The Chawlas know secret of hotel success
Enterprise successful because of family ties, consistent focus
by C. RICHARD COTTON
DBJ Contributing Writer

Don't talk to Dr. V.K. Chawla about poverty. He lived it at an early age and the experience left its indelible mark.

The 68-year-old CEO of Chawla Enterprises, the leading hotel ownership and development company in the Mississippi Delta, learned by the age of ten that poverty was not for him. Or anyone else for that matter.

“After the fourth grade was a very dark part of my life,” Chawla says recalling his life in India. In 1947, predominantly Muslim East and West Pakistan were carved out of opposite sides of the Indian sub-continent.

Chawla's family lived in the western state of Punjab, near West Pakistan and the scene of carnage between Muslims and Hindus, which is Chawla's heritage.

“My father, two older brothers and uncle were all murdered by Muslims,” Chawla recalled. “Hindus started killing Muslims and Muslims were killing Hindus.

“I became a refugee. I had to start life at the age of ten. I spent six years, 1948 to 1954, in refugee camps.”

One of his biggest learned lessons, Chawla says, is that the road to success is through education. His doctorate is in water pollution studies, a field that got him to Canada and, later, to the United States.

Today, Chawla and his sons Dinesh, 38, and Suresh, 35, own six hotels in the Mississippi Delta. By the end of next year, that number will increase by 50 percent to nine, since three are in various stages of construction or development.

The hotel names include recognized brands like Hampton, Holiday and Comfort Inns. Chawla hotels by the end of 2005 will comprise three in Cleveland; two in both Greenwood and Greenville; and one each in Clarksdale and Grenada.

Chawla thinks by the time he takes retirement in two years, at age 70, this year's property count could be doubled to an even dozen.

“My father,” Dinesh said, “is 68 years old now and I think the task of building three hotels simultaneously is not as exciting to him as it once was.

“But it's the same story every time. He's always telling us this is the last one he's going to do.”

Dinesh admits that the development phase is what holds his interest while Suresh prefers managing the day-to-day operations of the properties. It's a great fit, and therein lies the most important key to the Chawla success.

Family.

“Dad is the head honcho,” declared Dinesh. “He does the wheeling and dealing, working with bankers and lawyers. He's in the driver's seat.”

“We try to get together once a week, mostly Saturday evenings, to eat and play cards,” said Chawla. He dotes on his four grandchildren, ages eight months to eight years.

“The success of our operation is predicated on family,” Suresh said. “We're like ‘Leave It to Beaver.' It's a perfect, perfect fit.”

Early on, Chawla's acknowledgement of the necessity for education was instilled in his sons. They each earned master's degrees in business administration within a year of each other.

“We were never forced to be part of the business and I would never force my kids into the business,” said Suresh.

He continued, explaining that the three Chawlas “each bring to the table a different strength.” Suresh is the self-admitted “people person” of the company.

“I'm the operational guy,” he said. “I love meeting with the guests and I love working with the staff, that's my forte.”

Suresh, who oversees the day-to-day of the three properties in Greenwood, Greenville and Clarksdale tries to hold weekly training sessions with each hotel's management staff and employees; he says it's not always possible to schedule them weekly but he likes the chance to interact with them. (By the end of next year, when all nine properties are up and running, the Chawlas expect to employ nearly 200 people.)

Suresh and Dinesh, who is charged with the three Cleveland properties, developed a training program they call Front Desk University. In a classroom setting, they teach employees from the most basic customer-service skills such as simply saying “Hello” in a pleasant manner, to more complicated matters.

The work is paying off. Dinesh said guest comment cards from his Holiday Inn Express have ranked the hotel 14th best among the 523 in the U.S. Of 25 in Mississippi, it's ranked first and it is number 31 of the 2,657 Crowne Plaza (the parent company) properties worldwide.

“I learned about running hotels by talking to the guests,” Dinesh commented. “I asked them, ‘What would you like in the rooms?'” Out of those queries came installation of groundbreaking amenities like coffeemakers, refrigerators and microwave ovens in the rooms.

“We give them what they want,” he said. “It's paid off.”

Still, Dinesh cares less for the day-to-day operations than he does for the development phase. That's how his father lured him into the business, by offering Dinesh a chance to help with the design of a property while he looked for a job in another field.

“I like the developing but the day-to-day is not as exciting as it was,” Dinesh explained. “It's a mental exercise for me to look at a piece of dirt and, then, three years later have a hotel there.” He confides that Monopoly, the real estate buying and selling game, was his favorite as a child.

“My brother handles the accounting,” Dinesh continued, “and I spend a lot of time looking at blueprints.

“I spent two days last week researching different toilets, which is not glamorous, but it could cost us thousands of dollars if we don't make the right choice.”

Dr. V.K. Chawla recounts that his foray into the hotel business was anything but easy – and certainly not the result of a long-term plan. He immigrated to Canada in 1965, where he served as that country's top water-pollution scientist.

“Then I wanted the American Dream,” he said. “It is true and attainable.” In 1976 he entered the United States and by the early 1980s, the whole family had become naturalized citizens.

Chawla didn't pursue his previous water work, instead buying a restaurant and convenience store; it wasn't long before he realized they were not the moneymakers he had hoped they would be. And, besides, Dinesh and Suresh didn't care for the two businesses.

“We had friends who were in the hotel business, and they urged my father to try it,” Dinesh explained. The elder Chawla struggled for a full five years trying to secure financing to build the Greenwood Comfort Inn, visiting bank after bank, but was eventually successful in landing an SBA loan.

That first venture almost proved their undoing after two contractors both went bankrupt during the project and plunged the Chawlas into incredible debt as they worked long, hard hours finishing the hotel.

Even more incredibly, the hotel began to turn a profit within the first six months. And it's been that way ever since. They also decided to stick with opening hotels in the Delta, within a 50-mile drive of each other.

Chawla has never forgotten where he came from — and he doesn't intend to return to the poverty that shaped him.

“I had no electricity in my house (in India) until I got my master's degree,” Chawla remembered. “I was so excited to be able to study under an electric lamp instead of a kerosene lantern.”

His future plans, not surprisingly, center around his personal war on poverty: “I will be more interested in community development and youth development, especially in the Mississippi Delta, after I retire.