Successful Hotel Magnate Sunil Tolani
Los Angeles, June 22, 2012
Dilip Butani/ Gary Singh
From Rags to Riches is the story of Social Entrepreneur, Philanthropist, Humanitarian Sunil Tolani, who has made his fortune from scratch, solely relying on his grit and determination.
Sunil’s Prince Organization is an Orange County - California, based Hospitality Company that owns award winning hotels franchised by World's largest hotel brands like IHG, MARRIOTT, HILTON, CHOICE, BEST WESTERN, HYATT and STARWOOD. At present Sunil is working on a goal of having at least 1 outstanding hotel in each state, by year 2015. Sunil currently resides in Orange County with his wife Neelam and two sons Krish and Aryan.
When asked, ‘Why franchise branded hotels?” Sunil replied, “Brands deliver experience to the guests and to the owners we get RevPAR performances which mitigates the risks and maximizes the risk-adjusted returns.”
Sunil was born in Mumbai in 1968. He was raised by his parents along with his younger brother and sister. He finished his formal education at Bandra and got into his family business. In 1993 he had to forgo his college education, dropping out of 2nd year college and left for the U.S. He arrived in Los Angeles and started his first job as a cashier at an Arco gas station at less than prevailing minimum wages. As he could not afford a car, he was forced to walk three miles to and from work every day. Thereafter he took another job as a driver with Canara Technologies at $750/ month, a distributor of computer peripherals and parts. At that company, he worked his way up the ladder and become a vice president overseeing its semiconductor division at a salary of $ 4000/ month including benefits: a Mercedes car, lunch, phone and medical benefits. He also networked with the industry’s business leaders and executives and in DEC 96 started a memory trading division for PRINCETON TECHNOLOGY INC, where he was the sole trader, trading billions of dollars worth of memory chips making millions of dollars in commission. In June 2000, Sunil decided to take an 80% stake in a semiconductor company, a Memory Card International, Inc., in the city of Fullerton in the year 2000. To date, he is the 80% majority owner where he again traded billions of dollars worth of chips. Though the semiconductor business has significantly slowed down, he still services a handful of clients and customers.
Sunil started buying and selling homes in new developments. Seeing signs of appreciation, he started buying more homes. When the real estate market started showing signs of slowing down in 2006-07, he went thru a lean. He was advised by his well-wishers, lawyers, financial advisors to cut his losses and declare bankruptcy in the real estate business, but he did not do that. His parents, wife, family and he wanted to follow good principles - cheating, deceit, losing are not in his dictionary, as he covered all his losses.
He went to his uncle, Ashok Israni, chairman of Pacifica Host Hotels, who introduced him to the hotel business, which attracted him because of its daily high margin cash flow. REST IS HISTORY. Today, in less than 5 years, he is on the route to become a billionaire. Sunil says, “We believe in delivering excellence. It is this unwavering commitment to our founding beliefs which continuously guide us to succeed in any marketplace and through any economic cycle.”
With an internal “Committee for Excellence,” Tolani’s hotel group also focuses on maintaining workplace diversity, including the “advancement of women and minority team members for promoting diversity and building an inclusive environment.” Sunil says “Our Diversity and Inclusion Councils ensure that our diversity strategy is implemented in local markets with strategic partnerships, targeted recruitment campaigns, diversity communications, and other outreach to associates. U.S job force has one of the greatest working desires and will to advancement sincerity and ingenuity known in the industrial world. Prince Organization has set a goal to create over 3000 jobs in 50 states throughout the AMERICAS as we are rapidly expanding. “Our ASSOCIATES ARE THE HEARTS AND SOULS of our organization and we proudly invest in our associates and give back to the communities that we serve in.”
Sunil took a bank loan to purchase his first hotel in August 2007. It was a 59-room Holiday Inn Express in La Junta, Colorado, for about $4.2 million. Six months later, he purchased his second hotel in Pueblo, Colorado, for $6 million. Within one year, Tolani earned a $1 million profit with his two hotel purchases and acquired his third hotel, another Holiday Inn Express in Alamosa, Colorado. Sunil says his average has been to buy a hotel every four months.
Reputation Is Impacted More By What We Stand For Than What We Sell.
