Ohm Patel of The Witness Group on balancing conservative strategy with taking risks and staying just a little on edge
The Witness Group is the product of a merger between Alliance Hospitality and KB Hotel Group. When the companies came together, they not only merged their portfolios but their pipelines as well. Then, as The Witness Group, they inked a few more deals for good measure. “We are a company that has grown by leaps and bounds overnight,” CEO Ohm Patel says. “It’s a very exciting time for us.”
Both Alliance Hospitality and KB Hotel Group were regionally run management and development companies with close ties and strong family relationships. “We saw an opportunity to scale and to merge our portfolios and really bring some role clarity to the executive team and ownership by combining both companies,” Patel says. “In our first year we are very excited about our brand and our growth and strategic plan.” The Witness Group currently has 29 hotels under management and operation, which were collectively developed by both the companies, and a total of 10 hotels in their pipeline.
Ohm Patel is CEO of The Witness Group.
Aakash Patel is CDO of The Witness Group.
Sachin Patel is CAO of The Witness Group.
Sagar Patel is CIO of The Witness Group.
We are trying to break into the urban core, and we feel that this mixed-use element is the next phase in the industry, and we are trying to stay ahead of it from the get-go.
They do it all: with in-house management and in-house development, The Witness Group recently launched an internal investment arm to “attract savvy investors that are looking to get involved in hotel real estate.” And they have what they consider to be a very conservative approach to their investment model. “It has worked for us internally for this many years,” Patel says, “and so as a part of our growth strategy we wanted to now bring in outside investment as a part of the threesolution set.”
When he says “three-solution set,” he means that all projects are turn-key when it comes to new development. They already do all their own site selection and construction and then hand things over to their management arm. Adding the investment piece is a final step.
“Not a lot of companies offer all three solutions,” Patel says. “We are able to do that and bring more value to our deal,
and that is what sets us apart from other companies.”
Homewood Suites Columbus/Polaris, OH
Holiday Inn Express Columbus/Polaris, OH
Hilton Garden Inn West Chester, OH
SpringHill Suites Dayton North, OH
The Witness Group’s pipeline:
- Home2 Suites in downtown Columbus, Ohio, with 12,000 square feet of retail on the first floor, and the hotel lobby on the second floor. 106 rooms and due to open around the spring of 2018.
- Residence Inn in Middleburg Heights, Ohio, with 112 rooms and 10,000 square feet of retail space. Located by the Cleveland Airport and slated to open towards the end of 2018.
- A dual branded Marriott project in Keystone, Indianapolis. The Residence Inn and Springhill Suites will have 180–190 rooms in a dense corporate market and is scheduled to break ground in the spring of 2018.
- Hampton Inn & Suites and residential development right outside of Washington, D.C, in Rosslyn Virginia. The project is a redevelopment of an existing, older hotel, and will be a ground up 160-room hotel, expected to break ground in the fall of 2018.
- Hampton Inn & Suites as part of the mixed use redevelopment of an old 230-room Holiday Inn that was laid out over seven acres. Includes 40,000 square feet of retail and restaurant space, surrounding a 110-room hotel in Worthington, Ohio, a suburb of Columbus. Projected to open in the fall of 2019.
What The Witness Group is trying to do in many of their projects is integrate some retail space by doing the builds themselves and serving as landlord. Even the Rosslyn Hampton Inn will have 4,000 square feet of retail space as an amenity to the guests. “We feel like, from a select service standpoint, it really adds to the guest experience to have onsite retail built into the development,” Patel says, “whether that be a gourmet grocer or a restaurant, a Starbucks or Orange Theory Fitness.” Adding that retail component gives a competitive advantage because guests can choose to go straight from the parking lot to their hotel room upon arrival, or they may decide to walk over to the retail space for a craft beer or a burrito or a macchiato or perhaps even a yoga class before settling in.
Residence Inn Akron, OH
Homewood Suites Columbus/Polaris, OH
In today’s competitive market, Patel feels that it is “better to have a more strategic development plan.” In The Witness Group’s market, there are a lot of older hotels. “Gone are the days when you just go in and buy two acres of land and build your hotel,” he says. “We are trying to break into the urban core, and we feel that this mixed-use element is the next phase in the industry, and we are trying to stay ahead of it from the get-go.”
Patel also sees better financing options with that much national credit on the table and the prospect of long-term leases in combination with the hotels. “With the mixed use piece,” he says, “we feel there is a synergy there. And a lot of creditors may be happy with hotel financing right now, because the times are great, but if I needed to refi a hotel in, say, two years, we might be in the middle of a recession.” Building retail into The Witness Group’s pro forma will presumably help them regulate cash flow and keep their competitive edge, even in a downturn.
Hampton Inn & Suites Ashland, OH
Holiday Inn Express Westlake, OH
Residence Inn Akron, OH
From an ownership perspective, it’s a young group. All four were raised among some aspect of the hospitality industry, and their average age is 35 years old. CEO Ohm Patel’s father started Alliance in 2000, and Chief Administrative Officer Sachin Patel also comes from Alliance. Chief Development Officer Aakash Patel was the former head of the KB Group, and Chief Investment Officer Sagar Patel is the son of one of Alliance’s founders. Both the CDO and CIO have a background in consulting with Ernst and Young. The group’s focus is on converting their practice from the entrepreneurial style they grew up with to a more sophisticated corporate entity suited to today’s business culture and economy.
“With us being such a young ownership group,” Patel says, “we feel that we are seizing an opportunity, by merging, to really grow and scale very quickly.” The Witness Group’s pipeline actually projects out to 2020, so now they are focusing back internally, strengthening their management team, and recruiting more executives in preparation for growth.
“We have achieved success through staying conservative,” Patel says. “This is a great time, while the market is strong, to bring in the right talent to make sure we stay ahead of our growth. What we are doing now is investing back into our management, our construction, our investment. We have these three solutions for making sure we are ready for this rapid growth.” This is not to say that they aren’t looking at any other deals, but they are going to be much more critical and selective moving forward.
As for what makes “the right talent,” Patel says The Witness Group is looking for process-driven people who understand how to connect to others. This is, after all, a relationship business. “The kind of person we look for,” he says, “has the ability to methodically think through issues and problems, but at the same time can engage with the team for understanding and execution.” In true next-gen fashion, the team also seeks out people who are motivated in terms of long term growth potential and willing to navigate into new opportunities. “Being uncomfortable and being OK with that” is also very important to Patel and his partners. “Because,” he says, “that’s how you grow and learn. That’s how we have achieved success: by taking risks and being uncomfortable, we were better for it. So I expect the same from my executive level team.”
With in-house management and inhouse development, The Witness Group recently launched an internal investment arm to attract savvy investors.
This is sound advice for anyone in the industry, not just those hoping to join The Witness Group. Along those lines, Patel recommends pushing beyond one’s comfort zone, to network and talk to other people in the industry. “Don’t be afraid to ask questions and learn other’s practices,” he says. “You’ll be surprised how much people are willing to discuss about their success. It’s usually what their passion is, and when you ask somebody about their passion, no human being is going to refuse to talk about it.”
Something that sets the Millennial generation apart from their predecessors is a sort of adaptive unwillingness to take risks. Patel would like to encourage industry peers to think outside the box and not be afraid to feel a little awkward or anxious. Attend events, network, and ask questions. “I think that the biggest thing,” he says, “is not being afraid to call a CEO you may look up to. Say, ‘hey, do you have time to meet with me for 15 minutes to chat about such and such a thing.’ You may not get through the first time or the second, but eventually you will run into that person and they will remember you contacted them and be happy to share information with you.”
By Ashley Atkins