He knows hospitality, top to bottom

jay-shah-600
Jay H. Shah, CEO of Hersha Hospitality Trust, grew up in a motel his family owned outside Lancaster and now oversees an empire that includes the Rittenhouse, where he relaxed in the lobby. YONG KIM / Staff Photographer

Growing up, Jay Shah, chief executive of Hersha Hospitality Trust, and his brother Neil, now chief operating officer, shared a bedroom in the manager's quarters of the Red Rose, a motel their family owned near Lancaster.

"My brother and I would load the vending machines and skim the pool. When room attendants wouldn't be available, we would clean rooms," said Jay Shah, 47.

"You really do learn that way - the real essence of the business," Shah said.

Now that he heads a $338.4 million company that owns 51 hotels, including the upscale Rittenhouse in Philadelphia, Shah no longer has to step in to polish the bathroom mirror.

These days, his cleaning is more of the financial variety.

Since 2012, Hersha has cleaned out $431 million worth of 39 slow-growth hotels and acquired 12 hotels worth $627 million in a bid to become more upscale and urban.

Question: Weren't you and your brother leaning that way when you joined your family business in the 1990s?

Answer: Globalization, urbanization, and digitalization - you think about those three megatrends. I don't know that we had a sense of how significant they were going to be, but it was our preference as well as making business sense.

Q: How do they relate?

A: In 2009, 2010, we had 55 million international visitors in the U.S. That is expected to go to over 80 million by [2018]. We are able to leverage the growth because all of the markets that we are in today - Boston, New York, Miami, Los Angeles - are the major global gateway markets in the United States.

Q: Most of Hersha's hotels are under well-known brands - Marriott, Hilton, Hampton, Hyatt - but you also buy chic independent hotels, such as the NU Hotel in Brooklyn and the Duane Street in Tribeca. Why?

A: The entire industry has changed. Now you aren't calling 1-800-Marriott [to reserve a room]. An independent hotel in a high-demand market has access to infinite distribution through the Internet. That's digitalization. You don't need a Marriott sign to know what the room is going to be like because you can go to TripAdvisor and read reviews.

Q: Do brands still have value?

A: If you go to China or India, the Hyatts there are splendid. What I think the brands are finding is that their overseas assets are serving as advertising for people to use those brands when they come to the U.S.

Q: Do you plan to add more hotels in Philadelphia?

A: I don't think so. We just don't see as strong a growth in Philadelphia as we do in other markets.

Q: Your family came from India and later bought a motel. Why do so many people from India go into that business?

A: The generation of Indians that came in the 1960s and early 1970s were either professionals or were very entrepreneurial, and in some cases they were both. It's not that every Indian knows one another, but obviously the community is tight-knit. Once a community member finds some relative success in a business, then others take a closer look.

Q: You said your mother wasn't eager for you and your brother to be in business together. Why?

A: She wasn't for it at all. Sometimes just being brothers alone is a lot. To be brothers and partners is that much more significant. She didn't want to take that risk with her boys.

Q: How do you get along?

A: We're very close. Even when we were younger we would talk late into the night. Now we have families and work, so it gives us a lot of fuel for late evenings.

 


JAY H. SHAH

Title: Chief executive.

Family: Wife, Susie; twins, Aryana, Avikar, 16.

Home: Wynnewood.

Diplomas: Cornell University, hospitality; Temple University, law.

Partner: His younger brother Neil, president, chief operating officer.

Growing up: Lived at the Red Rose motel near Lancaster.

Quotable: "Living at a motel is kind of like being on a family farm. Everybody pitches in."


COMPANY

Name: Hersha Hospitality Trust.

Office: Center City.

Business: Owns 51 hotels, 8,259 rooms.

 Nearby: Rittenhouse, Hampton Inn Convention Center.

Dollars: $32.8 million profit on $338.4 million in revenue in 2013.

Ownership: Publicly traded real estate trust.

History: Parents Hasu and Hersha Shah bought their first property, the Starlite Motel near Harrisburg, in 1978.

Related business: Hersha Hospitality Management manages 45 Hersha Trust hotels and 65 others, including seven in the region.

Employment: 4,100 nationwide, 531 here.


MORE ONLINE

Wonder why hotels don't use fitted sheets? Ask Jay Shah. www.philly.com/jobbing


Interview questions and answers have been edited for space.

jvonbergen@phillynews.com

215-854-2769 @JaneVonBergen