Peter Bheda, Chairman & CEO, Frontera Hotel Group, interviewed by Lan Elliott

Peter’s career began emptying trash as a young immigrant houseman, teaching him never to look down on people. Leadership is a pattern of behavior, not a title: one part strategy, two part judgment, and three parts grace. He separates the risk to the business from the risk to his own ego - being wrong about an idea never means it was wrong to try - and believes listening and a willingness to learn matter more than any resume.

Transcript

Lan Elliott 0:02

Hello and welcome to It's Personal Stories. My name is Lynn Elliott on behalf of It's Personal Stories, the hospitality podcast dedicated to empowering personal success. And today I'm very pleased to have Peter Beta with us. He is the chairman and CEO of Frontera Hotel Group. Welcome, Peter.

Peter Bheda 0:22

Thank you. Thank you, Lynn. It's nice to be here. It's been a while since we have spoken, and what a pleasure it is to join you on this platform, that you share with so many iconic hoteliers around the globe. So thank you for inviting me.

Lan Elliott 0:36

Thank you. It's wonderful to have you be a part of our pod- Let me start with your journey to leadership because you've built this incredible company, Frontera Hotel Group. Could you share some of the inflection points in your career and if there was a particular factor that contributed to your success?

Peter Bheda 0:59

Sure. Excellent question. I'm so blessed to have had fifty years under my belt. I cannot forget the very first inflection point that to this day I believe is the cause of this successful journey that we're talking about today. And that inflection point was when I call it the business from ground up. I literally in nineteen seventy-one at Sheraton LaGuardia, I was the houseman. I was emptying trash, I was cleaning rooms, I was unclogging toilets. And I think that taught me more about leadership and the discipline that it required to be a leader. At that point, of course, I had no idea what I was going to become. I was seventeen, eighteen years old. But I feel that it has helped me because when you have cleaned the floors yourself as we say you never look down upon people who are doing it today. And it may be a very small thing but I to this day remember when, when-- how I felt when I was doing that job. When somebody yelled at me, somebody screamed at me, somebody said, "Hey, you didn't do a good job," or, "What are you doing? Don't you see this?" I just went on my business. Didn't do anything, didn't say anything, didn't have the courage to say anything back then. Of course, at the age of seventeen, eighteen and in this country for the first time, I was an immigrant. So that was my first inflection point. The, the second one was, I would say, is when I held senior leadership positions for companies like Marriott, Hilton, Highgate and, InterContinental Hotels Overseas, where I, of course, worked in Pakistan as a country director. And I think each of those leadership positions I had taught me different things. And I'm gonna keep this whole thing very simple because, sometimes we tend to lose focus on trying to create things. And I think each of those positions that I held taught me different things. As I called it, different muscles, right? So the first one was the brand discipline. Working with different brands, Hilton, Marriott, Hyatt, IHG, some independent each one of them taught me different things. They have what I consider to be brand discipline. Every brand has their own discipline, and when you realize that instead of competing or instead comparing each brand, you take the best that each brand offers and then you work with it. You take advantage of what they offer. So that, that was a good thing. The other thing it taught me was the international complexity. When I worked overseas in Pakistan, understanding the culture, understanding the the, the local flavor, if you would and see how people react. And I think we talked about it at one point that, when I was working in Pakistan, the, the hospitality comes naturally to people in that culture, right? Part of our DNA. What I spent more time and expense and money was on the technical side of it because those people did not have the opportunity to get the computer training. But when you flip that in to USA, every brand, whether it's Marriott, Hilton, Hyatt, IHG or independent or, Four Seasons, they all have tapes and libraries of things that teach people how to be hospitable. And the third thing it taught me, and I consider that to also be an inflection point for me, was the, the turnaround pressure, right? When you're given an opportunity to take on a 700 room Omni Hotel in downtown Baltimore, and they say, "Oh my God, nobody has been able to fix this property." And Patriot American Hospitality, if you remember, Mr. Nussbaum, they came, he said, "Peter, we need your help. I understand you can do it." I said I'll try." And we did. So that turnaround pressure teaches you many. The biggest and the most important inflection point, in my opinion came when I founded Frontera Hotel Group in 2012 and the reason why I say it is the most important step and inflection point is because I was betting on my own judgment all of a sudden after decades of executing someone else's strategy. So when you are a CEO of another company or you're a senior VP of a group that led by Goldman Sachs to billions of dollars and buying these iconic properties in Las Vegas and San Francisco, you're enjoying all this experience but you're executing on someone else's strategy. So betting on your own judgment in 2004 when I founded Frontera was a huge, relief and an understanding that, yes, I can do this. I can do it on my own. I can have my own brand or my own company and my own culture and bring people on board and with everything that I have learned. So those were some of the inflection points I think that I feel helped me in my journey.

