The CEO of Pinnacle Hotels USA has adopted a growth mindset to tackle business crises – and succeed.
Since Barry Lall spoke to European Business Review about his experiences as an entrepreneur in the hospitality arena, he’s now shared his insights into the importance of grit and resilience when running your own business. Of course, grit and resilience have been more important than ever over the last year. The global pandemic has given rise to uncountable challenges in all sectors – and hospitality has been one of the worst affected.
But what is grit?
Put simply, grit is the perseverance and passion you need to reach your goals. People who practice grit practice mental toughness. Barry explains that these people don’t only work when they feel motivated; they approach their work as a marathon, dedicating time to their goals every day. Paired with resilience – the ability to recover from failures or misfortunes – grit is essential to a growth mindset.
Facing Business Challenges With Grit and Resilience
As the CEO of hospitality company, Pinnacle Hotels USA, Barry has contended with major challenges over recent months. Despite the travel restrictions, social distancing, and numerous other difficulties associated with the Covid-19 pandemic, Barry has found opportunities where others would find obstacles.
Barry fostered this growth mindset long before COVID-19 wreaked havoc on the hospitality industry. After buying his first hospitality property in 1989, a 12 room motel, he went into the business full time during the 1980s savings and loan crisis. With two other friends, they formed a company to acquire distressed hotels in the southwest region of the US. After acquiring their first hotel, a 117 room Days Inn in Tucson, Arizona in March of 1993 they went on to acquire many other hotels in Texas, New Mexico, Kansas, and California. Barry then went on to form Pinnacle in 1998 through which he evolved the company to owning both select and full-service hotels.
Having grown his hotel business from 12 rooms to 1,790 rooms and 650 employees in over 30 years of being business, Barry recently took time to reflect on how grit and resilience have helped him overcome challenging times and become the business leader he is today. Hopefully, his story will help other entrepreneurs on the hospitality scene tackle their difficulties, too.
Capitalizing on Difficult Times
Barry explains that businesses of all sizes face difficult periods – and that these difficulties often stem from events we can’t control. He recommends that, where possible, entrepreneurs should embrace these difficult times by capitalizing on them. For example, Barry capitalizes on difficult times by making business investments when no one else can. And there’s one simple way to achieve this.
“During the recession, when everybody’s panicking, everybody’s shutting down, everyone’s scared – including the lenders – that’s when you should be buying. If you want to hit home runs versus singles and doubles, taking advantage of massive opportunities is the way to do it.”
Next, Barry explains that, although very difficult, he has always been able to secure financing for these acquisitions during challenging times.
Preparing for Crises With Grit and Resilience
Barry explains that the safest way to approach turbulent times is to prepare. He has navigated Pinnacle through various challenges by always preparing for the worst with a safety-net fund.
COVID-19 is one of many crises that businesses have faced over the years. For example, lots of businesses struggled – and even folded – during the Recession of 2008–09, too. Economic and personal crises are inevitable, which is why it’s vital that businesses have enough capital reserves to support them through these predicaments.
Barry was prepared for the Great Recession in 2008-2009 by having adequate reserves. These reserves were not only helpful for preserving the existing assets but were also helpful in making additional acquisitions.
“You can’t just rely on resilience and grit during difficult times,” Barry says. “You have to prepare with resilience and grit ahead of time. We’ve always been conservative from a financial standpoint and responsible for ensuring we have more than adequate cash reserves to live through any recession. Fortunately, even though we could never anticipate the pandemic, we were blessed to have been inadvertently prepared for it.”
Preparing for Crises in the Hospitality Sector
Preparation is especially vital for a business in the hospitality arena, which is subject to sudden recessions and downturns in the economy. Barry explains that there’s usually a downturn every eight to ten years. No one can predict how long these downturns will last or how severe they will be.
“Plus, our industry has the shortest lease period,” Barry adds. “Many office buildings have three- or five-year leases. Apartments have at least one-year leases. But hotels generally only have a day, a day and a half, or a two-day lease. As a result, recessions can have adverse effects on hotels. That’s why hotel investments are one of the highest-risk investments in the real estate class.”
Barry concludes that making acquisitions during tough periods is a huge test of grit and resilience. Especially as we never know how long downturns in the economy will last.
“I rely on my instinct. I persevere and I push through, and even when the odds are stacked against me. When I am determined I’m able to get the job done. If there’s a will, there’s a way.”
Practicing Grit and Resilience in Hotel Management
Though entrepreneurs in hospitality need grit and resilience to prepare for crises and consistently seek the best opportunities for their businesses, Barry notes that the real challenge often comes with the ongoing process of hotel management. This is because delivering great service and product every hour of the day, 7 days a week, 52 weeks a year requires long-term grit and resilience.
Ongoing hotel management can be especially challenging as hotels need capital improvements on a cyclical basis. Barry explains that these renovations can cost $5,000 to $25,000 per room. However, by ensuring that the hotel is in good condition it increases its chances to remain competitive and hence financial success.
Waiting for the Right Opportunities
Rather than focusing on long-term goals, Barry is more focused on upholding Pinnacle’s culture. It can be difficult to set goals for the long term as we can’t predict factors that may arise and affect these goals. Instead, Barry focuses on upholding grit and resilience as a patient investor. He waits for the right opportunities to arise so he can make the right business decisions at the right times.
“From an operational results standpoint, we do have monthly goals, quarterly goals, and annual goals. We do have budgets, and we expect the operations team to hit those goals,” Barry says. “Otherwise, my long-term goal is to remain true to our values and principles. I would like this company to be perpetual and go on irrespective of whether I’m here or not.”
Embracing Grit and Resilience
Most importantly, Barry emphasizes that anyone can practice grit and resilience. You don’t need to be academic or have an impressive educational career. It doesn’t matter which college you went to. It doesn’t matter whether you went to college at all.
Instead, the entrepreneurs who thrive are often the people who treat failure as a learning curve. These people tend to strengthen their mental toughness in the same way they would a muscle – by practicing their skills and working towards their idea of success every day.
About Barry Lall
Barry Lall is the CEO of Pinnacle Hotels USA. Having successfully grown his hotel company from scratch, Barry has developed a portfolio of fully renovated hotels in wonderful locations throughout California and Texas. Today, numerous guests check into these hotels, where they enjoy Pinnacle’s personalized services and home-from-home comforts.
Grit and resilience may have led Barry to his commendable business successes, but these strengths are also key to his personal life. Barry has taken up various hobbies to develop an array of skills over the years, including demanding golf, swimming, and surfing challenges. His dedication to new skills has helped him focus on personal growth during a difficult year – he won’t let himself sink or give up in the face of adversity.