An interview with Larry Patel of Liberty Hotel Group
- Larry Patel entered the hotel business with another dream in mind.
- Patel’s first investment was with Paragon Hotel Company in Anderson, SC.
- Liberty Hotel Group now owns 18 properties, with 8 more in the pipeline.
If Larry Patel, the man behind Liberty Hotel Group, were a professional golfer, you’d be wise to place your long and short bets on him.
On many golf courses around the world, the old adage holds true: Drive for show and putt for dough. This means that the long game—hitting the ball a great distance—while essential and impressive, is not the end of the road. The key to success is in the details, staying focused through a meandering green to sink that elusive championship putt.
Over the past 25 years in the hospitality industry, Patel has become a champion in his own right, through long-term strategic thinking and unwavering attention to every last detail.
So it might surprise you to learn that he is actually a pharmacologist.
A SCIENTIST STARTS OUT
In 1985, Patel graduated from Vanderbilt University, in Nashville, TN, with a MS in biochemistry and a dream of one day owning his own pharmaceutical company.
“Back then,” he said, “I worked as a lab tech at the Vanderbilt hospital. I wanted my own business, but I needed money.” A minimum of $8‒10 million was necessary for his goal of starting a research and development (R&D) pharma company. Once he’d saved a little from his job, it was time to find a good investment.
In 1992, Patel made his first venture into the hotel business—still focused on his dream. “I originally started with an investment in Paragon Hotel Company in Anderson, SC,” he said. This was a Hampton Inn in Anderson. Seeing a satisfactory return on his investment, he looked a little more closely at prospects within the industry. “I look at the bottom line for any business,” he said, “and construction was better than any other. I decided to build hotels.”
Because he already had interests in South Carolina, Patel said, “I wanted to start something away from Paragon, and I studied where the best steady market was at the time.” Deciding on the Liberty/Kansas City, MO, area, he built a Super 8, Comfort Suites, and Holiday Inn Express.
LIBERTY HOTEL GROUP IS BORN
In 1999 Patel started Liberty Hotel Group (LHG), which today owns and operates 18 hotels, mostly Hilton, Marriott, and IHG.
Larry Patel’s first hotel investment was in the Hampton Inn, Anderson, SC, with Paragon Hotel Group in 1992. (Image Courtesy: © 2017 Hampton)
LHG does everything: from construction to marketing to management, it’s all in-house. And it’s not just Liberty anymore. In addition to Missouri and Kansas, LHG owns and operates hotels in Boston, New Jersey, New York, Texas, Orlando, FL, and Brunswick, GA. “Basically,” Patel said, “we are diversifying geographically.”
Also, Patel is still with Paragon, what he refers to as the “sister company” of LHG. Through this sister company, LHG is an investor in 15 more hotels.
Patel is quick to remind anyone that, for him, “hotels are a hobby. I did it as an investment, and we’ve been doing it more and more.” But he never lost sight of his true goal. “I did put away pharma for 15 or 20 years,” he said, “but I always had in the back of my mind that I wanted to start a business.”
LHG does everything:
from construction to marketing to management, it’s all in-house.
Liberty Pharma, Inc. (LP), was founded in 2014. “We’ve been doing a lot of work with the FDA,” Patel said. In their R&D, LP does a significant amount of work on generic medicines. There, too, he said, “We don’t contract anything out. Just like with our hotels, we manage everything in-house.”
THAT’S SOME HOBBY
As you’ve probably figured out by now, Patel has not just been dabbling in hospitality. Yes, he got into the business as a means to another end, but he is serious about everything he turns his attention to. “I’ve been a life member with AAHOA (Asian American Hotel Owners Association) since 1992,” he said. That’s the same year he made his initial investment with Paragon Hotel Company. “I have been to every single meeting,” he said. Detailing some of the services AAHOA provides, such as legislative support, advocacy conferences, and franchisor/franchisee relations, Patel said he especially appreciates the state-level support. “They are very good about it,” he said.
Right now, LHG also has eight hotels under construction and slated to open in 2017 and 2018. This includes four Fairfield Inn & Suites (Marysville, OH; Walpole, MA; McPherson, KS; and Salina, KS); two Best Western Plus (McPherson, KS, and Grandview, MO); and two Holiday Inn full-service featuring the Burger Theory restaurant (Kansas City, MO, and Independence, MO.)
Patel expressed some trepidation over these new projects. “We were expecting the economy to get better,” he said. “A travel ban might affect the travel industry, so I am being very careful.” However, LHG’s current pipeline was “already in motion, signed in 2015. You just have to deal with it,” he said, “but there’s a lot of uncertainty with the new laws coming in.”
Holiday Inn Express, McPherson, KS (Image Courtesy: IHG)
Of course, nothing is ever truly certain. And not all long drives hit the middle of the fairway, even in the PGA. Three years ago, Patel invested in a 310-room hotel in Houston’s Crowne Plaza, “hoping that oil would go up and the market would get stronger. That didn’t happen,” he said, but Patel wouldn’t be the sort to throw his clubs in the water and stomp away.
He stayed the course and is rather philosophical, saying “at least the investment is surviving.”
I hope the young people will get some inspiration from my story.
In keeping with his theme of diversification, Patel also owns six convenience stores and six Subway sandwich shops. It’s his way of “balancing the market.” And any hedge fund manager or financial advisor will tell you that diversification is the key to long-term success.
LOOKING TO THE FUTURE
For now, though, LHG is going strong. “In another five years I’d like to retire,” Patel said. “I’m getting my son ready.” Raj Patel is currently studying in a joint JD/MBA program in Kansas City. He’s being trained by LHG and already working with the company. Patel’s two daughters are medical doctors.
He’s not just thinking about his own children though. Speaking of those who are just getting their start in the industry, he said, “I hope the young people will get some inspiration from my story.” But his story is an inspiration for all ages.
And what does the senior Patel plan to do in retirement? “I’ll do the same thing,” he said, “but part-time. I would like to take some vacation.”
By Ashley Atkins