No substitution for happiness in the recipe for success

It’s no accident that Jason Cheng’s company is called Friendwell. When I ask what services the company offers, Cheng tells me, “We pretty much don’t offer services except to ourselves. This is a friends and family ownership company, managing hotel and real estate investments of relatives and friends.”

The company is “very concentrated” in New Jersey, with 13 hotels. It’s where Cheng grew up. “I came to the U.S. when I was 13,” he said. “I guess it was fate. I’m grateful to God for putting us here. We’re so close to New York―it was a wonderful starting point for the business.”Friendwell Group of Companies also has two hotels in Pennsylvania.

Friendwell Group
Crowne Plaza Harrisburg PA

Crowne Plaza Harrisburg PA

Cheng has been in the hospitality industry since 1996, when he started with one hotel. “My partners have been in the business longer than I have,” he says. In fact, they still own the first hotel he started with. “That’s where we started to manage property personally,” he says, “and now we have 1500 employees altogether.”

And those employees are crucial to his success. Friendwell’s goal, he says, is to “provide opportunity for investors.” To do that, he maintains a steady belief in the Marriott formula of “happy owners equal happy employees, which in turn equals happy customers.”

Happy owners equal happy employees, which in turn equals happy customers.

Embassy Suites Piscataway NJ

Embassy Suites Piscataway, NJ

Crowne Plaza Newark Airport NJ

Crowne Plaza Newark Airport, NJ

Customers. Employees. Owners. This is Friendwell’s corporate value: CEO. And Cheng says, “If owners are happy, they will continue to invest; if employees are happy, they will continue to work; and, of course, customers’ continued happiness is crucial to success.”

There have been some bumps along the way, mostly industry-related. “I’ve been in the business for 20 years,” Cheng says, “and back then we didn’t have Hotels.com or the OTA (online travel agency) business. But they came in and took part of our profits. We’ll have to make up what we’ve lost to OTAs in coming years.”

Things can often be both a blessing and a curse. Happy as Cheng is to be in New Jersey, “the local government is becoming expensive,” he says. “Property, occupancy, and sales taxes make us less competitive than surrounding states.” And Friendwell has about 3,500 rooms altogether, making them perhaps the largest in New Jersey in that sense.

Sheraton Mahwah Hotel NJ

Sheraton Mahwah Hotel, NJ

“So far,” he says, “we are blessed by God.” Cheng isn’t just paying lip-service, either. As a matter of fact, he started a Sunday church service at the Crowne Plaza Hotel Edison. “We started by thinking it would be providing a convenience for people traveling away from home,” he says, “and we found it to be very popular.” But it’s not just hotel guests who enjoy the spiritual boost; employees who wish to attend the services show up on Sunday mornings, and even those scheduled to work on a Sunday are permitted to attend church for an hour and then return to their jobs.

“It’s very rewarding,” Cheng says, “and it actually helps the Sunday business.” He got the idea from a Christian friend, and currently about 30 to 40 people show up for worship. “I would like to start one at every hotel,” he says earnestly, “but we don’t have enough pastors.” The “CEO” principle comes into play here as well: Sunday services are a treat for guests and employees, and therefore fruitful for owners as well.

But the biggest question for Friendwell at the moment is a little more personal than internet traffic and government regulations. The group will either go public or make a conscious choice to stay private. “We are at an intersection,” Cheng says, “and we have to decide which way to go. At this point we have to figure out if we’ll go public and get bigger, or continue to grow like we’ve been doing in the past with friends and family.”

Lancaster Host Resort PA

Lancaster Host Resort, PA

Crowne Plaza Harrisburg Hershey, PA

Crowne Plaza Harrisburg Hershey, PA

They’ll make a decision within a year’s time. Cheng is rather ambivalent, ready to bow to his partners’ wishes. “We’re preparing for an IPO,” he says. “Just in case.”

