Chet Patel, Baywood Hotels | From Motel Rooms to 125 Hotels

Welcome to season three of Bed and Butter, the podcast where passion meets profession in the world of hospitality. In partnership with Southern Maine Community College, we're back with fresh energy and even bigger conversations. This season, we're talking with culinary innovators, a brewery entrepreneur, hotel and industry leaders, a TED Talk speaker and influencer with a purpose-driven message, as well as one of the top tourism execs in the country, all sharing insights that will inspire and elevate your journey.

So whether you're just starting out or aiming for the top, Bed & Butter is your go-to guide. Let's dive in. Welcome to the show. Today we're joined by Chet Patel, Senior Vice President of Baywood Hotels, which owns and operates over 125 hotels across 25 states.

A visionary leader in hospitality, Chad has helped drive Baywood's impressive national footprint. In this episode, he shares his insights on how people of Indian descent have become dominant players in the U.S. Hotel industry, and why the name Patel has become nearly synonymous with hospitality entrepreneurship.

It's a story of heritage, hustle, and hotel empire building. You won't want to miss. Well welcome my friend chet patel thank you for joining us here on bed and butter it's exciting to have you hey sean thank you for having me i know it's been some time that we've uh not seen each other but great meeting i know we met years ago uh sitting on these brand boards uh you know it was exciting get a chance to meet you through these years and become a friend a lot of the students will be happy to hear that your history what you've done how you've become you know the kind of hotelier that you are and it's a little different to us than some of our hoteliers you You have a lot of things you add assets to a company, not just necessarily checking people in and checking them out, but you've got a lot of other things that are really some assets I'd love to chat about.

Sure, sure. Yeah, Baywood Hotels, we started back in 2000. Actually, we're celebrating our 25th year. I'm senior vice president here at Baywood, one of the founders.

We basically develop asset-owned, ground-up development. Re you know repurpose we also take hotels do dual brands sometimes we go ahead and reposition them but i mean a little bit of everything for over the last 25 years we started out with choice ihe hilton and marriott that's kind of our core of 135 hotels now we've got a few in the ground opened about four hotels this year so we're still pretty active i know what it's like to open one hotel but boy doing four at a time it's like you remember which call was i on what did i say especially if you've got two in the same brand category.

Absolutely. But, you know, one thing, Sean, we've had an awesome team. You know, I've got quite a few partners that are very like I am across the country. So we kind of break up our roles and break up our projects.

So it helps a lot in that sense. I do sit on brand boards to, you know, bring that knowledge and expertise, you know, from the brands and to the brands. You know, honestly, it helps when you own and operate and build these hotels to let brands know what's going on. And we've had some challenges in the past with companies and just trying to figure out what's really relevant today with guests and what makes sense.

Value add is a big term that we talk about in our industry. And how do we make that happen when it comes down to really standards and prototypes and understanding what companies are looking for, especially with Marriott, Hilton, and IHC that we do a lot with. You know, it's interesting. I know I've sat in meetings and I listened to you and you say, someone will say something about a toilet.

You say, and we actually, we changed the type of toilet we had because of what you said in the meeting. It's been the best thing we ever did. But you could say the difference in this cost is $122 for this one. It's $127 for that one.

And people are like, how do you know that? You've got it because you're doing, how many hotels do you have now? We got about 135 now. Yeah, it's funny you say about it.

I know we're not at the level there yet, but it's easy to kind of forget what you have and what you don't when you're talking the number of numbers at 125. You could have 125 today and there's like another one that opens up in the next week or two. So that's pretty cool. No, I think what it turns out to be, again, we've got a great team.

I give a lot of credit to our team. Without our team, we'd never be who we are today. So we know, again, we operate hotels, we develop hotels, more or less all services above property level services is something we handle in-house. So if it's accounting, revenue management, HR, sales, development, we're pretty much all inclusive.

And everything we do is just owner-operator, got friends, family as investors. We really don't third party any hotels as far as management goes. We've got one or two, but they're just very close friends of ours. And there were situations where we had to kind of take over to help them out.

But that's kind of what we've been added. Whereabouts did you start? And then where are you in the country now? We started here in the Mid-Atlantic.

So if you think about Maryland, D.C., Virginia, kind of our core hotels, and we have a small office that's quite large now in San Antonio, Texas. So two particular markets that we were in started developing, buying some assets.

