts. And he's sharing all the types of knowledge that we didn't know we needed to have. We're learning a lot today. And you will too. So Tesh Patel, welcome to the Built for Profit podcast. We are thrilled to have you. We want to first start by your background is fascinating. And honestly, we can go through probably the entire podcast just hearing your story. But what we want you to start with now, Tesh, is what you do in your role. And then we're going to back up really into kind of what you were doing before that and how you ended up there. So tell us a little bit about what you do now for Windham Hotels.

SPEAKER_01 1:17

Yeah, currently I'm the senior director of franchise development. I handle basically the Southeast development for Windham at our select service brands, which includes Kita, Echo Suites, Hawthorne Suites, and Microtel. Echo Suites and MicroTel are all new construction brands. Echo Suites is actually a brand where you recreated uh right after COVID to fill a demand in a sector that we saw is continuing to grow, which is the economy extended stay segment. And we've developed that and we've got over 200 in development, and we've got about 15 open across the US as of today.

SPEAKER_00 1:53

200 are being built right now.

SPEAKER_01 1:55

200 are assigned to be built, so they're in one stage or another, either under construction, they're getting architecturals done, or they just recently signed an agreement, so they're plowing their land and everything else.

SPEAKER_00 2:07

One of the things we wanted to discuss was is it a good time to get into the hotel industry? But I feel like that answers the question. You know, even backing up, Tess, when we first talked, I was telling you, I never even realized when you're driving down the road, that was a franchise concept. And me neither. When she told me that was my first time hearing about it.

SPEAKER_01 2:24

Yeah, most hotels you stay at, regardless of brand, owned by either individual family companies or they're owned by partnerships, but they're all franchise for the most part. There aren't any big private chains out there. Marriott, Hilton, Wyndham, majority of our hotel brands are under some type of franchise model.

SPEAKER_00 2:43

So, like the spoiler alert right here is like Paris Hilton doesn't have all the Hilton hotels.

SPEAKER_01 2:48

She comes from a great family background in the hotel business, but most of the Hilton brands are owned by my people, the Patels.

SPEAKER_00 2:55

So um they used to be corporate Tash or dude, we just misunderstand the concept the whole time.

SPEAKER_01 3:02

Laquinta, for example. La Quinta was started by two brothers in 1968. And if I get this wrong, my boss will kill me. But two brothers started in 1968 during the World Fair in San Antonio, decided to build a hotel for the World Fair that was coming there. And from that, they grew over to 300 privately owned Laquintas, predominantly in Texas, but across the country. And then in 2000, I think it was, they started franchising. And then in 2018 is when Wyndham bought Laquita and added that brand as our premium upper mid-scale select service brand into the fray. It's been growing ever since. But they've kept that family model of this is what it takes to be a successful Laquinta. And we make sure our franchisees live and abide by those rules and regs that we put together. And it's a strong brand that uh competes very well in the select service market.

SPEAKER_00 3:56

Tesh, this is a trick question. Your boss did call me and told me to ask you this. I'm sure you've heard this once or twice. So this should be an easy this is a setup, right? What does Laquinta mean in Spanish?

SPEAKER_01 4:05

That's a trick question. You might have to edit this.

SPEAKER_00 4:07

Next to Denny's next to the thing's it, yes.

SPEAKER_01 4:12

And they did start out. A lot of them were next to Denny's.

SPEAKER_00 4:15

All right, there you go. So now I'm just giving you value insight.

SPEAKER_01 4:18

Appreciate it.

SPEAKER_00 4:22

All right, so Tesh, we know your background a little bit with how you got into the hotel business. Because anyone in a breathing, they're kind of like, how did you get into this?

SPEAKER_01 4:32

I grew up in the business from when we moved from London to Rome, Georgia, and uh first property my dad bought was a little 28-unit mom and pop motel, and they teach you a lot. It's the original live work play model because we lived there, we worked there, we ate there, did laundry, did housekeeping, did plumbing, just anything that had to do with hotel business. It gave you a roof over your head and also uh a business to run. I hated the motel business. I wanted to go play, I wanted to go play football with my buddies in high school. And no, I got a watch front desk or I got rooms to paint. But you learned the value of hard work in this business. And it was more just because it's a family thing, right? So you're helping your family and you grow as you work. So that's how the Indian community started in the hotel business in the late 80s and early 90s. We all kind of helped each other buy your first property, and then from there you grow.