“In today’s economy “People’s willingness to buy, recommend, work for and invest in a company is driven over 60 percent by their perceptions of the company and less than 40 percent by their perceptions of their products.” Paying attention to our reputation has paid big dividends as our reputation is an emotional connection which is built over time. It’s tied to our history and past actions and a sure recipe for success when competing. To improve revenues companies must invest in stellar reputation as we did in ours.
“We live in a time where word-of-mouth is the number one driver of sales and competitive advantage,” says CEO Sunil Tolani “Investing in reputation pays off on the bottom line. Studies show that companies with high reputations are worth as much as 150% more than those with low reputations.
At Prince Organization, “We take our responsibility to our associates, customers, and the communities where we do business very seriously. Our view is that the dynamic nature of societal and environmental changes—some predictable, some not—require us to anticipate and respond meaningfully. This is something WE always strive to map, measure and influence. It’s imperative for companies like us to understand and navigate through these very changes.
We gladly acknowledge our guest’s feelings on surveys based on four emotional indicators: trust, esteem, admiration and good feeling. That's where we found that perceptions of the enterprise (workplace, governance, citizenship, financial performance and leadership) trumped product perceptions (products and services plus innovation) in driving behaviors.
Five years later, Sunil Tolani is on pace to witness a 35-fold increase in profits and an expansive hotel empire. He operates this under his company, Prince Organization that includes 15 hotels. The company is on track for a very strong growth as it now approaches a 468% growth in total rooms, a 587% growth in revenue dollars, and a 755% growth in company equity. As per Sunil, the company looks set to hit a whopping 1000% growth in next 2-3 years. According to Sunil, his aim is to have Prince Organization own at least “one outstanding hotel” in each state by 2015. He also plans to make an Initial Public Offering that year and grow his business’s revenues to over $300 million per year. In 2011, Sunil’s hotels generated revenues of $29 million. At present he oversees hotel operations in Colorado, Louisiana, Mississippi, Texas, Utah and Washington. He also has plans to develop a chain of boutique hotels. In addition, he plans to develop a chain of boutique hotels and expand his operations internationally.
While acknowledging Boutique hotels, Sunil says “Just as clothes from the 80s recently became popular again, the genre of the early 60s is everywhere thanks to MAD MEN, THE TV SERIES. The boutique segment is being discovered by our organization as we see it as something new and fresh. The new standards are higher experience, higher end, more intimate luxury and very personal. Given that the US is officially out of recession we are entering a period of prosperity for the boutique hotels where the average daily rates will be much higher and the levels of sophistication for our well-heeled guests. Hotels, Restaurants, Night clubs, Hip hot spots, ENTERTAINMENT is changing radically going forward. GUESTS come to feel good, to be something they are not or THEY ARE WHAT TO BE TRUE SELVES. Play to the galleries at sold out events. Give the crowds what they want, ENTERTAINMENT---WOW FACTOR--X FACTOR. PATRONS pay for premium bottle service, real estate by the DJ floor. DJs command a rock star presence, electronic music is the STAR. DJ’s are the Stars. DJ’s are going to get as big as or bigger than stars as CELINE DION, RIHANNA etc. OUR special brand of night life will work with LMFAO, ERICK MARILLO, COSMIC GATE,CHUCKIE, BENNY BENASSI and the likes.”
Sunil adds, “We’re doing something special. We are created that way.” He believes that magic in life, lies in creating excellence. “ENTERTAIN THE GUESTS and WIN THE GUESTS. With every passing month, the recession is further back in my rear view mirror as we have blown away industry forecasts and expectations of financial performances on all fronts, revenues are up, earnings are up much more than we had forecasted. Our game is all about PROFITABILITY, profitability or the long term, as we NEVER discounted our rates while our competitors discounted in desperation, severely impacting brand standards, guest experiences, and employee morals. Thus, running out of cash to invest, refresh the hotels.”
