Chip Rogers, president & CEO of the Asian American Hotel Owners Association (AAHOA), shares his thoughts about tireless advocacy, accountability, entrepreneurship and member-to-member networking.
Association Adviser: Tell us a little about AAHOA.
Chip Rogers: Many people are surprised to learn that we’re the largest hotel owners association in the world. Our 15,000 members own nearly half of all U.S. hotels. With billions of dollars in property assets and hundreds of thousands of employees, AAHOA members are core economic contributors to virtually every community in the U.S. We have 27 full-time staff in our Atlanta headquarters and five full-timers in D.C., including four focused solely to events.
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AA: How would you describe a typical AAHOA member?
CR: Our typical member owns a mid-scale, Holiday Inn Express, Hilton Garden Inn or Comfort Suites type of property. However, since the recession, our members have become more active in building and purchasing higher-end brands such as Hilton, Hyatt and Marriott. That’s an enormous growth area. When we started, membership was overwhelmingly Indian Americans. Now we have many non-Indian American hotel owners who are part of our association.
AA: How about geographically?
CR: Almost one third of our members are based in Texas, a very small-business friendly state. Unlike many other states, the business environment in Texas makes it easy to start a business and to be successful in small business. Texas welcomes business owners with open arms. As I’ll discuss in a minute, about half of our members are first generation hotel owners.
AA: Since its founding just 27 years ago, AAHOA has grown into the world’s largest hotel owners association. What has driven that impressive growth?
CR: Our strategy is somewhat old-school based on the number of live events and face-to-face meetings we hold. Members come to our events for a multitude of reasons, but one of the biggest is social— spending time with fellow hotel owners. On average, we host about 170 events a year. I don’t know of any association that holds that many events, but they are broken down into many different forms. If you’re a member of AAHOA or considering joining, suffice it to say, there’s an event for you not far away. We never stop providing members with opportunities to meet other with hotel owners and vendors so they can find out the answer to “what’s the latest?” What other opportunities are out there for investment, selling or financing?
AA: What are some of the biggest changes you’ve seen since joining AAHOA in 2009?
CR: Over the past three to four years, we have made a major effort to raise our professionalism in everything we do. In the past we may have been perceived as a social organization more than a business organization. We don’t want to take away the social aspect, but I think we’ve flipped that [equation]. When you come to one of our events, it’s going to lead to one of three things: making money, saving money or protecting your investment.
AA: What are some of your recent advocacy victories?
CR: For a number of years we lobbied at the state level to be SBA 504 loan friendly. That refers to loans that are very popular sources of funds for starting a business. During the recession, the federal government allowed SBA 504 loans to be used for refinancing. There were so many enterprises going out of business, particularly those with investments in real estate — and our members certainly fit that definition. So the SBA refinancing tool was used quite a bit during the downturn and it was highly successful. As the economy rebounded, lawmakers wanted to end the SBA 504 loan program in September of 2012. We lobbied hard for several years to reinstate it. We not only got it back, but we got it back on a permanent basis. Since July of this year, the SBA 504 refinancing tool is available for small business owners everywhere. That’s been our biggest federal legislative victory of the last few years.
AA: Chip, neither you nor your family are from the hotel business. How did your earlier work experiences prepare you for your current role at AAHOA?
CR: I don’t come from the hotel industry, but I have been investing in real estate since the age of 18. I mostly invest in multi-family housing (apartments), but there’s a fairly close relationship between that type of investment and hotels. My government and communications experience has been especially helpful in my current role. I served in the Georgia State Senate as majority leader. I worked in radio and TV for many years and even owned a radio station. Having leadership experience in any capacity is going to help you run an association — as is the ability to communicate effectively.
AA: What has surprised you the most since taking over the helm of AAHOA in 2015?
CR: Despite what you read and hear in many places, the American entrepreneur is thriving. While being an entrepreneur is more challenging than ever, I get the opportunity to work every day with people who emigrated to the U.S. without much, or whose parents emigrated to the U.S. without much. They are really the modern day example of the American dream. They take risks. They make sure their children are well-educated. They are always looking for a new investment. They really enjoy the opportunity to build something and work for themselves.
AA: What is it that attracts your members to the hotel business?
