Case Study on Gujaratis and their Obsession with Owning US Hotels

Aditya Sankaran Aditya Sankaran
Mar 13, 2022 8 min read
Case Study on Gujaratis and their Obsession with Owning US Hotels

With people from various communities flocking from one place to another in search of new jobs and opportunities, globalization has spread its tentacles in all aspects of human life. The American hospitality industry is no stranger to it. This can be observed in the multiple small-sized hotels (also known as “motels”) spread across the interstate highways which connect one major American city to another.

According to a 2017 Report by The Washington Post, more than 40 percent of the motels in the United States are owned by Indian-Americans and out of that 70 percent of them are owned by Gujaratis and most of them have the surname “Patel” or “Amin”. The surname Patel is synonymous with motels so much that there is a light-hearted joke prevalent in America that the Patels have their own “Patel Motel cartel”.

So what are the main reasons for this phenomenon? How did it begin in the first place and by what historical factors it was aided? What are the various issues Gujarati motels-owner face? We shall describe all of these in this case study.

A Brief History
Reasons for their Success
Chan Patel: A Success Story
The Challenges Gujaratis had to face
Current Situation
In Popular Culture

A Brief History

It all began in 1942 when a man named Kanjibhai Manchhu Desai left Gujarat in search of new opportunities. He was joined by two Gujarati farmworkers, and they took over a 32-room hotel in Sacramento, California, after the property’s Japanese-American owner was forced to report to a World War II internment camp.

Soon Desai moved to the Hotel Goldfield in San Francisco, where he also enlisted the help of other immigrants from Gujarat. The Immigrant and Nationality Act of 1965 also acted as a catalyst for this process, as now more Gujaratis were allowed to pursue their dreams of settling in the United States.

Soon, other Gujaratis also followed, not only from India but also from other parts of the world. Most of them moved in as refugees from Uganda when their dictator in Idi Amin ordered to expel around 55,000 Indians who were living there, and a majority of them were Gujaratis. They soon found a new home in the various districts of America. Some Gujaratis also came from other parts of the world, like the United Kingdom, Pakistan, etc.

By the 1980s, the second-generation kids of these immigrants started expanding the frontiers of their parent’s businesses. For example, they acquired furthermore motels to build their chain of motels across various states. They made further renovations and this led to even more revenue. By 2007, they owned around 21000 of the 52000, a staggering 42% of the US hospitality market.

Now we have discussed briefly the history behind this, we would analyze what are the various reasons which led to the Gujarati community’s success.

Reasons for their Success

Strong Community and Family to Rely On

The Gujarati Patel community shares a strong bond, be it with their friends, family members, or anyone within their community. This can be symbolized when Kanjibhai Desai encouraged his community to enter the hospitality business with the quotation: “If you are a Patel, lease a hotel.”

It is widely reported that they trusted a fellow community member so much that they would give them when needed a “handshake loan”. These types of loans do not involve any sort of collateral, no strict payment schedule in the form of instalments, or anything they can pay whenever they want.

They also took the help of their partner and children, to help them run the daily operations, and if these were not enough, they also called their distant relatives from India to aid them for free. This was different, unlike say other American owners who had to pay out a significant portion of their revenue in form of wages to employees. Thus, the Gujarati motel owners made the motel their own home.

This statement by Gary Patel, a small-motel owner in Michigan, explains the gist of the whole paragraph,

“About 40 percent of the Patels know each other, through friends or family, so when you buy your first property, there is someone to help you with the down payment, someone to be a partner.”

Strong Work Ethic

Gujarati motel owners strongly believe in “Athithi Devo Bhava” as in Guest is God. So, these Gujarati motel owners would work hard to ensure their customers faced no issues during their stay and if they somehow had, it, such as say the pipes being clogged, or say any other basic issue, they would rather learn how to fix that issue on their own, instead of hiring a third-party vendor to cut costs.

They were ready to do the dirty, unglamorous work to attain their goals as they saw the long-term benefits.

