Trailblazer

The Patel invasion

From owning a handful of motels to becoming a lead player in the industry, the Patels caused a quiet revolution in America's hospitality industry. By Neeti Mehra

The iconic Wigwam Hotels owned by the Patels in California

It all started when a few intrepid Gujaratis made their way to verdant foreign shores to carve out a better life for themselves after India got her independence. While a notable number went to Africa, the others made their way to the United States. However, by the 1960s, many second-generation Indian immigrants settled in Africa too started migrating to the United States due to political instability - all in pursuit of the immigrant dream of prosperity.

They opted for the hospitality industry in the United States for pragmatic reasons. Firstly, it offered them immediate housing, and secondly, it provided them with a regular cash flow. Most importantly, it let them assimilate into the culture of their adopted country.

At that time the American motel industry was experiencing a downturn. Motels were distressed and available for low prices, partly due to high gas prices leading to reduced interstate travellers. Interestingly, motels could be acquired at a price equal to the investment for acquiring permanent residency in the country at that time - about US$ 40,000. While some Patels were flush with cash, others toiled and scrimped to invest in a motel.

In any case, it wasn't a cakewalk. Brown skins weren't easily accepted behind the counter and there was discrimination. Patel motels weren't considered 'professional,' with disparate cultural differences not going down too well. But they were industrious and hard working. When the need arose, they would even do menial jobs and work unconstitutional hours. At times the entire family would chip in to help. As business expanded, more families migrated from India. There was room for all, and then some more.

But it wasn't the only problem these motel owners faced. Many hotels met with resistance from banks and insurance companies, especially those with the surname Patel. Non-Indian competitors made the gap even more obvious by putting 'American owned' banners flapping in the wind. This is something that resurged after 9/11 too. Despite these road bumps, the Patels improved profitability of their roadside hotels.

Then in 1985 a group of Indians came together to form what was eventually known as the Indo American Hospitality Association, which was later merged into Asian American Hotel Owners Association (AAHOA). Founded in 1989 with little more than 100 members, AAHOA was formed to promote and protect interests of its members through programmes and initiatives in advocacy, industry leadership, professional development, membership benefits, and community involvement.

Danny boy

It's been over two decades since, and a look at the executive committee of AAHOA is the most telling factor of the Patel phenomenon in the United States. Its chairman, and also the North Georgia regional director, Dilipkumar R 'Danny' Patel was born in Afwa in the state of Gujarat. He migrated to the land of milk and honey, the United States, and took up residence in Alabama, way back in 1986. Staying with an uncle, he learned the tricks of the trade in hospitality. An enthusiastic entrepreneur, he raised money and purchased a small independent motel in Montezuma, Georgia.

Patel learned the ropes hands-on with support from the AAHOA community. From that date till now, the hospitality novice has developed 34 franchise and independent motels within Georgia and Alabama. In fact, he also served as the general contractor for 27 properties. A veteran in hospitality today, he is also the founder of the American Pride Bank. In a span of 20 years, Danny Patel is the poster boy of the 'Patel Motel' wonder.

Consider the statistics. AAHOA represents more than 8,300 members and is formidable in the hospitality industry in the country - its members own more than 20,000 hotels, with a total of one million rooms. This represents over 50 per cent of the total economy lodging properties, and nearly 37 per cent of all hotel properties in the United States.

Dissecting this ownership further, approximately 11,700 are franchised properties while 6,300 are independent, the market value of each being US$ 29.9 billion and US$ 8.1 billion, respectively. The total market value of hotels owned by the members amounts to approximately US$ 50 billion. They pay nearly US$ 700 million in real estate taxes annually, and create more than one million jobs. Clearly, there is a Danny Patel behind each such property!

So how did the Gujaratis come to control half of the United States motel industry? Modernising, updating and refreshing values are on the agenda of AAHOA. Danny's message to the members as chairman is directive of the clout they would like to wield in the industry. It is hinged on better education programmes for effective communication within the industry, the community and to Capitol Hill - to ensure that the voices of the enterprising Asian hoteliers' ring loud and clear.

As outsiders, the Gujaratis carved a niche for themselves through the franchising model, moving from being mere peripheral players to occupying a position in the mainstream hospitality universe.

Moving beyond America, there is interest in the home country too. AAHOA led a delegation of over 50 people to India in February this year, which included its office bearers, members, vendors, and representatives from leading franchise companies for a four-city visit: Mumbai, Delhi, Jaipur and, hometown for many, Ahmedabad. The agenda was to scope opportunities for development in the motherland. This, the association has announced, will be an annual pilgrimage. Perhaps, this will herald reverse migration and the beginning of the Patel revolution in India.

But for the Patels, it is not only business as usual. Apart from this acumen that is firmly ingrained in their DNA, they have a value system and the motel owners are also doing their bit to keep the culture of their adopted country intact. Jagedish and Ramila Patel took over the iconic Wigwam Motel in Rialto, California, which stars in Pixar's hit animated film Cars.

This Frank Redford-built property with its legendry teepees owes a lot to its present owners. The Patels painstakingly restored the place, which had degenerated to dereliction and would attract unsavoury ladies of the night and drug peddlers. They restored the neon signs, revamped the pool and did up the rooms. Today, the motel stands with all its glory on the iconic Route 66, proving that at a Patel motel you will receive much more than a comfortable night's stay.

"The American dream gives anyone the motivation to succeed. Sometimes immigrants forget that they are operating business in a totally different country, with different customs, and the fact that America is a melting pot of cultures," says their son, Manoj Patel. He feels that more flexibility should be brought in to make adjustments for learning. "Not all guests will be so sensitive to whether the motel is East Indian owned or not," he points out, adding that they haven't faced any such difficulties yet. He believes that Indians find the motel business similar to the way life works back home in India. On a recent visit here, he was able to see a different way of living where communities and families in rural areas worked, played and lived in the same environment. "I see the motel business in the same way," says Patel Jr. It's the gift of a value system and a culture that merges the homeland with the American heartland.