SPEAKER_00 5:26

You obviously have evolved from painting the rooms. So you've had many ownerships of hotels, right? You're in your brother, your family. So you've evolved from 28 rooms. So, how many rooms right now would you say are in your family or you manage?

SPEAKER_01 5:37

We've actually recently downsized. Uh, my brother's retired, my dad retired a while back. I'm not an operations guy. Operations is a different animal to me. So when we do it's a new construction, we open this hotel, or if we take an existing hotel and convert it to a different brand, they can continue to operate it. My exposure, why I ended up staying in the hospitality business, because out of high school, I was like, I'm gonna go study finance and go work at a financial institution. But I think it was my senior year in college on a group called Asian American Hotel Owners Association. I think it's over 9,000 members now, was created to fight discrimination against Indians owning hotels with franchise companies, insurance companies, all of those things that you need to operate a hotel successfully. And uh during the summer of '93, there's an internship offered by the first company I worked for, Choice Hotels. I got that internship and I saw different sides of the industry: lifestyle segments, full service, select service, limited service economy segment, extended stay now is a huge segment in our industry. So depending on where you want to play, you can find a segment in this industry that will fit not only what you want to do, but also your budget. Because that's to get into the hospitality business. You do have to have a lot of cash. Typically, starting out, you need minimum probably million dollars and five million dollar network. Most people that get into the business do it with partnerships, other family members. They group their money to either buy or build their first hotel. Right now, it's a little tougher to develop just because of the financing side of it. But there are segments where it is growing in development. As I said, the hospitality business is continuing to grow faster than any other segment in the industry right now. And that's just especially on the economy side, because you've got people that are displaced or going through a divorce or going through other things, or you've got traveling nurses where they need to be in a certain area for a certain period of time. They don't want to rent an apartment and go through all the stuff that you have to go through to get an apartment. And you just rent an extended stay room, which usually has a nice kitchenette in your bed and can stay there for a couple of weeks at a time.

SPEAKER_00 7:46

It's a really good point to bring up kind of the entry level to that. Because I'm vegging myself, and there was a show called Hotel, and they lived in a hotel and they walked down the stairwell, right? And always dressed up like it was like a dynasty hotel situation. Yeah, you you picture that in your mind, but you go, who wouldn't want to own a hotel? That just sounds really good, especially you got room service. But who's the ideal person? Like who wakes up and says, Yeah, this is what I want to be. Are they in the hospitality? They just look at the numbers. Is it a family thing? Who are the people you see that is attracted to this opportunity?

SPEAKER_01 8:13

Typically, it starts out as a family thing for the most part. But today we're seeing people in the multifamily space getting into the hotel business. We see gas station convenience store owners aspiring to get into the hotel space. And it's become a little bit more complex than even five years ago because a lot more competition out there than there was previously. But also the technology has changed tremendously today. You booked everything on your phone, and now you can even go to your room. You don't have to stop at the front desk. I have a question.

SPEAKER_00 8:43

This is a true story because you know I have little ones. And last summer we were traveling, staying in a hotel, and my sons were fascinated by the phone because they had never seen one like that.

SPEAKER_01 8:55

And you were like, I've only seen some other wires.

SPEAKER_00 8:57

So, my real question is as these are developing now, if you're getting a new hotel right now, are you putting phones in every room?

SPEAKER_01 9:04

Since we have we have to for safety security issues. If there's a fire or there's an emergency, then you call 911. We need the phones in there. I don't think anybody else is buying those phones. This is true.

SPEAKER_00 9:16

So, since you've got extensive experience and you've worked with different brands, we're curious. You've seen people succeed and I'm sure not succeed on both ends of this. So, what do you see as the biggest difference that drives them in either direction?

