If diversification is the cornerstone of sound investment, then Sukhi Rai, president of RBI Group, has built an empire upon a proverbial Rock of Gibraltar. But unlike that European monolith, Rai’s realm continues to expand beyond its own borders.
“I have three sister companies under which I run my business,” explained Rai. “RBI Construction is one of Western Canada’s biggest hotel development companies. PHI Hotel Group is my management company. It operates the hotels I build.”
The third is a forming company, RBI Forming, which operates on a steady stream of concrete construction projects in B.C., with an emphasis on the Lower Mainland.
It’s a business model Rai has built out of necessity. RBI Construction has been in steady operation since 1989, but he said the volatility of the construction market creates challenges that can prove difficult to manage. The housing industry slump of 2008 convinced him that broadening his operations would help mitigate risk.
“You always have to have a secondary cash flow, and if you don’t, if there’s a downturn in the market, you won’t be able to pay your bills. Development only pays once the hotel is open.” Rai added that the ability to pool resources from all three divisions is key.
His formula has been working well. RBI Construction builds two to three hotels each year in Alberta and B.C. and has over $100 million in construction projects underway in Alberta alone.
Rai’s PHI Hotel Group, which has been running since 2002, maintains the economic momentum his construction company creates. Rai described it as a full-service enterprise, encompassing management operations, fiscal and accountant services, new hotel development, hotel sales and marketing, advertising, feasibility studies, asset management and consulting.
“We’re bringing three components under one roof, from architects to interior designers,” said Rai. “We do all of it.”
He has plans to do more. “I want to own about 40 hotels in Western Canada; that’s the aim that I have for the next 10 years.”