That's typically what we do is a cluster type of development management structure just because it makes it easier. So if we go to the market, we typically look at the market expanding it more than one. So we have that thought process in place before we even look at an asset in a market. We know when you've got one-offs, it's a lot harder to manage, a lot harder to get to, and making sure that we can really service the hotel at a level it should be.

With our structure with management and clustering it really helps provide that service and overall. Needed help that would need so yeah i think well you look at people coming out and looking for jobs a management company like yours or a hotel company like yours there's lots of different areas and i think that's what's unique is that your skill set might be different than somebody else's in the industry versus your cousin or your some other family but you've got a real strength in this whole development growth and actually we were talking earlier about i mean another whole part of a job is the renovating of hotels when you have 125 hotels and you've got to renovate every seven years times up to 21 years that's a lot of renovations yeah yeah at some point i mean we when most of our new hotels so been new builds so last seven years if you want to say and we've built a lot of hotels so really weren't due on renovations yet but now it's coming up on seven years so we're we're in the process of running quite a few i'd say close to maybe 10 or 15 a year at this point so again you know kind of had to create a structure and a team that can kind of handle that workload contractors go around the country now we're outside of san antonio in the mid-atlantic you know we've expanded out into colorado even california we're up in the new england markets down in florida florida is a big part of the growth of after covid there's a lot of growth down in florida so we've really expanded out into that market, even if you want to call it the Southeast, I guess, Tennessee and, you know, Carolinas.

So slowly we've kind of spread across the country. So let's, let's talk about the young Chet Patel. When did you, are you, are you from the United States or you're from somewhere else or how long have you been here and how did you grow up in the industry? Great question, Sean.

I grew up in South Jersey at all places. You know, my, my, my parents came as immigrant parents from India. My dad came on a student visa, went to Villanova for his master's degree in civil engineering. So obviously, because being in Villanova, it's kind of settled in the Philadelphia sub market.

I worked a few years and then someone along the way told him, you know, maybe he always wanted to be an entrepreneur, even though he was a mechanical engineer. I think it's instilled in most Indians, especially when you come from a farming background. They want to be your, you know, be your own boss. So someone got him onto the idea of hotels.

They can live in a hotel and still rent rooms. You're making money as you live at the hotel. There's not an additional expense for a mortgage payment for a home because where you live is a place that generates revenue. So that got him on to that idea.

So when he was looking for mom and pop motels back then, that's all he could afford in the South Jersey, Pennsylvania, Philadelphia area. It's kind of settled on the small one. And one of the reasons he decided to do it was because it had a great living quarter. He had three bedrooms, thought about his family, a kitchen, living room right behind the front desk.

So that kind of attracted him to this place. And to this day, you know, 55 years later, he still owns a hotel and I grew there, grew up there pretty much my entire life. I moved there when I was 11 months and left when I was about 25. So learned every aspect of the business.

There's no choice. You have to learn everything when you have a 29 room on the park roadside in. So that's great. Now that's a, so you've done all the things you've done all the jobs and the, and it probably helped you understand when you get into the business side of things a lot more about the business side of things because you did it.

Absolutely it really does sean and i think what happens we're putting in a position where you have no choice you know the only way you can make it work is if you learn the business or learn every aspect of the business right i mean i think the fortunate thing kids have today and the younger generation is that you view too you know if you think about how you fix the toilet how you run a room i mean there's a video on everything now back then it just got wet a lot when i was doing it i.

You don't solder the pipe, right? You don't hold the faucet, right? That's exactly a trial and error, right, Sean? There's another choice.

You try it and your mom and dad say, why not? Let's try it. And I think, you know, that's how you learn, right? Without just trying, you're never going to have the ability to learn.

So I learned a lot. I had always a knack and interest in, like, construction and building and building maintenance. You know, that side of the business. had to do everything again, maintaining the building and operating it and operating the hotel so i had a knack in construction so growing up you know i was at an interest in that that side of the field so today you know majority of my role is you know taking a look at prototypes looking at construction construction costs renovations expenses you know what's relevant today you know guest needs have changed over the years you know the guest traveler 30 years ago is not the same traveler today in age and the needs are different.

So, you know, when it comes down to our role, you and I sit on these brand boards is, you know, we push to make sure they get it. They understand what's important to guests and we thoughtfully think about how every dollar is spent when we're operating a hotel or building a hotel. I went on to AI. Yeah.

