Leadership, Schwartz Style
Fred Schwartz isn't exactly charismatic. Engaging, yes. Friendly, for sure. And unusually skilled at negotiations and building consensus, among the reasons he's headed the Asian-American Hotel Owners Association for more than 10 years. A former hotel executive at ease with large institutions, Schwartz is spokesman and advocate for AAHOA, an 8,000-member lobby representing 22,000 hotels worth more than $60 billion. It's the biggest hotel organization in the country, if not the world. As such, it's also the key voice of the franchisor — and the midmarket.
In addition, AAHOA is run by a 31-member board to which Schwartz answers. Word is that isn't easy; until Schwartz came on board as executive director in late 1996, the top AAHOA post “was a revolving door,” he says. Now, it's stable, largely thanks to his stewardship. “If you have good governance, you want to answer to the entire board,” Schwartz says during a recent interview in Atlanta, where he lives and AAHOA is based. “That's the ideal, and I think AAHOA governance is strong. We continually enhance it.”
Four years ago, Schwartz was promoted to president of AAHOA. Clearly, people there like him. Says Mike Patel, past AAHOA chairman and founding member: “He was always ready to learn and change. We really needed some guy who was inclusive, not exclusive.”
“I looked like I just got Bar Mitzvahed when I came into AAHOA,” Schwartz recalls. “I was with the Olympic committee for three years, where I managed the hotel program.” Working for Scott Anderson, the head of the 1996 Atlanta Olympics who later became a top Cendant executive and is now involved in destination resorts, Schwartz expanded the Atlanta lodging universe for those prestigious games.
“Fred was appointed to handle housing for the Olympics and make sure people got hotel rooms and were not price-gouged,” says Patel. While on loan to the Olympics from Holiday Inn (he was assistant executive manager at the Holiday Inn Ravinia), Schwartz met many Asian-American hoteliers who own properties in the area. Patel, who with former AAHOA executives J.K. Patel and J.P. Rama hired Schwartz, says Schwartz was always professional.
“Fred's ability to deal with everyone showed,” says Patel. “When it came to AAHOA, the main thing we had to do was deal with who to get as executive director. The key thing was that at that time, AAHOA wasn't that big, and we'd gone over budget for the AAHOA convention in Nashville in 1995.”
Schwartz, AAHOA board member Roger Leva and allied member Richard Reyer developed a strategy to lift AAHOA out of its financial hole and expand its trade show, Patel says. Schwartz also mollified board members otherwise. “Fred's got a lot of gray hairs, and all the membership appreciates him, especially when we had a chairman who was acting more like a dictator,” Patel says.
In 2005, then-chairman Hitesh Bajkta attemped to revise AAHOA bylaws to allow two-year terms for chairmen, doubling the term length. Membership balked, threatening a lawsuit. The crisis passed — largely due to Schwartz, Patel suggests.
“Fred saw the issue well ahead,” Patel says. “That's when Fred demonstrated true professionalism; he acted more like a Kissinger, not an Albright, to deal with this issue. It made AAHOA stronger after this crisis. And Fred stronger.”
PRACTICE MAKES PERFECT
Schwartz suggests that that strength has been building since he joined AAHOA. He seems to think AAHOA hired him because, among other things, he's a strong businessman.
“With the Olympics, I doubled the amount of hotels in the host network from 200 to 400, so they saw I had an ability for business development and maybe could work in a fast-paced, highly charged environment,” he says. “They certainly saw I had 17 years of hotel operations experience and three years with the Olympic committee, so I think they saw maybe a couple of skill sets, like strong organizational skills and the ability to interface with many different types of people.”
One man he met early in his career was Mike Leven, the former head of Holiday Inn and U.S. Franchise Systems. Leven left the hospitality industry in 2006 to become vice chairman of the Marcus Foundation, an Atlanta philanthropy. He speaks warmly of Schwartz.
“I met Fred Schwartz probably in 1990 or ‘91,” Leven says. “Fred was a lent executive to the Olympics and met a number of the Asian guys. AAHOA had a lot of management problems in the leadership and he took the job. He called me for a recommendation and I suggested how difficult it was going to be, like being president of India.
“The democratic system is ingrained in the personality of these individuals,” Leven says of AAHOA members, “and even though it is a positive form of government, it's very difficult to get everybody on the same page.”
Early in Schwartz's tenure, Leven says, Schwartz called him to complain. “I told him to keep hanging in there, that it would work out and he was doing a very good job,” Leven says. “I think he helped the organization get national recognition; he worked hard in the industry, he became a good spokesperson for them, and he really began to understand the Indian culture.”
Proof of that came in a recent trip to Washington, DC during which Schwartz met with Secretary of State Condoleezza Rice to express support for a U.S.-India pact calling for the peaceful use of nuclear fuel. The pact, passed by the House and Senate, was signed into law by President Bush.
To further AAHOA aims, the organization recently bought a new office building — at 6,500 square feet, it's more than twice the size of its old headquarters — in suburban Atlanta and has an office in Washington, staffed by liaison Anurag Varma. Varma was instrumental in shepherding the U.S.-India deal and is helping AAHOA mount legislative summits in Washington, Schwartz says.
“Who better to educate our elected officials on small business issues than people who own the businesses, with their livelihoods at stake?” he says. “Our members are all business owners, so whether it's a Small Business Administration issue or an association health plan issue or a drive-by lawsuit or something else that's burdensome on business, they're all great spokespeople.”
With great clout, too.
“I think our next act is political influence,” Schwartz says, “which means our members getting involved on many different levels, from franchise advisory councils to their communities. Already, some of our members have run for Congress.”
What's his strategy? “I try to look at the desired outcome that takes AAHOA further and how to work through different personalities and opinions,” he says. “You want to make the right decision. Sometimes, you may get there in a circuitous fashion, but as long as you get there, hopefully in a timely way, you're all right.
“We're getting to the point where our issues aren't just AAHOA member issues,” he says. “They're hotel issues.”
What happens when AAHOA's face isn't exclusively Asian-American? I think that's an exciting turn,” says Schwartz. “That means we are advocating on issues that are broad-based, that lift not only our members but the entire hospitality industry.”
For more information and related articles, go to www.LHonline.com
THE BIG IDEAS
Negotiate, negotiate, negotiate. Try to see all sides of an issue. Be forthright but also persistent.
Further industry goals. By focusing on issues that matter to its members, AAHOA President Fred Schwartz is raising standards for the whole hotel industry.
Become involved. Engaging with your community helps raise the profile not only of AAHOA but of the entire hospitality industry.
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