A life of service and leadership

Alkesh Patel: Founder of Evergreen Hospitality Development Group and master of the strategic plan.

“I could write a book about my AAHOA experiences,” former chairman Alkesh Patel said during our interview. “It was the best thing that happened in my life."

That’s saying a lot for someone who’s “always been in the hotel industry.” When Patel first came to the U.S., his sister owned a small motel in Vancouver, Washington. Like many other industry families, they lived in that motel. And that’s where Patel learned the business, running the operations while attending high school and college.

Evergreen Logo
Evergreen Hospitality Group

Evergreen Hospitality Group, pictured left to right: Devang Patel, director; Alkesh Patel, CEO/CDO; Jigar Patel, MD, director; Mukund “Bobby” Patel, CFO; Bhavesh Desai, director; Divyesh Desai, director.

The early years

He actually grew up with four sisters. Their father passed away when Patel was just three years old, but his mother remained a strong and present influence in his life. “My mom taught us not only be honest to yourself,” he said, “but be honest with people who are around you.”

The siblings formed a business partnership, and their honesty of practice drew other family members and friends to join them. “During the course of 30-plus years,” he said, “I was involved in more than 27 hotels, retail operations, and different kinds of businesses. Limited service, full service, independent hotels, all kinds of trades with the other members of the board.”

In 1989 when the Asian American Hotel Owners’ Association (AAHOA) was first formed, and the Pacific Northwest chapter was being developed, Patel got involved as a volunteer and later became a regional director. He was actively involved in AAHOA for nine years before becoming an officer in 2008 and then chairman in 2012, serving a total of 14 years.

Austin Texas Tru by Hilton Workstations

Austin, Texas, Tru by Hilton workstations

Austin Texas Tru by Hilton Lobby

Austin, Texas, Tru by Hilton lobby

As he learned the industry, Patel recognized the importance of having a strong foundation to build an empire on. From 2008 to 2013 were “really tough years,” he said. Becoming an officer of AAHOA helped him see all the lodging industry problems that members were facing. It was easy to tell which people did not have the structure and foundation in place, because those were the ones who suffered the most when the economy faltered.

I decided to sell everything that was more than 10 years old, just start buying land, and then develop only Hilton, Marriott, and Hyatt flags.

When Patel finished his chairmanship, he turned his focus toward laying the groundwork for his own company so he wouldn’t encounter those same problems he’d witnessed. “I decided not only to have a good foundation,” he said, “but also a good business plan and good brands. I saw that specifically with the Hilton, Marriott, and Hyatt brands, because they have really good support and loyalty from guests.” He recognized that the trends were changing, and even if he remodeled his old properties, he said, “these are still the old properties. Infrastructure-wise you are going to face problems.”

So Patel and his partners decided upon an interesting action plan: “We figured the market was pretty good, and we could get pretty good prices,” he said, “so I decided to sell everything that was more than 10 years old, just start buying land, and then develop only Hilton, Marriott, and Hyatt flags.”

After selling everything in 2013, they acquired a large amount of land with the intent to develop it. However, this is a three or four year process, because most of these properties are not shovel-ready. “You find a piece of dirt that is in the right location,” he said, “but then you go through the hurdles of zoning changes and approvals and such. There was risk involved, but I think I was blessed that my board understood that even if it took four years, it was the right move. We all got together, and right now that’s where we’re at: developing 12 projects.”

Leadership

A unique aspect of Patel’s service at AAHOA was the opportunity to learn from others’ leadership. In fact, he says, “the toughest part of that job was: How can you be a leader of 32 other leaders?” They certainly respected him as chairman of the association, just as he learned to respect everyone there. “You just didn’t know,” he says. “Walking the floor, if someone came to you for advice, you just didn’t know how big an empire that person had. When you deal with a lot of leaders, you have to keep your ego on the side. You have to be learning always. You just don’t know. A guy with one hotel might give advice, and a guy with 40 hotels might ask for advice."

Hampton Inn Hotel

Reno/McCarran Hampton Inn & Suites

But Patel was able to be an effective leader, who put a strategic plan into place and adopted governance in his time. “Anytime something new happens,” he says, “it is always challenging. Because I put my heart into it, I saw the challenges and adapted that to my real world when founding Evergreen. When laying the foundation for Evergreen, I thought about what we had done with AAHOA. That 14 years gave me a lot of wisdom.”

You find a piece of dirt that is in the right location, but then you go through the hurdles of zoning changes and approvals and such.