I am relevant. I still use AI. But one of the things I talked about is you've sat on boards where you've helped develop prototypes. That's right.

Cape committee that you and I serve on together, the asset committee, but also other committees to talk to them. And so I think that's what's kind of interesting is that they're looking to you and you are coming, you and other hoteliers like yourself and me are trying to give them a guideline saying, look, the customers don't like this anymore. But when you do this, it costs too much. Tell us just a quick thing about the most recent prototype you helped develop.

I think the last one, you know, I've sat on Hilton brand boards, especially on the prototype brand boards, you know, Homewood Suites is a good example. Great brand started about, I promise, back in, you know, the mid 80s, extended state brand, you know, design morphed around like a home away from home, right? Had the right amount of space guests would need in the rooms, a lot of room in the public spaces, kind of lounge out, whatever you need to do. If you're in situations as a guest where you know maybe you had a fire at your house and needed to stay somewhere this was a fantastic place to stay because it had all the amenities that a guest would expect of course it's not as the same as your house but at least something that was close by right and something that could make make work you know that brand was staying tired you know did it make sense developers found it not to be so friendly to build because of the square footage because of some of the requirements they had so brand leaders at hilton says hey let's let's decide to revamp this we got to come up with a new prototype so i got a chance to be on that board and on that committee to help kind of shape the brand was really interesting i don't think a lot of people know where these you know where you start you really start.

A piece of paper and figure out hey you know this is all the data we have this is what guests like about the hotel this is what they don't like about the hotel this is what developers like these developers don't like so how do we get to it where it becomes more developer friendly you know enhance the experience that guests were already having at this hotel that's 25 years old or this brand and make sure it's relevant today and you know it's probably about a year and a half process between meetings visits you know we had like a cardboard box to see if it was the right size room It's interesting how the process works.

It's really getting in, digging in deep to really understand what's relative, what's not. And that was fun. I got invited to go look at it down in, I figured, outside of Atlanta, I think. That's right.

Buford, Georgia was the first one that set up. Basically, Homewood Suites, it's the 10.0, which is the new prototype, new generation. Today, it really did something for the brand because now it became more developer-friendly.

The operating model was great to begin with. just got enhanced to make it more profitable. Developers love it. So now we've seen a lot in the pipeline, which probably wouldn't have happened without this work that happened in collaboration, I would say, with owners and Hilton to come up with this.

So as you know, in our industry, we've had a lot of new launches, a lot of new brands that have come up into the space under the umbrellas of Hilton, Marietta, IHG, Hyatt, all of them. And really the key has been really providing the right solution for a guest at the right time you know everybody has different needs everybody has different needs different times that they travel and what's the right brand for you so you know hilton's and married all of them have decided that hey let's come up with something that makes sense it also obviously helps grow the companies and you know brings a lot of value to everyone so got a chance to be part of that which is exciting and and i think sean you and i you know do get a chance to see some of this before anybody doesn't even.

It doesn't even know that's going to exist, right? We get a chance to make a change if we need to, if we don't feel it's right. We always think about the guests when it comes down to it, and obviously ourselves, because we're not going to be doing it just to do it. We need to make sure we answer questions to our investors and deliver to the bright margins and profits.

I know I sat on one that was product integrity from one of the brands, and one of the things used to drive me nuts as I matured is I can't see the shower. It says shampoo, conditioner, and lotion or conditioner, but you can't see it. And so I think in a lot of the brands, I go see them larger, and I'll figure I'm going to take partial credit for making sure. It's just every meeting I went into, make it large enough for an older person to see it.

So it's my contribution to the hotel business. So, Chet, let's take a step back again. Now, you talked about when your family came over as immigrants and started working it. So what's the relationship?

And I think it's a good story to tell about, you know, the name Patel is commonly associated with hotel owners. I remember when I first went to my first, I think it was a Choice Convention or Best Western Convention. We were in that brand for a while. You know, I went to my first convention.

There was like A through F. Then there was G through Rho. And then there was P. And then there was Q through Z.

Because there were so many people with the name Patel. What's the scoop with the name and how that transitioned to the hotel business in the United States? Yeah, you're absolutely right, Sean. And I think people, you know, as the Patels in general, as a surname, if we want to call it, saying like Smith, right, is a very common name.

It's almost like a trade name in a way. You know, most Patels, I'd say most because not all of them, but most of them were in farming. And what happened was that Patel name kind of came out of that. Patels were mostly farmers for the kings and the kingdoms, the land that the kings owned.