SPEAKER_01 9:31

It's about commitment and it's about being hands-on and having the right team, especially when you enter the hotel business. If you're not hands-on going to the hotel daily basis, working the front desk, even making rooms, understanding the business from each segment, whether it's housekeeping, maintenance, or front desk or sales, the ones that succeed are very much in their hotels and they hire good friendly staff because you want to your guests greeted with a smile when they walk in, which sometimes I walk into a hotel and the desk work sitting down.

SPEAKER_00 10:03

I'm finding this surprising, Tesh. Not that you know, you need to hire great people, that all lines up. But if you told me that someone's buying a hotel, I don't know. I think of like an extremely wealthy person, you're buying a hotel, and I I wouldn't think really that they're gonna be in there on a day-to-day basis. I don't think of it as a high-touch industry. Is that incorrect?

SPEAKER_01 10:24

Most hoteliers, you won't see them at the front desk necessarily, but they're behind the scenes and they're talking with their managers on a regular basis. They're going through their reports on a regular basis. In a hotel business, specifically in a limited service select service hotels, it changes a little bit. But your most important people are your general manager, your director of sales, your head housekeeper, and your head maintenance person. Those are your four very important people that are gonna run and also manage their team to make sure your hotel is operating at the best, highest level. I mean, we're in a 24-7 business. I think in the beginning, when you open a hotel or you buy an existing hotel, you want to be there to kind of understand how everything works. If you're not staying on top of your hotel, seeing where you can continuously make improvements, not just from a furniture standpoint, but also from a service standpoint and experience standpoint, that's how you're gonna be a leader in the market. And that's what we try to push with all our owners is hey, you want to be a leader in the market, get your act together and make sure you're keeping your hotel looking modern at all times.

SPEAKER_00 11:31

It's leading me to a thought. I know that your life philosophies are never take things too seriously and never quit. But you're in kind of a serious business. Like you got to make sure you're compliant, you got to make sure people are safe. There are rules and regulations around the type of industry that you're in. And also, I'm sure it's always got to be in your mind. Like, people are gonna leave reviews. It's almost like that sometimes can bring in the seriousness of things and make it not fun. But it seems like you did a great job navigating that and you've brought that in. So talk us through like our listeners are in all different phases, if you want to say, of where they're at.

SPEAKER_01 12:06

Life in general, right? You can get bogged down by the details, you can get bogged down by being so serious. But when you're so serious and you're not having fun, one thing I've realized in life, you can only control so much, and you can control truly how you react. So I can't control what questions you're gonna ask or how people are gonna respond at staying at my hotel. I can respond to how I react. Sometimes you've got customers that do take advantage of certain policies that you may have at the hotel. And yeah, sometimes it's okay to fire a client. My dad used to keep a black book at the motel, and guys that trash the room, we don't rent them ever again. And he'll tell all his buddies in the town, hey, don't rent to this guy because he trashed my room.

SPEAKER_00 12:46

I'm thinking of a reverse Angie's list, or you know, like ready to go on there instead of having the ranking of the hotels, the ranking of the people stay in them.

SPEAKER_01 12:53

Definitely.

SPEAKER_00 12:53

We just created a whole new product right here. Yeah, there you go.

SPEAKER_01 12:56

Today with TripAdvisor and the Google reviews and everything else, you've got to stay on top of it as an owner. Well, typically, whoever's managing the hotel, they're gonna be required to be proactive. You get a bad review, be proactive and responsive to all the reviews across the board. And now you can't control what people are gonna do. But for the most part, I think if you stay proactive, you stay positive, and you take everything with like a grain of salt and don't take it too seriously and get wound up, you'll continue moving forward and you don't quit. Every day is in your day. So wake up, big smile, and go back to work and deal with the that you gotta deal with.

SPEAKER_00 13:32

No matter what business you're in, you're always in a people business.

SPEAKER_01 13:35

I'm lucky that I've got a great team around me, people that support me and everything that I do. And at the hotel level, you've got to have people that understand so you can take a vacation.

SPEAKER_00 13:45

In someone else's hotel. Yeah, that's right. I want to dig into that a little bit, Tesh, because especially for people who are listening that run in the hotel industry, but even if not, you said something important and you said sometimes as a business owner, it's like overwhelming of all the different things you gotta this department and that department and keep all these things in line. So you said specifically for the hotel industry, the head of housekeeping, head of maintenance, director of sales, and your general manager. So take notes for anyone listening who's in the hotel. Those are your people. But Tesh, tell us is that like you're having constant meetings with them, or what does that look like to not have to be running all those, obviously, because you're running the hotel as a whole. But what's that look like?