Lan Elliott 6:17

There are so many beautiful things in what you just mentioned I wanted to call out. One of them was starting at the ground up working as a houseman and understanding what it is to work in many different departments of the hotel. And the people yelling at you at times. We've all had bosses that were not ideal, but we could still learn things from that experience- Absolutely if it's nothing beyond, "I never wanna be like that," but there's always something to be learned.

Peter Bheda 6:46

Absolutely.

Lan Elliott 6:48

I also am curious, between teaching someone hospitality and teaching them the technical skills, which is easier to teach?

Peter Bheda 6:58

The technical skills are easier, and I'll tell you why. You can always teach someone how to run a machine or how to work on a computer, but I think hospitality has to be in your soul, in your gut. You have to feel it. You can't fake hospitality. You can but people will know. Somebody like you or somebody like me would go, is checking at a hotel if somebody is trying to be hospitable but they're not authentic. You can see that. You can feel that. So the easiest thing to do is to teach them how to be a leader, how to be authentic, how to... and without actually making them feel uncomfortable or pressured about this, because it's such a, it's such a basic human skill tendency that the way you do it. And I will answer it this way, Lynn. It all starts with the leader, right? Yes. But it's never about a leader it's about the- It's never about a leader. Because leadership, in my opinion, and I hope you agree, and you've interviewed so many great leaders over the past few years. But leadership is one part strategy, two part judgment, and three parts grace That's what I say. Now, while it's so easy to intellectualize this concept, it's elusive to actualize it because it requires both, Glenn. It requires sense and sensibility. And I'll give you an example, right? When I say sense, what does that mean? That means that the ability to think an ability to reason logically, those are senses. What is sensibility? Sensibility is the understanding of the human emotion. The side of leadership that understands the culture, that understand the timing of certain things. Those things are very important. So when I say that it all starts with the leader, I don't mean the person itself, but it's about how you behave. As we talked about earlier before, that to me, leadership is a pattern of behavior. That's all it is. We have all these leadership coaches around the world making hundreds of thousands of dollars giving speeches and all of that, and writing books and those are great people. But I think when you boil it down or when you try to simplify it, it's simply a pattern of behavior. How we behave in a given situation, in a given circumstance. I love that. That's leadership.

Lan Elliott 9:46

Mentioned this earlier as one of the biggest pivots was starting Frontera. And you built this incredible company. Your son he's the chief investment officer. And It's a huge risk to go home and tell your family, "You know what? I'm quitting my job. We're gonna start a business." How do you think about taking risks? How do you mentally decide this is what I'm going to do?