Patels farmed it. and that kind of, That's kind of the early days of the name. As they came over here. They got into the same kind of entrepreneur business.

A lot of them came over on education, student visas, either for master's degrees or something else. And then slowly, they started looking into buying businesses. And like my father and my uncle, who were probably pioneers in their time, they were pretty early on, mid-1970, to purchase a motel or roadside in South Jersey. There's probably a handful of Patels at that point that had hotels across the country.

So they were somewhat of a pioneer, at least a pioneer for their community in India. So as they saw this, people in India heard this. They wanted to come to the U.S.

and say, well, this is a great opportunity. Poverty is huge in India. It's third world at the time. So it's really hard to make a dollar if there is any opportunity they got, they took.

So student visa is very common back then. Everybody you know made sure that they went to school you know got themselves a visa to come here further you know continued education and then maybe get into some sort of business and the motels made it a little easier it was a place to stay like i said earlier so the whole family could stay there you know work there they don't have to they don't need a car even if they needed you know they don't need to go and go to work so it made it a lot easier so it was really catered to what they thought would be a good opportunity as far as business goes.

And they grew a little bit at a time. Each of them helped each other out. That's the key, I think, that people don't understand is that all the family, extended family, they'll help each other. Even financially, they'll help them out.

And all it takes is a few hundred thousand dollars for a down payment. A lot of these mom-and-pop roadside ends that were ripe for retirees, U.S. retirees, they just wanted to retire.

They were at a point in their careers and would pass the business on to someone else so they would even hold the mortgage so to come up with $100,000 or $200,000, ask a few friends and family. You know, they help each other out and that kind of started the next one. So little by little, as you saw, I think there's, I heard maybe 40% of all hotels are owned by Indians and maybe, I don't know, I mean 20% are Patels. So it's quite an astonishing number today about, you know, if you want to say 50 years later.

So let's, let's take it from that to things have changed. obviously there's multiple generations of the families and how maybe things have changed and how that has evolved into i mean your company's 125 hotels you're not doing mom and pop hotels so you're another generation doing a bigger bigger better kind of thing yeah i'd say somewhere along the line you know obviously there's only so many independent hotels in the country and franchising also became big in the 70s you know if you think about the early days of days in cecil bidet and And think about Hilton and Holiday Inn, Kenneth Wilson, I mean, Ramada, these are all kind of the premier brands at that time in mid-scale and even full service, right?

So they started popping up as the interstates in the U.S. Popped up in the 70s, late 60 to 70s. So as interstates came up, every exit ended up having hotels and restaurants and gas stations.

In some cases, all of it in one, like a day's in. So, you know, that became very common and a lot of the independent hotels started to kind of shy away, right? Guests started traveling to newer hotels so obviously people saw that and wanted to get into franchising so some of even my dad's generation got into franchising early to realize you know the value there and then slowly ourselves and myself and my my partners my partner's father got into franchising al al patel i'm sure you heard of him and you know we we got together in 2000 and formed baywood several of us and you know figured out you know this is probably the right way to go, you know, expanding our businesses and kind of keep them relevant with the way guests travel.

And now you have 125 hotels yeah that's right that's pretty and i think i think as as you've seen it in our industry and i think every industry is that loyalty has been a big piece of everything now right if if you get a cup of coffee you know how many people are are loyal to starbucks how many people are loyal to duncan i think the same thing happens as us even computers look at apple you know look at microsoft whatever company it may be so there's a following and i think that's was really kept the industry going, that the loyalty piece, the guest loyalty is a big piece of what drives our business.

Meaning Baywood's business, we kind of follow certain brands that people love and find markets to build them in. So we probably got five or six minutes left, but let's take it down another different path. Let's talk about, we talked about the evolution of hotels. Let's talk about the evolution of things that go into the hotels, like the technology, or how do we stay relevant?

And how do you stay relevant yourself, but also your company and your properties? What's happened in the last... 10 years, and then what's happening now? What's the thing going on now?

So I think what's happened with 10 years ago, if you think about internet, internet's really changed the way we operate. I mean, as a person, every aspect of ours has changed because of the internet. The way you shop, the way you live, the way you think. I mean, everything's happened since the internet, right?