As per Sunil, there are six properties that are currently in the due diligence process in various stages and has many contracts for land parcels for hotel developments. By the end of 2012, Sunil should own over 20 properties. He says, “building a hospitality empire that will rival the great hoteliers of the past and present. Expanding during a down economy is an uphill battle, not for the faint of heart. That’s what keeps me going every day. The next 3 years are going to be the most interesting years of my life. Please ask me in 3 years. Everything I’ve done, everything I’ve learned (some of it the hard way); it was to get here and become a household name and take this organization and my beloved team members to mainstream." Sunny loves walking through lounges and bars in his hotels, as he imagines how the elements he has envisioned all come together.
“We are increasingly looking to acquire Hotels, clubs and venues rather than develop them from scratch. Clubs are the gateways, bringing in well-heeled young consumers, potential diners, and hotel guests, who spend liberally throughout our venues in various cities around the country. I want to bring them in at 21 and keep them spending until they retire, so we can institute a loyalty program that allow us to track repeat customers at any of our properties. When they come in to any of our clubs, bars, hotels, we can give them a free glass of champagne, a free appetizer, and/or a free room-suite upgrades. I want my guests to wine and dine with me.”
Sunil says, “People are our greatest assets, it’s something that we honestly believe and strive to live up to. Our organization hires the best, brightest, smartest people. We nurture them with continuous trainings, so they can build a life long satisfying career and grow personally, professionally, financially and educationally.”
“I marvel at the record growth our organization has experienced for the last 4 years and see good things ahead for us. It is interesting when we look at the supply/demand imbalance and what’s taking place. It’s never really taken place before in our time. The hospitality industry is soon going to get to a point where over 1.2 billion room nights (sold) a year is going to be the norm, right around 60% occupancies in the US. I believe it will continue to increase because travel for businesses has transitioned from discretionary spending to a financial investment. Leisure travel will also be at record high this summer. Season projects, AAA and Government travel impact will be quite higher this election year as the parties and their grass-root campaigners get out on the roads of Americas. Our organization is truly at a historic point, where we have a very consistent growth and negligible competition for at least the next three or four years. I believe this is an excellent time to be in business, as the gap in growth and competition will continue to push us forward.”
He further says “I am proud to be a CEO of an organization where all my SENIOR VPs, DIRECTORS, EXECUTIVE MANAGEMENT teams and even most of our hourly team members are formal degree holders. They are more PROFESSIONAL THAN I AM. I hire the best and the brightest. I pay them salaries with bonuses and make sure to treat them with respect and appreciation. Sunil says, “They GO TO WORK for me and strive to make me fortunes. YOU GET WHAT YOU PAY FOR.” One of his GM stated, “I have been employed in the hotel business for over 16 years. There are truly only a handful of people that reflect the spirit of hospitality that Sir Sunny does. He really has great care and respect for not only his guests but his employees. I have already learned a great deal from him and I hope our association continues well into the future! WE believe and know that our SIR will achieve the legendary position of the WORLDS largest best hotel founders like J.W. MARRIOTT, CONRAD HILTON, KEMMONS WILSON and the likes. One thing I have posted on my desktop is a quote by Sir Sunny, “WELCOME GM. Never forget you are today where your thoughts have brought you; you will be tomorrow where your thoughts take you. According to Sunil, “Our Team Members are not an expense to be cut or closely monitored. They are our asset to be invested in heavily.”
Our CEO firmly believes that taking care of our team members is always first and foremost. “First do right for them, our guests and the communities we operate in. This support is part of our overall effort to provide America's men and women in uniform with opportunities in our hotels service sector, and to ensure that military families around the country have the support they need. We currently employ 120 PLUS veterans across our hotels. This includes over 50 new hires this year alone with a goal to hire over 500 by 2015.” SUNIL TOLANI signs Employer Support for the Guard & Reserve (ESGR) Statement of Support.
Sunil says “as a Social Entrepreneur my business is a Benefit Corporation and not just plain dollars and cents. My aim is to create thousands of jobs, opportunities, invest and give back to the communities. The new legal charter institutionalizes the values, culture and high standards, which put in place by me now and forever. I do not answer to investors, shareholders, nor have partners where I have pressure to show quarterly bottom line profits by cutting the top lines, causing me to compromise my principles, ethics and values. Life has blessed me and as a CEO. I only have to answer to the higher authority, Almighty God by doing by continuing to do good karma.” Sunil is determined to be the TOP 100 Fortune/ Forbes America’s Best privately owned companies to work for as the welfare, well being of my employees is his number one priority.