SPEAKER_01 14:24

Typically, it's a weekly meeting going over, hey, what happened this week? What are we doing next week? And each department you're gonna meet with, whether it's the maintenance guy going through if a guest makes a complaint, hey, my AC wasn't working or my water was cold, this, that, the other. You take notes of those things and make sure those any maintenance issues are resolved. And then also looking at their time, how long is it taking to clean a room? And we want to always try to keep that time limit as simple as possible. MicroTel, which is one of our new construction brands, all our furniture is kind of fixed in and raised off the ground. So you got to manage all of those little things to continue to be efficient, not take away from the guest experience.

SPEAKER_00 15:05

I can be a candidate. I think I got mine about 45 minutes.

SPEAKER_01 15:08

When I lived in California before I go to college, my brother-in-law would be like, Hey, I need you to help me make some rooms up. We've knocked out like 10, 15 rooms in a couple of hours before I left for college. We were knocking it down like 15 minutes or one point.

SPEAKER_00 15:20

I'm sure your wife appreciates that today.

SPEAKER_01 15:22

Oh, yeah, I'm still the bed maker in the house today.

SPEAKER_00 15:25

I love it. I gotta tell you that we don't. A lot of times we always hear these stories, and I'm assuming that everything went perfect every time you opened a hotel and did everything, right? Everything was just like butter, smooth, and all good stuff. But usually there's some challenge that you had to overcome and share that part of that journey, that story, and how you made that comeback. Because I think sometimes people get discouraged when things aren't going very easily or well. They think, oh, I shouldn't be doing this because there's an obstacle or two. So tell us about an obstacle and how you overcame one.

SPEAKER_01 15:50

Obstacles are part of life every day, right? And you either let it affect you or you figure out how to get through it. First, one of the hotels we opened at the airport here in Charlotte, we had water issues because there's new construction. So you've got pressure issues, so you got guest complaints. So how do you deal with that? Well, your first few months of being open, you may have to give more refunds than you want because you are gonna have issues in the hotels. You should, but when you buy an existing property, you're probably gonna buy it with knowing that the assets got an upside, and the upside's gonna take some renovations or potentially rebranding. With our La Quinta brands, we take existing hotels and take a look at them and see if it makes sense to convert it to a La Quinta, which allows people that are in one of the industry, maybe they're in the mid-scale and they want to move up to the upper mid-scale. It does cost money, but when you're doing renovations, you have to understand that you're gonna get complaints. So you want to understand that we're gonna get complaints. Let's make sure either we refund these guests or you put the signs up. Hey, excuse our renovations.

SPEAKER_00 16:54

Aside from giving refunds, what else have you seen work in that space that keeps people happy, Tesh?

SPEAKER_01 17:00

The service is really the key. If you've got good front desk and you've got some good people that enjoy working with people, that will mediate a lot of complaints. And then, secondly, when you give them a reason to complain, when they drag up to the hotel and they see worn doors or your lobby's a mess, or this side or the other, or your landscaping is non-existent. So when people drive up, they've already gotten like a negative connotation in my head. Like, oh, I gotta stay at this old dump. And then they walk in and they've already got a negative. And then your desk clerk is, you know, reading the inquirer.

SPEAKER_00 17:34

Tess, I'm laughing because the one time I was in charge of booking hotels for Shay and I, we drove up and she said, You're no longer in charge of booking hotel. She has a skill set, that's not it. The exterior does matter. You know, my last question for you is you've been involved in so many different hotels and brands, and you've talked about that and you know how you experienced it growing up, living in a motel and being a part of everything that you were doing to how you run it now. So I'm curious, you know, a lot of the listeners too, they have families, and so they're trying to build a business alongside of building a family, and lots of times are happening at the exact same time, and you're trying to give both time, both attention. You've done that with your family as well. So, what would you share as an insight there for someone else and that?