And I think the way you communicate, the way you get information, and that's just that's a grown right exponentially now and with the introduction of ai i think technology is taking on a new new direction in my my perspective i think it's changing a lot more. Rapidly than it did before in the last say 10 years or 15 years and i'm not sure what's going to happen you know we think about 20 years from now who knows how we're going to in our business operate hotels we may even not even have people but i think at some level what i see is that The expectation, so if you think about a four or five or six-star hotel, the expectation is actually human connection.

Then we may actually see people, right? Physical people that are working a desk or cleaning a room or helping you at the restaurant. I think some of the hotels that we see in the economy space, mid-scale space, we may not be able to afford humans anymore or people that it might go to technology altogether. And if that means it's some sort of screen that pops up, almost like Jetsons, if anyone in the audience has seen the Jetsons, I think they were ahead of their time.

I mean, there's little screens that would pop up with a person on the screen and say, hey, how can I help you? And that may be the future of hotel business and the economy and mid-scale space. I'm, in a way, kind of nervous in the sense of what's going to happen. I feel like we're going to lose the touch of humans and hospitality, what it really means.

But in some cases, I think maybe the next generation is ready for it. They don't mind. They don't care. So we'll see how that changes.

To me, the thing that can happen is that, where the people can be people and not be functioning data or enters or that kind of thing. There's numeric painted glass. That's the new thing that's been, you know, it's new. I mean, this marriage is still on DOS.

So I've been wondering who DOS is, what DOS is, but, but that new painted glass, it's like you do one or two clicks and you're all done. And you can spend that now the time it used to take you 20 clicks to get to checking someone in. You can do it in two and you can talk to the person. So it might create even more hospitality, at least in the transition.

Yeah. Someday it might not, you know, you go to the airport and you, you really don't need to do anything other than just, you know, show you, show your patch. You don't need to check it. Yeah.

Well, I remember just a few years back as I'm in that long, maybe, maybe 70 years back where, you know, kiosk at the airport was like, Oh, people didn't want to use it. They still wanted to go see somebody at the check-in desk. Right. But today it's almost people, you know, gravitate to the kiosk or, you know, versus going to the desk, right.

They'd rather just, you know get the you know get their bag you know baggage tags put them on themselves and just drop off their bags right they rather go through that process instead of waiting in a line for somebody to help them so i get it i think it's just it's adaptation but it'll take time you know i think it'll take time but maybe not as much anymore you know as the generation changes you know younger younger folks for me personally how do i stay relevant i got my kids you know they're 25 and 23 they keep me relevant a lot of times i go what's the latest you know what social media platform should i be on now or you know you know i mean that's i think i think our our kids keep us relevant they know more than we do when it comes to this technology at least mine do i don't know about yours sean oh yeah my grandkids i don't know it does my grandkids could do it eight years old like swiping doing stuff that's right he said no this is how you do it and so yeah so we'll wrap it up.

We've got an audience out there, the younger folks than me, the students, both high school, college, but there's also a lot of merit execs and Hilton execs that follow the same podcast. So what would you say about, you've got a podium now, you want to say something to the younger people coming into this interview or thinking about it. What might you say about, So I think the struggle we've had is making our industry seem somewhat sexy. You know, there's other industries out there that they seem like, wow, that's an exciting place to be.

That's an exciting company to work for. It's like, how do we get our companies, meaning not only our development management companies, but even our parent companies, how do we make them a little more exciting and more open and kind of interesting to newer generations that are coming in? And I think that's the scary part is that What needs to change amongst ourselves to make us more attractive to people? We may not even have to change that much.

If you think about what's going on, the industries are changing. Other industries are changing so fast that the personal touch is kind of missing. And I think that's one thing we still deliver pretty well. The level of communication, the level of acknowledgement.

Within our company, we're always creating and making sure we have the best place to work. And collaboration is a big piece of that. So, you know, having an office environment, having a hotel environment where you see people communicate every day, I think that's a key. And I think we're losing that nowadays.

Well, Chet, thank you so much for being here. And I think, you know, we've been longtime friends, but it's great to be able to share friends with people aspiring to get into our industry. And I think I'd get into the industry if I listen to this and listen to you. So thank you so much for being here.

Thank you, Sean. Let's keep doing things for people. Absolutely. Thank you.

Thank you for joining us for another episode of Bed and Butter, the hospitality podcast produced in partnership with Southern Maine Community College. Subscribe to the podcast to ensure that you don't miss any episodes. And while you're at it, share it with someone who might benefit from these insights.