Friendwell has partnered with APA HOTEL, the largest hotel chain in Japan, to bring the brand to the U.S. APA stands for “Always Pleasant Amenity,” and their motto is “Best for the Guest.” According to the website, the brand is “based on the concept of providing the warmth and comfort of traditional Japanese inns, the refinement of progressive city hotels, and the reasonable price of business hotels.”

Toshio Motoya is founder and CEO of APA. “They have more than 350 hotels and collectively own more than 70,000 rooms,” Cheng says. “Motoya is probably the largest in the world as far as number of rooms. Well,” he adds, “maybe Disney owns more.”

A year ago, the APA HOTEL Woodbridge opened in New Jersey, five minutes from the Metropark Train Station. “It’s an honor that he picked us to be his partner in the U.S. to start the franchise business here. We have opened the first APA HOTEL [in the U.S.] and we are starting to explore the APA Asian style of hotel service and see how we can incorporate the culture.”

The Friendwell Group is drawn to properties that are “value-added,” Cheng says. “They can be distressed and then turned around, and that’s what we like to buy because we can create value for the ownership.”

For the moment, however, the pipeline belongs to APA HOTEL.

Lancaster Host Resort PA

Lancaster Host Resort, PA

“Right now,” Cheng says of Friendwell’s future projects, “we are exploring the standards for potential APA HOTEL franchisees in America.” That exploration includes figuring out how to best incorporate the Asian style of service into the stateside culture. “We are still evolving,” he says, “testing the Japanese experience— the Asian experience—in the American market.”

At this point we have to figure out if we’ll go public and get bigger, or continue to grow like we’ve been doing in the past with friends and family.

Because APA HOTEL is an Asian brand, once those standards are set Cheng expects to open in cities with flights from Japan, such as New York, Boston, Washington, D.C., Los Angeles, and San Francisco. But this is also in keeping with Jason’s expectations for the U.S. hospitality industry. “I think the U.S. market—especially major cities like New York, Boston, and L.A.—is going to grow because of foreign travelers,” he says. “The [new] administration’s ban hurts us, but the trend for the long run will be that more and more travelers come to the U.S. because of relative ease of flights and transportation. If we stick to the big metro areas, the hotel industry should grow.”

A hallmark of APA HOTEL is attention to energy- and water-efficiency. Guestrooms feature such amenities as volume-regulating faucets, LED lighting, and TOTO washlets. APAs are also all located within a short walk from a train station.

2035 Lincoln Highway, Edison NJ

2035 Lincoln Highway, Edison, NJ

Sustainability is on everyone’s wish list these days, but Cheng says that Friendwell is also exploring what the next-generation traveler is looking for as far as room size, decor, convenience, Wi-Fi capacity, and services. “For example,” he says, “we are developing software so customers can use their smartphone to order food or contact the front desk for requests, such as needing extra towels.” The software will also track staff response. “That should be up and running in our hotels by the end of the year,” he says. “We’ve spent close to $4 million to develop this software.”

Anybody who wants to be in hospitality must have a passion for the industry.

This sort of willingness to be on the leading edge is built into Cheng’s character. “Anybody who wants to be in hospitality must have a passion for the industry,” he says. “You must like people, because you will meet different people every day.” And yes, it can be lucrative, but “expect to work hard,” he says. “This is a 24/7/365 business, not nine to five—if people realize that, it’s a good business. You will never be phased out; this industry will always be needed.”

ABOUT FRIENDWELL MANAGEMENT GROUP

Friendwell Group of Companies specializes in the acquisition and management of income-producing real estate, such as shopping centers, office buildings and hotels. People make up the company. At Friendwell, each customer is important and every member of the team has essential contributions. From the CEO to the customerfacing employees, Friendwell is aware and proud of the fact that they are in the hospitality industry.

Information leads to improvements: Friendwell takes pride in an exceptional Management Information System that provides management with the data needed to optimize performance. Revenue analysis, labor analysis, breaking-down guest satisfaction trends, staff’s problem resolutions pattern, sales team’s activity journals; Friendwell is able to make use of every bit of data to continue improving themselves.

Images courtesy: The Friendwell Group