Peter Bheda 10:14

You're right, it was a huge risk, but it was a calculated risk, right? Based on my own competence, my own comfort level, my own confidence, I should say. Founding FAG, Frontera Hotel Group in 2012, after decades inside established companies, walking away from the safety net of a corporate ladder. I could have made half a million, million dollars if I stayed there. I bet I could have, right? But that's not what it was all about. And I think it requires mental preparation when you do that, in order to do that to walk away from that sort of a safety of the corporate ladder. I often use this in my teaching, at Harvard and Columbia and HEC. I call it three Cs of life, you Have to make a choice You must take chances If you want anything in your life to change. So here we go. Three Cs, right? You have to make a choice. You don't have to, but if you really want something to happen in your life or anything to change, you have to take chances, then you have to make a choice. The order in which you do, whether you take a chance or you make a choice and then take a chance, doesn't matter. But the, the element that, that's, that I'm trying to focus is that changes will only occur if you take a chance on something and you make a choice. And to make a choice to form my own company, when my colleague said, "You made everyone millions of dollars. Why don't you do something for yourself? You're so good at it." And so I thought for a while. I said no for the same reason. It was comfortable. I had a paycheck. I had a family. I had a home. I had bills to pay. Why would I screw that up or mess it up, right? So I think that's the first thing. So mental preparation, basically separating the risk to the business was important to me from the risk to my ego It wasn't about titles, it wasn't about large mega hotels that I was operating such as Stratosphere, 2,500 rooms, Aquarius, 1,900 rooms, Westin San Francisco at 747 keys, and then all the rest of the Manhattan properties that I helped open, for my employer. I was a big shot. I felt great. I, and I had the ability and the power, but sometimes that is, that's just counterproductive to your own ego because you need to bring yourself down to Earth at some point. And there were occasions in my earlier days where I felt like, I had everything I need, but it wasn't the title or the power that I realized that made you who you are. It is you as a person, your character, your kindness, your humility, your authenticity, your bringing someone along with you when you rise. Those things make you... when I teach at school whether it's in Boston, at university or others, I say to my students, "You will never remember the formula of something that you learned years ago, but I bet you will remember a teacher or a professor because of how he taught you, because you remembered his style I used my life experiences to teach. That was something so different, fundamentally different than using textbooks, using case studies, using all the other, giving exams and quizzes. I said this too, I said, "Don't worry about this. Let me just share with you my journey, my life journey." So for example, when I was teaching franchise management, I didn't ask them to read a book, even though there are great books, as in our industry, right? But I actually pulled up on the screen the franchise agreement that I personally negotiated with Marriott for one of the hotels, with my signature on it, and then went through all the pitfalls that, that they have to be aware of. At what point do you bring in an attorney? At what point do you bring in a business partner? At what point do you argue certain points? What is AOP? How does it work? What is the reason for it? So when they learned that intricacy of real-life experience they were glued and I think the word got out and then I was asked to do the same thing at other schools, and I went and did the same thing. So I think the, the biggest thing would be separating the risk to the business from the risk to your ego. I can be wrong about an idea. Nothing wrong with that. I can be wrong about an idea without it meaning that I was wrong to try That make sense? Yes, absolutely. Yeah. I can't be right all the... I don't wanna be right all the time. You don't need to know the answer for everything. And I think risk-taking, I always ask, what is the calculated downside to what I'm thinking of?" That's a good way to think about it. So can I survive? If the answer is yes, let's give it a shot this is how life works, right? Listen I'm you know how old I am. I'm old but I've, I think if you just reflect on the experience, some small experience like I shared with you, there is so much that we can learn from it, and it doesn't require a college degree to learn it. It's just about listening, active listening, and willing to learn. That is the key. If you have somebody here that, that wants to work with you for my company and say I love your company. I wanna work," I'm not gonna look at his resume or her resume. I want to see, are you willing to learn? You may think you're a rock star, but I can tell you, I'm gonna put you in your place because you will never be able to work for my company unless you behave as if you are still in that learning mode, just like I am. I'm a teacher. I'm a professor. I'm still learning.

Lan Elliott 16:45

That's fantastic.

Peter Bheda 16:46

It's all.

Lan Elliott 16:47

Peter, I wanted to dig into the teaching because something that we have in common is a love of teaching students, sharing what we've learned over the course of our careers with the next generation. You also volunteer with NGOs overseas. Can you share some of the advantages or lessons you've learned through giving back?

Peter Bheda 17:10

Sure. And first of all, thank you for teaching, because it's such a noble profession. A lot of us, don't get the opportunity. We're lucky that we have been blessed with the opportunity where people are calling us and saying, "Would you please come in as a guest lecturer?" So thank you for sharing your knowledge. And I think what I feel personally, and I'm sure you feel the same way, teaching keeps us current Right? Each of these classes that I teach, be it Harvard or Columbia, whether it's entrepreneurship, leadership, mergers and acquisition, negotiation, conflict resolution, I've taught them all, aside from the hotel subjects. But since we're focused on hospitality hotel operations, franchise management food and beverage revenue management, all of those things that we are familiar with. And you know why teaching keeps us current, Glenn, is because students' questions. When students ask us questions, they expose the gap in our own thinking Right? Yeah. Because students' questions expose, again, I'll say it again, it's very important that the s- the students' question expose the gap in our own thinking. Because we think that we know the answers, and in majority of the case we do, right? Because we've been around, we've done this. Yet nobody gave us a position or title or authority, we've earned it. We've earned it from ground up. But I think their question, because one of the things, one of the concepts that I came up with recently, and I haven't really thought it out, but whether I wanna do something with it, it's called the CEO two concept. And what is CEO two concept? It's a combination, it's a combined position of chief executive officer and chief people officer. You know how everybody has chief people officer, senior HR director, senior vice president of HR. In my opinion, the head of the organization should be the chief people officer. Because if you don't tell this person, he or she, that they're responsible for their people, they're gonna count on the other people to do the human part of it, and they'll focus on the numbers and EBITDA. And that's a very dangerous mindset. So I think the CEO of the company should himself or herself consider to be the number one HR person in the company. Love that. And obviously- maybe the HR people will hate me now when they listen to this, but or the Society of HR professionals come after me, SHR, whatever it is But I don't care. I,

Lan Elliott 19:58

I

Peter Bheda 19:58

think- So that's one

Lan Elliott 19:59

you speak to the importance of people, especially in our industry. People- Absolutely are the heart of it.

