Posted on 12/25/2005 11:42:40 PM PST by CarrotAndStick
Dallas, April 29: Today's great American hotel owner is more likely to be named Patel and have roots that extend to the Indian state of Gujarat, than to be named Trump and lay claim to premier properties in the New York area.
Immigrants from India, almost all with ties to Gujarat, have become a dominant force in the US hotel industry.
They own about half of the US economy lodging facilities and almost 37 per cent of all hotel properties here, according to the Asian American Hotel Owners Association (AAHOA), based in Atlanta.
This means that if a traveller stops at a Days Inn along Interstate 95 on the way to Washington, a Best Western in rural Montana, or a Holiday Inn Express near Dallas, there is about a 50 per cent chance the hotel is owned by an individual or the family of an immigrant from India.
"The first group found opportunities in the lodgings industry, more by accident than by design," said Hitesh Bhakta, chairman of the AAHOA at the group's convention held in late April at a suburban Dallas hotel.
Indians from Gujarat started to buy into lower-end US hotels in the 1960s and 1970s, when US immigration laws granted residency for new arrivals who invested about $10,000 to run a business. The ethnic group now owns about 20,000 hotels -- about 1 million rooms -- in 50 states.
The first hotels purchased were in run-down areas and typically at the bottom end of the industry, but they did provide the new immigrants with a place to live on the premises. All that was required was for a family to be on call 24 hours a day and be ready to work to keep the hotel operating smoothly.
INVESTING IN VACANCIES
As with many ethnic groups that find a niche in the marketplace, word spread about the opportunities in US hotels.
Most of the immigrants working in the lodgings industry are named Patel, a common surname in Gujarat, said to mean "village chief."
The immigrants also proved themselves to be an extremely low credit risk, making it possible for thousands to invest $10,000 or $20,000 or so as a down payment in a hotel property worth about $100,000 to $120,000.
"The network gave them a business plan," said Bhakta.
"They didn't need consultants. All a potential investor had to do was call up his uncle and ask, 'How much should I pay and is this a good market?'," he said.
In the 1970s, the number of Indians in US lodging expanded greatly. The gasoline crisis in the mid 1970s led to a drop in domestic travel, which increased the investment opportunities in roadside hotels. Indian investors could afford to acquire more properties because they were cheaper.
Immigration laws have changed over the years, making it much more difficult and expensive for new arrivals to gain US residency status by investing in a business, but Indian-Americans had already established a strong presence in the market.
BUYING THE RITZ
The industry group AAHOA was formed in 1989 partly in response to some hotel owners trying to take business away from hotels owned by Indian immigrants by placing an "American owned" sign outside their establishments.
Now, because of the strong presence of Indian immigrants in the industry and tougher rules from hotel franchise operators, the practice of playing on ethnic differences has largely disappeared.
The children of the first generation of hotel owners have taken the path followed by many other second-generation immigrants. Some have shied away from the industry because of the demanding work, while others have gained entree to running more upscale lodging facilities by enrolling in renowned hotel schools at Cornell or New York University or earning advanced degrees in business administration.
"We are turning out a lot of second-generation hotel owners," said Chekitan Dev, a professor of marketing at Cornell's School of Hotel Administration. "They are using their education to take their business to the next level."
One of the many success stories is H.P. Rama, who started with a small investment and took over a 37-room hotel in Pomona, California. He is now the head of JHM Hotels, which runs 32 properties, with 5,000 rooms, in nine states. A founding chairman of AAHOA, he has also served as chairman of the American Hotel & Lodging Association (AHLA).
Rama said he sees an ever-growing presence of Indian Americans at all levels of the US hotel business in the years ahead.
"I have no doubt that the second generation will dominate the lodging industry in this country in all segments of the market," Rama said.
The "Motel Patels"
Ok, but on the positive side...these guys run profitable hotels. They don't go bankrupt. You need to ask yourself how they do it. Obviously, they cut corners and they might not change sheets everyday...but generally, they run excellent hotels and most folks recommend them.
You know - that is INCREDIBLE. More power to them.
Did they do it with the money they received from the brits for reparations?
Interesting. Work hard, pay your bills, and succeed. What a concept!
I had a friend named Patel who would say, "Hotel, Motel, Patel."
I have taught maybe 5 Patels all from families that own hotels.
or Potels....
Cheers, and Merry Christmas :)
This would be a splendid moment to re-read Sowell's "Migrations and Cultures" which discusses how certain immigrant ethnic groups specialized in certain industries.
As an aside I recall reading about the now-forgotten black motel chains in the South that died out after integration made such special arrangements unecessary.
You mean a formerly oppressed minority has become largely successful without receiving reparations?
If I am not mistaken, you forgot the 'sarcasm' tag. Apparently, they got HUGE reparations! Lol!
http://timesofindia.indiatimes.com/articleshow/1294956.cms
LONDON: Second-generation Indian immigrants are breaking their adopted country's class barriers with consistent ease and steaming ahead of much of white, black and brown Britain, new research has found.
The research, which tracked 140,000 children born in England and Wales over a 30-year period, found that a massive 56 per cent second-generation Indians sailed over class barriers and went into professional or managerial posts, compared with just 43 per cent of white children.
In a further breakdown of what it called the "Indian success story", the study added that Being Hindu or Jewish enhanced the probability of a professional/managerial class outcome, other things being equal, while being Muslim, Sikh or from a religious group other than the main religions made such a destination less likely".
However, the study admitted that today's immigrant successes could not discount the reality and dreadful toll of the so-called "ethnic penalty" levied on newer, foreign-origin claimants for jobs and positions.
The research said two-thirds of British Pakistani and Bangladeshi children remained static and at the same working class levels of their parents, thus languishing at the bottom of the UK's social and economic mobility ladder.
The study, commissioned by the Joseph Rowntree Foundation and conducted by Essex University sociologist Dr Lucinda Platt, is considered one of the most comprehensive attempts to track ethnic minority "life chances" in the world of Western opportunity. Platt concluded that the differing levels of South Asian success makes for caution "in what we claim for 'ethnicity' and what we attribute to it".
Platt said it was indisputable that British Indians were taking full advantage of the fact that an expansion in professional and managerial occupations over the past 30 years had created more "room at the top". But she cautioned that the "welcome progress" of Indians and Afro-Caribbeans was "no cause for complacency (because) Britain is still a long way from being a meritocracy where social class plays no part in determining children's chances of well-paid careers".
"Ok, but on the positive side...these guys run profitable hotels. They don't go bankrupt. You need to ask yourself how they do it. Obviously, they cut corners and they might not change sheets everyday...but generally, they run excellent hotels and most folks recommend them."
There are several secrets to their success.
One: Indians will avoid going public by relying on private financing using a network of private investors who are family members or investors with which they have long standing ties.
They start small and build.
They never overextend themselves.
They are content to build their businesses over several generations.
They believe a reasonable profit is the first goal. Windfall profit is reckless.
For the Indian businessman capitalism is like brick laying. One brick at a time and don't pat yourself on the back until the building is finished.
Wow, now I'm really sorry we took their land and put them on reservations.
Thanks for the tip!
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