Scion, American Idea developer: Hotels trump politics
Scion, American Idea developer: Hotels trump politics
25 JULY 2017 7:54 AM

Suresh and Dinesh Chawla weren’t looking for the spotlight when they partnered with Trump Hotel Group to bring the first Scion and American Idea hotels to fruition—for them, it’s all about what brands make business sense for their company. 

GREENWOOD, Mississippi—The international spotlight might be on all business ventures associated with President Donald Trump these days, but for the developers of Trump Hotel Group’s first properties in its two newest brands, it’s all about the local business of hotels, not the global business of politics.

By developing the first American Idea and Scion hotels, Chawla Hotels’ Suresh and Dinesh Chawla are giving physical presences to the two newest and perhaps most enigmatic brands in the Trump Hotel Group portfolio.

The Chawlas are converting three of their current owned-and-operated select-service hotels to the American Idea brand, which they will operate as franchises. Trump Hotel Group launched the midscale American Idea in June.

They’re also simultaneously developing the first Scion hotel, which they will own and the Trump organization will manage. Trump Hotel Group launched the four-star-level lifestyle Scion brand in June 2016.

Associating with these brands makes sense for the company and the region they operate in, said Suresh Chawla. Chawla Hotels owns and operates 17 select-service hotels in six cities across the Mississippi Delta, currently all under Hilton, IHG and Choice Hotels flags. The company was in the midst of developing its first independent, full-service property in Cleveland, Mississippi, to be called the Lyric in honor of the region’s blues music heritage, when the company chose to make the association with the Trump group.

“In March of this year, I was on vacation with my wife and kids and I got an email from the development director for Trump Hotels saying he’d read about our (Lyric development) in Cleveland, and he thought it may be a good fit for the new brand they were developing,” he said. “A wonderful dialogue started between the Trump team and us, not only about the Scion, but about some of our existing hotels possibly converting to their new (yet-to-be-launched) brand American Idea.”

Meetings with Trump executives followed, and Suresh Chawla said any concerns they might have had were alleviated when he and Dinesh met corporate leadership.

“I couldn’t believe these five-star people understood so much about the four- and three-star tiers of hotels,” he said. “It was a perfect fit—a perfect marriage.”

Meeting executives as well as property-level employees of the Trump Hotel Group brands sold Suresh Chawla on the association more than anything else, he said.

“I met a server (at a Trump Hotels property) from Bangladesh, and he was so proud of his fellow Southeast Asians being in on this venture,” Chawla said. “He talked about how the Trump family knows him and his background. I love that culture. It’s like the culture we have with our hotels here in the Mississippi Delta. We know the first names of our team members, and we try to help each other out. That was the clincher for me that made me want to do this deal more than anything else.”

Scion at West End
The Chawla Hotels full-service development in Cleveland, Mississippi, was set to be the company’s first independent hotel. With a story built around the region’s blues heritage, the hotel is located near the Grammy Museum Mississippi, which opened last year. The brothers envisioned live performance space and a new venture for the company, which until then had developed only select-service properties.

“I was letting my brother handle all of that,” Chawla said. “It was going to be our first independent, and we were trying to reinvent the wheel. I had concerns though about the F&B operation, the spa operation and the meeting facilities.”

That’s why he said he was happy when the Trump executives identified that project as a good fit for Scion.

“The wheel didn’t have to be reinvented, because we ended up getting a four-wheel-drive monster truck running the hotel,” he said.

Right now, the Scion at West End, as it will be called, is in development and will include approximately 95 guestrooms, meeting space, a spa and a pool. The brothers have reworked some of their original design and construction plans with input from their new partners, and the property is slated for a spring 2018 opening.

American Ideas in the Mississippi Delta
The Scion development is something Chawla describes as “so cool,” and the American Idea brand is what he calls “a great fit” that fills a need in the midscale segment.

“The Trump group is not taking a cookie-cutter approach to the hotels for American Idea,” Chawla said. “They want them to be consistent in product quality and service, but they aren’t being so restrictive that they’re saying it’s only for interior-corridor hotels, or only for hotels with a minimum of three stories.”

He said restrictions like that “are a huge problem for developers in these three-star brands of hotels that exist right now.”

He is in the process right now of converting three of the company’s existing interior-corridor hotels to American Idea properties, with a goal to open them under the new brand in 2018.

“I’m extremely happy with my current portfolio, but we’re going to represent four brand (companies) now,” he said.

Chawla said one hallmark of American Idea—a larger lobby and public space—really resonates with him.

“In five-star hotels, there are a lot of common areas where people can mingle and hang out and get out of their guestroom, but there’s not a three-star franchise out there that puts so much emphasis on the public area,” he said.

“We’ve shared an idea with (Trump Hotel Group) about wanting to put multiple TVs in the public areas so that when sporting events take place, people can hang out and watch,” he said. “And we also talked about having a small area where we can have music performances in the lobby. That concept of getting the public areas alive again is a unique feature of American Idea.”

Chawla said he appreciates the brand’s flexibility, and also his ability to suggest ideas and give feedback. His company is planning breakfast options for the American Idea hotels, as well as an evening reception, “not necessarily mandated by the franchise, but allowable,” he said.

And while the franchise doesn’t require all American-made products and FF&E for the brand, Chawla said that’s his plan for his particular American Idea franchises.

“They’re very receptive to listening to us,” he said. “There are a lot of good FF&E distributors not only based in America, but based in the South as well.”

He said the brand will offer a lot of opportunity for conversions and new-builds for the right owners in the right markets.

“Each hotel will have a unique flair for each local market,” he said.

“It’s helping us give a rebirth to some of our existing portfolio that needs the flag to justify the investment,” he said. “That’s key to developing this franchise. There are so many hotel developers sitting on assets that at one time were fantastic … and now because of certain limitations, they can’t get justification for the capital.”

He said the brand’s flexibility will help it establish a footprint.

“With development costs getting out of control, it’s difficult to develop a typical three-star branded hotel in Small Town USA,” he said. “With American Idea, I may be able to build a two-story, interior corridor hotel, maybe 50 or 60 rooms, and I couldn’t even consider that with the other big flags.”

All in all, Chawla said “99% of the feedback we’ve gotten here in Mississippi has been nothing but positive in associating with this company.”

“This was a business decision to improve hotels in the Mississippi Delta, and improve tourism here,” he said. “This had absolutely nothing to do with politics.”

Chawla referenced his father, the late V.K. Chawla, who built his business and community involvement in the Mississippi Delta.

“Because of my father, we are respected well enough here for people to understand,” he said. “My father’s legacy was incredible. For 38 years (here), he never dealt with any unfair treatment, and was respected for his hard work and involvement with the community. If you have that good will, there won’t be problems to deal with. People are very excited about these projects.”

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