Evergreen Holding Company was formed in 2015, after Patel and his partners sold all of their properties. “When I was serving at AAHOA,” he said, “for 14 years I was not able to grow my company.” Whenever the opportunity came, he and his family and friends just bought up properties, which he managed under Pacific Northwest Hotels Management. “When I got done with my chairmanship in 2013,” he said, “I decided that I was personally only going to develop new hotels or acquire Hilton, Marriott, and Hyatt flags.”

Hotel Residence Inn Marriott

Clackamas, Oregon, Residence Inn by Marriott

Hotel Tru by Hilton

Hazel Dell, Washington, Tru by Hilton

He named a board of directors and serves as chairman and CEO. “My board members are very important to me,” he says emphatically. “My board of directors are my strength. Even though I’m chairman and CEO, they are behind me and they are my partners. Evergreen was formed with the similar philosophy of everyone’s experience and similar plans of growing together,” he explains. In July they broke ground on three projects, and every 90 days they’ll be breaking ground on two to three projects, so by 2018 all the construction of the projects will be done.

“Right now we have a strategic plan that by year 2020 we should have 20 hotels under development or completed,” he said. “In 2015, when we got together, we said in five years we want to develop 20 properties, and we are well on our way to that goal right now.” The current pipeline has a total project cost of $250 million, with another five under development that Evergreen will be announcing in the next six months as soon as their due diligence is done.

Evergreen has properties in five states right now (Washington, Oregon, Idaho, Nevada, and Texas) and is planning an acquisition in one other state, so they are not limited to developing in the Pacific Northwest. In fact, Patel said, they are “looking for opportunities anywhere.” Everything is also not focused solely on the United States. “We are also looking to develop internationally,” he said, “and will be making some announcements next year.”

We are also looking to develop internationally and will be making some announcements next year.

When pondering a potential project, Patel says Evergreen is driven by the markets and where there is a need. “With the relationship we have with the brands,” he said, “they will let us know. We are at the stage now where, a lot of times, when there’s opportunity in certain markets, the deals have been coming to us.” He gave examples of some cities and conference centers where there was the need for a hotel and Evergreen was approached. They always do the due diligence to see if it makes sense to go into that market. “Right now,” he said, “we are at the stage where we don’t go look for projects, projects have been coming to us.”

Best practices

One hallmark of Evergreen is its work ethic. Patel calls today’s labor force “most challenging.” Indeed, even as costs have gone up, the quality of labor is more important than ever. “What’s unique about us,” he says, “is that we have a profit sharing program. Not only do we give goals, but we do profit sharing with all the departments. Every employee can see revenue and profits generated, and they will benefit from their hotel’s success. Not only the GM gets bonuses, the housekeepers get bonuses too.”

Many companies would never think to share their P&L information with employees, but at Evergreen everyone can see this at the monthly meetings. When employees make money for the investors and the ownership, then they can feel confident that there is a long term job for them. From day one, even the most entry-level employees can see everything. “It’s transparent,” Patel says, “and that’s the culture we want for all our hotels. The whole team works together, and if one member fails that’s going to reflect on everyone. They all work together to succeed, because if the hotel is successful then they won’t have to look for another job. We are creating job security.”

That said, while the market is still strong, Patel would advise caution. “I believe anything that goes up has to come down,” he says. “We’ve had strong growth, and the slowdown will come. Development has become so hard in the U.S.” He predicts another 12 months of strong RevPAR and occupancy growth before we might see a slowdown. However, he predicts that it won’t be as dire since changes have been made to the lending environment and debt structure.

“I would highly suggest,” he says, “that it is better to have one good property than five bad. Go with the right brand, grow cautiously, and have enough equity in your property so if a downturn comes you are happy and not struggling.”

WHAT’S IN THE PIPELINE FOR EVERGREEN?
1000 ROOMS, OVER $200 MILLION, INCLUDING:

  • Vancouver, Washington: Hyatt Place By Hyatt
  • Tigard, Oregon: Hampton Inn & Suites By Hilton
  • Hillsboro, Oregon: Hyatt House By Hyatt
  • Oregon City, Oregon: Hampton Inn & Suites By Hilton
  • Portland, Oregon: Residence Inn By Marriott
  • Sherwood, Oregon: Hampton Inn By Hilton
  • Boise, Idaho: Candlewood Suites By Intercontinental Hotel Group
  • Vancouver, Washington: Residence Inn By Marriott
  • Vancouver, Washington: Tru By Hilton
  • Reno/McCarran, Nevada: Hampton Inn & Suites By Hilton

Images courtesy: Evergreen Hospitality

Feature Image courtesy: Downtown Vancouver, Washington, Hyatt Place.

By Ashley Atkins