CR: It’s the family connections. Because so many of our members are related or connected, running hotels is something they tend to do well. Going back to the 1960s, the first people that came over from India were originally attracted by the opportunity to have a place in which they could both live and work. The vast majority of them lived in the very hotels where they were working — typically 20 to 30 unit properties. Fast forward to 2016, and now 80 percent of our members own branded properties up and down the entire chain scale. But it all started with people who borrowed money from a relative to buy a hotel in which they could live, work and raise their family and it just grew from there.
AA: What are biggest challenges faced by your members?
CR: The things we do on the advocacy side impact every hotel owner regardless of racial or ethnic background. We are there to help you. The new overtime rule is a perfect example. All of a sudden the government is raising the minimum [income threshold] from $23,000 to $48,000 a year and telling [hoteliers] you have to have that in place before the end of the year. That’s going to have a dramatic impact on businesses. It should be rolled out over a three year period, not all at once. Also, certain states are trying to pass a $15 to $17 per hour minimum wage. If you put $15 on top of the taxes that go along with that, wage is essentially $19 per hour, which can be unsustainable for certain jobs and skill levels, such as housekeepers, which don’t require a high school education.
We’re also trying to protect our members from the potential elimination of the franchise model which will make it easier for the National Labor Relations Board to unionize hotel employees. Members also have to deal with local governments who look at hotels as an easy source of revenues by raising the occupancy tax. We had a case right here in metro Atlanta in which one of the local governments was trying to impose a 49 percent property tax on hoteliers on top of the multitude of taxes that already exist. That type of thing is happening all across the country.
AA: How is AAHOA helping members with those challenges?
CR: We go to bat every day for members, keep them abreast of new rules and regs and educate legislators about the importance of our members to the state and regional economy. It also extends to the sharing economy. Our members are used to competition, but it has to be on a level playing field. In large cities like New York and San Francisco, you have [large scale] Airbnb operators buying entire apartment condominiums and renting out the room on a daily basis. These are not Mom and Pops renting out their basements. They’re effectively running a hotel, but they don’t collect occupancy tax and don’t live by any of the regulations that a hotel would have to live by.
AA: Do you have other special strategies for connecting with NextGen members and other important sub-groups?
CR: Again, our members are very social so live events are key. We have three groups inside the association that hold their own events: women hoteliers, independent hoteliers and young professional hoteliers. In July, we held a young professional hoteliers conference at Hyatt headquarters. We took a group of 25 to 30 young professional hoteliers interested in developing the Hyatt brand. They spent an entire day together learning “The Hyatt Way.”
We hold 10 to 12 events like that every year just for young professional (hoteliers) and we have found them to be very successful.
AA: Chip, how would you describe your leadership style?
CR: For someone to be satisfied in their role, they need to be fully invested on a personal level. The day someone becomes a clock watcher is the day they’re probably not going to work well with me. Because of that, I’m always trying to ensure that I’m giving people enough freedom to grow and advance in their current role or help them find a new one. I do as little micromanaging as possible. In my two years as president, we’ve had about 70 percent staff turnover. I knew that was going to happen since my hiring process is very different from my predecessor’s.
AA: How do you hire?
CR: I talk a lot about bringing in ideas, taking risks and expanding your role into other areas that can help the association. We recently had a young man in the event planning area who thought he might be good at sales. So we switched him over to sales and he’s been fantastic. If people tell me they’re looking for a 9-to-5 job where they close their laptop at 5 p.m. and don’t look at it again until 9 a.m. the next day, then this will NOT be the place for them. I give [staff] a lot of freedom to take care of personal matters during the day. Just do it. You don’t need to check with me. In exchange for that, if I call you at 9 o’clock on a Friday night I do expect you to get back to me quickly.
I don’t want to call it a 24/7 mentality, but it’s very much a “freedom of workplace” mentality. I’m going to judge you on what you get done, not on the amount of time it takes you to get it done.
AA: What do you like most about working in the association world?
CR: What inspires me is the number of members who volunteer to engage almost daily in support of the organization. It’s about getting to know them on a personal basis and hearing about their success stories. For instance, we have a member who took over a 20-room rundown hotel six years ago and now own three separate 50-room hotels. It’s a pretty impressive group of people.
AA: What’s keeping you up at night?
CR: The biggest challenge our members face is on the government side. It’s an almost monthly occurrence that something big and new will come along and impact their bottom line. It wasn’t always like this. Government used to give hoteliers more time to adjust to new regulations and implement them into their operations. Now it seems like they want our members to comply with the new regs almost overnight. That’s just not how business is run. That’s pretty scary. You can’t plan for the future if you know the future is going to be changing so dramatically.