Sunil says “Our mission is to provide Royal Hospitality by making a difference in the lives of the people we touch every day. My Organization’s focus on this mission is in pursuit of our goal of becoming the most preferred hotel in the current competitive set. Our service culture meets the 5/7 star AAAA/ Diamond/Mobil rated Hotels. We support our mission and goal by adhering to a set of core values that characterize our culture of honesty and where is welcome to our home.” He further says, “We believe our guests select our hotels because of outstanding reviews, 100% satisfaction pledge and most of all because of our caring and attentive associates who exceed their service expectations. We care about our associates who in return care about our guests. Our employees do not come to work for a paycheck; they are trained to be partners in success. They do an extraordinary job for their own sense of accomplishments, pride and satisfaction.”
Sunil says ‘my new venture includes L.A. Live – Dodger Stadium, where fantasy and reality intersect. There is no other city in the world which has breath taking retro romance and forward minded futurism. There is a blend of nostalgic ambience, art décor, Hollywood glamour, Lakers, Dodgers, Clippers, and a new NFL team. Uniquely designed Hotels, Day-Night club, lounges, celebrity, and award winning chef inspired restaurants and SPAs will bring a refreshing perspective to the timeless marriage of form and function, classic and chic, solid and soft, feminine and masculine. With real natural materials such as wood, steel, translucent concrete with glass fibers, we are confident it will be voted the best design of the year.
Sunil adds “Green roof system and cogeneration plant designed to reduce the hotel’s overall carbon footprint. The 12,000 sq. ft. green roof system will be located on the hotel's rooftop setback. In addition to carbon capture, the green roof helps conserve energy and reduces the so-called urban heat island effect. The roof plays host to locally grown plants harvested from California native farms. The foliage and roots of these plants naturally absorb airborne pollutants, which in turn prevents large quantities of carbon dioxide from being returned into the atmosphere. The cogeneration system will provide in excess of 50 percent of the hotel's electrical power and over 40 percent of its steam for heating and hot consummation with over 17 million kW hours of electricity per year, per LA DWP. Thousands of new jobs will be created and millions of dollars in bed tax, TOT taxes, sales tax collections, and resort fees, property taxes revenues will be directly payable to our loved city of LOS ANGELES. This will contribute to the total remodeling and refurbishing of the LA CONVENTION CENTER.”
Sunil and the Prince brand are working everyday in representing the Royal standard in hospitality around the world. Sunil has worked hard to be recognized as a pre-eminent developer, owner, and operator of quality hotels. Acumen is unrivaled, and the diversity of interests has set a new paradigm in the world of business. His commitment to excellence is legendary and work as a philanthropist is an integral part of his ethos.
Sunil was also the top vote getter for the orange county – Holiday Spirit Award 2011. The award is the annual recognition of Orange County business owners who are kind, generous and full of goodwill all year long. Owner’s focus is people, not money.
Sunil was also awarded Businessman of the year instituted by Indian Community of Southern California, at the hands of Congressman Ed Royce and another prestigious business award at the hands of Sheriff Lee Baca.
Sunil credits his father who always says, “Son, action is the antidote to despair. Yes you will face many defeats in your life, but never let yourself be defeated and never ever get discouraged as it is often the last key in the bunch that opens the lock to successes and I must have long range goals to keep from being frustrated by short range failures. Keep going, pick yourself up when you fall down and brush yourself off. Just blow off the unimportant and petty issues and people. "LET IT GO" instead of holding grudges.
My mother has thought me that I must have high standards of ethics and that there is no room for shortcuts to do the right thing, even if it’s hard or painful. My mother illustrated in words and deeds how people come first. Her teachings are my core values. They are an ethical, benevolent compass that steer our organization to great heights of success.
Signing off Sunil says, “Our hotels engage with community organizations and play an active role through volunteerism and donations to support those who are challenged with supporting themselves. I pledge to put my wealth into social causes, giving it away during my lifetime. "Wealth needs a greater purpose; my philanthropic foundation must measure achievements by what I build and what I leave behind.”