ATLANTA—Vision Hospitality Group’s Mitch Patel has focused on the fundamentals throughout his hotel career, and now he is taking the company in some new directions, both geographically and with new brand development.
The company will co-develop and manage the first Tru by Hilton hotel, which broke ground in mid-March in McDonough, Georgia. The company’s pipeline also includes several new brands and locations for the company—including a Moxy by Marriott set to open in Denver; a dual-branded AC by Marriott and Springhill Suites set to open in Nashville, Tennessee; and the company’s first independent boutique hotel, set to open this spring in Chattanooga, Tennessee.
“We’re breaking out of our Atlanta-through-Nashville region, and it’s hard to do but I’m excited,” said Patel, Vision’s president and CEO, in an interview during a break at March’s Hunter Hotel Investment Conference.
The company’s 38-hotel portfolio comprises largely Hilton Worldwide Holdings and Marriott International brands, with a sprinkling of Choice Hotels International and InterContinental Hotels Group properties. Right now, the company’s hotels operate in a four-state area: Georgia, Indiana, Texas and its home state of Tennessee. However, new projects—like the Moxy in Denver and a Hampton Inn underway in Wilmington, North Carolina—are helping the company push its boundaries, which is something Patel said Vision is more than ready to handle.
“We’ve grown in Atlanta and Nashville so much because we’re right there; we know the area intimately,” he said. “But it’s also about opportunity. When Hilton and Marriott launch new brands, there’s opportunity there, so we might as well do them ourselves.”
One example is the Moxy Hotels property the company is developing in Denver. It’s a new location for the company, but Patel said he is confident in the brand because of its Marriott affiliation.
“These brands, like Moxy and Tru, they hit on a trend that started with multifamily housing,” he said. “It’s smaller units, higher dollar cost per square foot, but great locations. It’s the same approach with hotels—we’ll give you a small room, but we’re activating the public spaces. A lot of travelers gravitate toward this, but they will not sacrifice on service or quality.”
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That reliance on brands is part of what has shaped Vision’s success, Patel said, and what provides insurance during tougher times.
“We want to make sure that in any market, we’re the first or second choice for the guest,” he said. “There’s only a finite amount of rooms. In tough times, you can get exposed, and that’s why we want to partner with the best brands. I don’t look at what these brands do for me in great times as much as what they can do for me in difficult times.”
That being said, Patel said he pays attention every day to how his company can anticipate what’s coming next and prepare for it. Part of that preparedness and analytical preparation he attributes to his education as an engineer.
“It all comes down to fundamentals,” he said. “We went through downturns in ’01, in ’09. I put my engineering hat on and went through the discipline, the logic and the problem-solving to get through it. I learned that in those markets, nobody is immune. We were down (in performance), but we were growing market share, so I learned to worry about what I could control.”
Part of that commitment to fundamentals means judging the best deals.
“If I can buy or build at $11,000 per key vs. $180,000 per key, of course I’m going to do that,” he said. “Development costs have gone up considerably, including land, construction and (furniture, fixtures and equipment), which means we have more difficulty making numbers work on hotels with more rooms. That’s why right now, brands like Moxy and Tru are more feasible when it comes to development cost per key.”
Plus, Patel said he likes how those pricing trends are lining up with consumer trends.
“The midscale segment is the deepest, and there’s a huge void there for affordable lifestyle (hotels),” he said.
Expansion into independent boutiques
Despite Vision’s tight focus on high-performing brands, Patel said he is most excited about the company’s first independent boutique hotel project, The Edwin Hotel, opening in downtown Chattanooga this spring.
“I’m spending more time on this because it’s intimate, it’s personal and it’s a passion project,” he said. “We didn’t want to do another branded hotel in Chattanooga, so we decided to do something different to bring people in who normally wouldn’t come into the market. Instead of competing head-on, we wanted to grow the market.”
Patel put a lot of time into developing not only the market mix for the hotel (“I did not want to screw up our batting average,” he said), but also the concept and execution. The new-build 90-room hotel is located in a Chattanooga neighborhood where the focal point is a bridge that draws a lot of foot traffic and visitors to recreation like art and wine festivals. The hotel is named after the bridge’s chief engineer, Edwin Thacher, and bridge themes will be dominant.
“We’re going to have a rooftop whiskey lounge, a great restaurant and we’re commissioning local art,” he said. “The theme is that we build too many walls and not enough bridges—that’s going to factor in to the hotel.”
Patel also said he likes the fact that during his engineering career, he was a bridge builder, and he likens that to the hotel industry as a whole.
“We are all bridge-builders, metaphorically,” he said.
Patel will affiliate The Edwin with Marriott’s Autograph Collection in part because while it is a passion project, he is committed to his plan for the hotel to attract new guests to the market.
“Leisure travelers love this type of boutique experience, but the business traveler coming in for the night wants loyalty,” Patel said. “Being with Autograph may not help leisure, but it will absolutely help us draw the branded business customer.”