Strong Business Acumen

Gujaratis have had a strong business acumen that is they always look for better opportunities and capitalize on the right moment. This can be explained by this statement of Vinay Patel, a second-generation immigrant who currently owns a full-service Holiday Inn in Sterling, Washington where he said that his parents built one hotel and sold it, then built another and sold it, and they repeated this chain of buying motels at a low cost and selling them at a high cost.

Chan Patel: A Success Story

Chandrakant(Chan) Patel -  first Indian hotel owner in Dallas
Chandrakant (Chan) Patel - First Indian Hotel Owner in Dallas

The story of Chandrakant(Chan) Patel is a good case study that enunciates all the major reasons for how Gujarati motel-owners have succeeded. He came to the United States in the 1960s for his higher studies and soon got a job as an executive at the now-defunct domestic airline Braniff International. He also married and had four children and life was going smooth.

In 1976, he bought Alamo Plaza Hotel Courts Dallas, in addition to his job as an executive. He was the first Indian hotel owner in Dallas. During the lunch break of his job, he would man the front desk during that time and give a helping hand to his wife to do laundry for the customers and other odd jobs.

Soon he found it tough to maintain both tasks, and while he had to sacrifice his personal life, he also realized the benefits he was having. He saved a lot of money in terms of rent, utilities, and phone bills because he was staying on his property.

He never felt bad doing small jobs because of the various gains he made financially. He wanted to focus on getting more revenue, so he took the bold risk of quitting his stable job as an airline executive.

Soon, his income doubled from the 35,000 dollars he was earning from the airline job and the motel business grew exponentially like he had 13 motels under him by 1987 from the one he had eleven years ago.

After that, he passed this business to his sons and began a new venture of starting a bank, which he did by the name of State Bank of Texas, which was to help immigrants get affordable loans for their new businesses. This bank also became a successful venture and by 2018, it was seen as one of the top 100 community banks with assets less than 3 billion dollars in America.

Chandrakant Patel is thus a success story who personifies all the reasons for how Gujaratis have succeeded.


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The Challenges Gujaratis had to face

One of the biggest obstacles they had to face was racism and xenophobia. They were not accepted in their society and had to face taunts about how they were of an “inferior race” and so on.

White motel-owners, especially in the rural parts of America, had to put up signs with “American Owner” and so on. But they managed to overcome all of these through their hard work and determination.

They made a lot of efforts to get along with the local community, they contributed a lot of their profits to the educational institutions, hospitals, etc, which won them a lot of faith. Now the second-generation and beyond immigrants are integrated with their society as a whole.

Current Situation

Now roughly nine decades have passed since Kanjibhai set up his first motel, and we have discussed how motels owned by Gujaratis have grown leaps and bounds since then. While they had already initiated efforts to revamp their motels to keep up with the times (and they would continue to do so). Renowned hotel chains like Marriott, Hilton, and Starwood have also partnered with Gujaratis to franchise their hotels for them. This is all because of their perseverance.

They have been depicted in various forms of media. The 1991 Denzel Washington-starrer “Mississippi Masala” is about how a Gujarati couple and their daughter had to leave Uganda and how they assimilate with African-American culture when they decide to settle in Greenwood, Mississippi as refugees.

Noted author Pawan Dhingra has also published a book by the title: "Life Behind the Lobby: Indian American Motel Owners and the American Dream” in which he focuses on all these details about the Patel Motel Cartel in detail.

Life Behind the Lobby Book
Life Behind the Lobby Book

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Conclusion

Thus, Gujaratis, through their sheer hard work, resilience, and perseverance, have managed to own more than about 60% of the US Motels and they can even go beyond that. They are one of the major reasons why Indian-Americans top the median pay chart when they care compared with other communities such as White Americans, Hispanic Americans, Vietnamese Americans, and so on. Thus, they are a matter of pride for our country. Whenever we face any obstacle in life, we have to remember their spirit.

FAQs

How many US hotels are owned by Indians?

One out of two US motels or hotels businesses is owned by Indian Americans.

What percentage of hotels are owned by Patels?

40% to 60% of U.S. hotel and motel owners are Gujaratis, of which many have their last name as Patels.

Who owns most hotels in the USA?

Wyndham Hotel Group owns the most hotels in the USA, the company has over 8,092 hotels in 66 different countries.

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