Peter Bheda 20:06

Yes, because you can't fake relevance.

Lan Elliott 20:10

That's

Peter Bheda 20:10

it. You can't fake relevance in front of bunch of 23-year-olds who are asking the question like, "Why hospitality still does things the old way?" And you have to have an answer. And they're right. My own son says that. He's 30 years old, and he said, "Dad, you're old luxury," like Ritz Carlton and all that. He said, "No, we don't do things that way anymore." I said, "Son, certain things don't change." hospitality part, the face-to-face interaction, the smiles, the eye contact, the body language, you can't... AI is not gonna give you that. Your iPhone is not gonna give you that. You, sure, you can open a door at hotel, you can enter a hotel room with your iPhone, fine, or you can push a button and everything happens in the room, but there is something to be said about the human touch, the human connection. So I think that is one. And I think advantage of giving, honestly, Lynn, It's for yourself really. You feel good about who you are as a person. Forget the awards and forget the... All those are important in, in our industry of course. For example, I'm not gonna hide the fact that my company, Frontera Hotel Group, just a couple of months ago received the Connie Award from Hilton as being the top Hilton Hampton Inn in the country, So that's an honor. It's good, and it's a boost to the ego of the people that work there and have worked so hard to achieve this. That's not a small- Now, congratulations to have 2,000 hotels and then have a, the little town in suburb of Dallas that has won the number one hotel in the entire country and Canada, North America. So I'm very proud of it, and I think, again I will not take the credit for it. It is the, it's the people that are on the ground. It's our corporate staff, it's our housekeeping department that made sure that they stayed on top 10, top 5%, and finally got to the number one position. Every quarter they improved, and it was through interaction, through giving, through taking advice, through listening, through Some sort of gratitude that we have to show these people. And I think more often than not, we forget to say thank you to... Because we think their positions are not important. We may say thank you to our general manager and to our vice presidents and to our corporate staff, but how often does a CEO of a company walk in the kitchen and I'm sure there are a few that do that, and talk to the utility person or as back then we call dishwasher, we don't call them that. It's like we used to call them maid, now we call them housekeepers, right? Or whatever. So how often do you go there and say, "Hola," just to, just for them to smile and say thank you for it. That will elevate you in the eyes of your people. Not giving them $200 bonus because they won the award. Yeah, that may help but that's really what they're looking for is a purpose. Why are they there? Give them a purpose to work for you, and they will do anything. But the, one of the examples, and I know I'm going on and on but during COVID when all the hotels were shut down, we all had... everything was shut down, airlines, hotels. My hotels, I had 15 of them, all shut down. We had to shut them down. So after a couple of weeks when everybody was listening to, to, the CNN and ABC, and everybody was saying how many people died, we had one million dead in this country and half a million here and hospitals are full and we didn't have vaccine or anything back then. We were just counting, how many people died. Everything was shut down. So I had an idea, and I kept my general manager. I, I, of course, let everybody go because nobody was traveling, but I kept one person in the hotel, and that was the general manager. Here's your job. One is, of course, you protect the asset and make sure nothing happens. You can live there, and luckily I had a couple that were able to... They didn't have a family, so they had a dog, and they, and then they stayed in the hotel. They, and they were taking care. But I said, "Here's your job. You go back and call these people that have stayed in your hotel for the last year or so." We have databases. And I said, "I want you to call them- But not to see when are they coming back or can you help them make a reservation for next year when COVID is gone? No. I want you to call them and say, "Mr. Beta, Mr. Smith, Miss Elliot, I'm calling, this is Peter Beta from the Hilton Hampton Inn in Farmers Branch or Tru in Hil- in Garland. I'm just calling to make sure if you're okay. Is your family okay? Is everything okay?" That's it. Nothing else. Don't talk about business, just ask them how they're doing. And I told my GM, I said, "I guarantee you that if and when people start traveling-" Your hotel will be picked over anybody else in your comp set, I guarantee you. Because they remember someone called them and wanting to know how their family is As, as simple as that. And it did happen. As soon as travel started we had people that stayed at our hotel that said, is such and such still here? 'Cause I wanna thank him." Same thing when you, when I was teaching and when a couple of students could not come in because they had, or they had to be on a Zoom call and they had a sick child because of, and I gave them extra two days or three days or allowed them to make up for it. My colleagues were saying, "What are you doing? You can't do that. These people, you're making us look bad because we, they have to learn, they have to submit this assignment." I said, "Do you know what the world is going through today? You can't." So I think that is the difference. That was a differentiating factor.