SPEAKER_01 18:20

Understand there's no balance when you're trying to grow. Either people talk about, oh, you gotta have balance. No, you're not gonna have balance. What you gotta have is a good partner when you're trying to raise a family and raise a business. I was lucky in that my wife was able to raise my girls while I was constantly traveling and didn't see my kids all throughout the week. Even if I was home, I was working, I'd leave for work before they got up and would get back from work by the time they were in bed. And the other thing is keep your weekends for your family and don't be doing business. Can't always do that when you're first starting out, you're working seven days a week. But as you start growing, take time out for your family, take time out for your spouse, and that will make it a lot easier.

SPEAKER_00 19:00

Yeah, hopefully for a short period of time because you're paying the price on the front end so you don't have to be on the back end.

SPEAKER_01 19:04

Yeah, exactly.

SPEAKER_00 19:04

So so Tesla, there's people listening who are going, you know, I've thought about a hotel, I didn't even realize it was a franchise, I don't even know how this works. And it's kind of a two-part question. Is there any like trending thing going on in the hospitality hotel industry? And if I was interested in it, I want to do research, what would be my next logical step to take if I wanted more information or what would I do?

SPEAKER_01 19:25

Figure out what you want to do. There's two paths to owning a hotel. You want to acquire, and if you want to acquire, you want to talk maybe to the brokerage community. There's real estate brokers out there that all they do is work on hospitality and they have people that want to sell and people that want to buy. I think that's the easier way to get in. But you may be that hey, I have a vision for this hotel in my hometown, and I want to kind of do something that represents me. Then you call somebody like me, franchise salesperson. A good franchise development person is gonna guide you the right way. And we may not always get your business on the first try, but we're gonna create that relationship. Most people in the hotel business own more than one hotel. Most own several hotels. They start out with one and they grow either through their partnerships or other things. But it's an industry that once it gets in your blood, it can't get it out. I've been doing this for almost 30 years, and it's a great industry. And the people that are in this industry, most of them are always willing to help. You all you got to do is pick up a phone and just ask.

SPEAKER_00 20:24

Guys, thank you so much. I have learned a lot about the hotel industry. I am shocked by how much I didn't know or wasn't correct. I know. I mean, the biggest takeaway the first time we ever visited, besides the fact we kind of hit it off a little bit in a humorous way, was that I didn't know this whole franchise industry existed in hotel hospitality. So that blows my mind. And you said it's growing and lots of opportunities.

SPEAKER_01 20:46

A lot of the older generation, they're retiring their kids, they've become doctors or engineers or other things or doing other things. So they are looking to sometimes sell if there's people out there looking to get into the hotel business. There's never a bad time to get in the hotel business. You just gotta understand the numbers and talk to as many people as possible.

SPEAKER_00 21:04

Thanks for joining us for another episode of the Bill for Profit Podcast. If you know someone who is looking to get into the hotel industry or even just thinking about it, this is the episode for them. So share it. And remember, we are on Apple, we are on Spotify and YouTube now. Be sure to subscribe so you don't miss an episode. Absolutely. And then if you know of a great franchise story, go to iqforprofit.com and click the submission and see if maybe perhaps you can be a guest on Built for Profit. We are proud that today's episode was brought to us by Imperial Design and Display. You know, Elizabeth, when you walk into a retail store and you see all the products, the merchandise, the racks, all that good stuff. Yes, everything that distracts me. There you go. That's what Imperial Design and Display does. They are a US manufacturing company, which is big for me, all right, made in the USA. They do everything from design, installation to program management. They get it done. Yeah. And the caliber of brand. That they work with is very impressive. Not trying to be a name dropper. Drop some names. Here we go. We're talking GameStop, William Sonoma, Best Buy, Home Depot, Caribou Coffee, and some high caliber brands. Right. And not only do they make it look good, it's functional and they're cost conscious, which we love. So we are proud to have them as one of our sponsors for the Bill for Profit podcast. That is Imperial Design and Display. And Elizabeth, I have to give a little shout out. I love a good tagline. They have a good tagline. I uh let's move at the speed of retail together. So imperialdesign display.com and click on the link to get more information about Imperial Design Display. We'll see you in the next episode.