As chief executive officer of Arbor Lodging Management, the management arm of Arbor Lodging, Sheenal Patel leads general corporate strategy and all efforts related to property management of the company he co-founded with partner Vamsi Bonthala some 12 years ago. The former investment banker recently described for LODGING how his hotel management approach has evolved over the years.
Where is Arbor’s growth coming from?
We are currently growing by acquisition. We purchase hotels, renovate them, and upgrade them. That has been the historical driver of all our company growth, although we are now working to develop third-party engagement, too. Our evolution as a management company is being affected by the volume of available data and our ability to analyze it. We’re working through a few systems right now that will help us quickly access information that we can stake decisions on, everything from GSS to forecasting. This is not just for ourselves, but so that we can share it with our partners, GMs, stakeholders—pretty much anyone who wants to know. We pride ourselves on being completely transparent about our decision-making process, including how our rates are determined.
Which, if any, of the current industry trends will you be incorporating into your management strategies?
The big trends we need to keep abreast of pertain to OTAs and revenue management. Revenue management is changing; although technology and systems can quickly determine rates, these systems must be properly managed. This involves rates at different levels, different lengths of stays, packages, etc.—pieces that still require a lot of human work. As for the OTAs, they are expensive and there are a lot of them, but we need them. The challenge is to optimize all those relationships so that we can maximize revenue under the entire revenue curve.
Is there anything in the industry keeping you up at night?
Our industry is being strained by the difficulty of hiring qualified employees, and at the same time, the rising cost of benefits, which continue to increase at a significantly higher rate than RevPAR. Rather than offering a one-size-fits-all package, our creative benefits strategies are helping with our benefits costs while keeping employee satisfaction high.