Lan Elliott 26:22

I love that.

Peter Bheda 26:22

question.

Lan Elliott 26:23

end of our discussion, I've got two quick questions for you. This one is my favorite question to ask because it involves reflection of your own journey, but I'm curious, what advice would you give to 22-year-old Peter?

Peter Bheda 26:43

Advice to myself, huh? Nobody asked me that in the last 20 years. I thought 30 years ago I would've been a better person, but no, I'm glad. It's never too late. The control that you think you need to hold on to Is actually slowing you down Oh, such a good one. I love that. Yeah. It's actually slowing your growth. So when you think that you wanna hurry up, it's actually slowing your growth. That's the first thing Second thing is And I wish I, I knew this, is to start sharing what you know sooner 'cause you'll be a teacher long before you think you're ready. If you wait too long, you may not get an opportunity to teach or share something you've learned. So why not? It's just like a, a colleague of mine told me. He said, I just turned 65 years old, and all of a sudden I realized that there are so many people that I love in- professionally and personally and I really haven't had a chance to say that. So I took three months off and I traveled the world just to go and see them and say, 'I just want you to know I appreciate you and I love you.'" S- because you don't know when you'll have the opportunity, yeah. As they say, two things are guaranteed, taxes and death. Absolutely. So we don't know. So why not at least share what you know and what you've learned and just help people? And the other thing I would say is be the person who checks the data himself or herself, right? Manage the numbers that are verified by you. So you can't take somebody's word for it and make a decision and act on it. It is your responsibility. This is when I was... I would say that to myself, advice to younger self. Check the data, verify it before you act. And here's an important one. Take the calculated risks before you feel you're fully ready. You'll never be ready. There'll always be something. Take a chance. Remember the three Cs of life we talked about? Take a chance. Make a choice. And then change will happen. Amazing. Now is the final. I see it on the screen. Yeah. Final- It says final advice

Lan Elliott 29:14

advice leader. You've given us so much incredible advice, and I feel like it's a mini class from one of the classes

Peter Bheda 29:21

that you teach. But, yeah, this is my favorite part also because I think it, it will resonate. And again you're not new to this. You've been around, you've done this before many times, and you've met people and interviewed some, some really great hoteliers, iconic leaders, global leaders. I saw the list. So again, thank you for allowing me to share this platform with all those individuals. The final advice is, here we go Make yourself valuable, but never make yourself indispensable. Number one. There, there-- I'll quickly go over four things that I've picked for, because, hey, that's the number one. Make yourself valuable, but never make yourself indispensable. Your career will advance when people trust both your competence and your character Don't think titles and training and degrees will help you. It may, but Third, do not chase titles so aggressively that you forget to become the person capable of carrying the responsibilities that come with that title How often does that happen, right? I'm the president, I'm the senior vice president, I'm the executive vice president. But in that process, you forget the responsibilities that come with it. And finally, this is probably, I know you'll love this because you believe in it. In the end, success is not only how high you rise, it is how many people rise because you were there

Lan Elliott 31:17

That's beautiful. Yes, I am a big believer in that,

Peter Bheda 31:21

thank you. I know you... I knew you would love that. So I think, again, at the end it's, to just put it all together, we talk about leadership. I talk about weadership with a W-E. It's weadership, not meadership, M-E. Right? And I think that there is something to be said about that, because if it's I, me, and my, it doesn't work in this environment. If it's we, ours, and us, we'll go a long way And I think that's basically my opinion. So again, I'm so honored to see you again, and to talk with you and share this journey with you. I hope that it will resonate with the few people that I've had the pleasure of working with in the industry over the past 50-plus years. And if there's anything that I can do to help advance and bring in or train or develop young leaders I'm always there, and be available at your disposal, at your discretion. So thank you so much.

Lan Elliott 32:30

Thank you, Peter. Thank you so much for everything you've done for our industry-

Peter Bheda 32:35

Thank

Lan Elliott 32:35

you for all the young people that you've inspired, and for sharing your wisdom today with us. So thank you very much.

Peter Bheda 32:42

My pleasure. My pleasure. Thank you.

Lan Elliott 32:45

And for our audience, if you would like to see more wonderful in- interviews with industry leaders, I hope you'll go to our website. It's personalstories.com