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The 'Patel-motel' phenomenon; Immigrant entrepreneurs from India, many with the same last name, now dominate the hospitality industry here and around the nation

During the past 30 years, immigrants from the same region of India -- most with the same last name -- have come to own more than 50 percent of the country's economy motels and up to 40 percent of the total lodging market, experts estimate.

This mind-boggling industry dominance, dubbed the "Patel-motel" phenomenon, is sweeping through Western New York, proliferating at all levels of the hospitality industry.

From the 10-unit Crown Inn in the Town of Tonawanda owned by Pari Patel, to the 486-room Adam's Mark Hotel owned by a different Patel family, local hoteliers are increasingly Asian Indians named Patel, though they are not usually related.

"We've grown a lot, doubling our number of properties, especially in the last four years," said Jayesh Patel, whose firm owns 22 area hotels, the most of any local Indian company. "Indians have moved here from all over and have bought or built property."

These hoteliers now lay claim to at least 85 percent of the area's budget lodging market and 30 percent overall, and their businesses are heavily concentrated in the area's hospitality hubs, said Jayesh Patel, who is also the northeast regional director of the Asian Americans Hotel Owners Association.

In the past few years, local Indian hoteliers have built the new $6.2 million, 72-room Hampton Inn in Niagara Falls and bought the $7.6 million, 146-room Comfort Suites in downtown Buffalo and the 120-room, $3.5 million Ramada Inn at the Buffalo Niagara International Airport.

"It's one of the great immigrant success stories," said Arturs Kalnis, an associate professor at Cornell School of Hotel Administration. "How they've methodically stuck to this one business and have come to dominate. And over time, they've achieved success and respect in the industry, among their customers and in their communities."

Indian Americans account for less than 1 percent of the local and national population, making their domination of a single industry unique among other minority groups, experts say.

"In the beginning we were marginalized in the industry, but today we are the industry," said Hermant Patel, chairman of the Atlanta-based Asian American Hotel Owners Association, an organization with 11,000 members. "Our group owns 24,000 properties and employs more than 700,000 people around the country," which he says represents 40 percent of the nation's lodging industry.

Ninety percent of the AAHOA's membership have the Patel surname. In most cases they are not related but are part of an entrepreneurial-minded population, respected for its business acumen, hailing from Gujarat, a state in western India where the Patel name is common.

"Most Patels are business-savvy, and they don't mind getting their hands dirty, as long as there's money to be made," Jayesh Patel said.

In Niagara County, Indian Americans account for 0.3 percent of the population but are now major hospitality players, tapping into tourism dollars with downtown Niagara Falls properties and a near total takeover of the city's three-mile strip of largely budget motels.

"It's not Niagara Falls Boulevard anymore. You can call it Indian Boulevard," said Manjit Saran, who has owned motels on the boulevard since 1986. "I don't even know which motel is not Indian-owned. When I started, I was the only Indian on the boulevard."

Before Jayesh Patel acquired almost two dozen properties, he learned the business from his uncle who ran a Dunkirk motel. The extended family lived on the premises -- a common cost-cutting practice among newer owners. When Jayesh Patel was ready for his own motel, his uncle and other relatives pooled their resources to give him his start with a Days Inn in Hamburg. They also assisted in maintaining and operating the motel. When the time came for Jayesh Patel to add to his portfolio, the same group chipped in.

That group approach continues. Today his company, Rosewood Hotels, has more than 20 owners, who are proprietors of almost two dozen property. Jayesh Patel's story is the norm among Indian hoteliers, many crediting a similar support system for showing them the ropes and providing start-up capital.

"I was able to grow my business because of my friends and family," said Pari Patel, proprietor of the Crown Inn and three other properties, including a $4.5 million, 74-room Motel 6 on Niagara Falls Boulevard in Niagara Falls built in 2008. "I borrowed money from my friends for my down payments. And my family help me a lot. My wife is a hard worker and after school my children now work the front desk. My sister and brother-in-law also take care of two of my properties."

Saran, one of a few non-Patels and the only female Indian hotelier in the area, bought her first motel on Niagara Falls Boulevard in 1986 and her second in 1989. When her brother arrived from India, her motels were his training ground. She then helped him get his first and his second motel -- a Super 8 Motel on the boulevard.

These small, close-knit families around the country have spurred the dramatic growth of Indian-owned lodging. Western New York has 70 to 80 Indian families in the hotel business, Jayesh Patel said.

"It's all being done through family ties, and it snowballed, which kept it a pretty localized phenomenon among the Gujaratis," Kalnis said.

>California roots

Most get their starts with smaller, no-name budget motels, and graduate to larger economy franchises with limted service. In recent years, some have bought franchises with bigger brands, like Hampton Inn and Holiday Inn Express.

"The goal of most owners is to get a bigger hotel," said Saran, who had set aside land she purchased in 1991 for her move to a franchise brand. Four years ago, Saran sold her motels and sent her application, along with the required $50,000 check, to Holiday Inn. Her years of experience won her the franchise, and she built the $8.7 million hotel on Niagara Falls Boulevard in 2009. Last year, the property averaged a very profitable 80 percent occupancy.

"It's a dream come true," she said. "When I came to this country in 1974, I never could have imagined something like this. Running a hotel is different from running a motel; it's more work, but I couldn't be happier." She opened her second Holiday Inn Express this year in South Carolina.

The Indian foray into the American lodging business began in the early 1940s, but picked up in earnest in the 1970s in California with a wave of newcomers. During the ensuing decades, families gradually moved east and south, acquiring motels, withstanding discrimination, and eventually owning a huge chunk of the market.

Other ethnic groups have taken significant shares of smaller industries. Koreans have come to dominate the green grocer business in some cities, and Cambodians are known for their ownership of doughnut shops in California. But the accomplishments of Indian hoteliers is in a category of its own, said Pawan Dhingra, author of "Life Behind the Lobby: Indian American Motel Owners and the American Dream." He pegs the national Indian ownership of economy motels at more than 50 percent.

Successful immigrant ventures are typically contained within the borders of certain cities and regions and are centered on a specific industry. But the "Patel-motel" phenomenon is all over the country and encompasses wide-ranging business models, from small, limited service, independent operations to mid-level franchises to increasingly full-service luxury brands.

"It is very unique because it's nationwide, and it's such a high number," said Dhingra, who is also an Oberlin College sociology professor. "There are thousands of them, and it's a situation where you can own a mom-and-pop motel and also own a Holiday Inn."

>Finding motels

Indian hoteliers didn't own motels in Gujarat but have found success in a foreign industry that is quintessentially American.

Dhingra said, "Nothing is more Americana than the motel," built around other American innovations and concepts, like the highway system, the notion of leisure and the automobile.

So how did a subset of Indian immigrants come to dominate an industry they knew nothing about?

"It was by accident," Dhingra said. "They weren't looking for hotels; they didn't have any experience. But they were looking for some kind of self-employment."

The Gujaratis were farmers and land owners in India and prefered to be their own bosses. They entered the hospitality industry at a time when motels were being dumped on the market because of their clientele, high taxes and low revenue, Dhingra said. "There wasn't much incentive for owing a motel other than their motivation for self-employment," he said.

The built-in housing was also appealing to cash-strapped immigrants, but made the business a "24-hour headache." Over time, word spread to Gujaratis in India and other countries, and they started harboring dreams of owning an American motel. When they arrived, they lived with relatives in motels until they were ready for their own.

New immigrants tend to follow the path of their ex-patriates who arrived before them. In the United Kingdom, Gujaratis have come to dominate the convenience store business.

"When I moved here, it was to go into the motel business," Pari Patel said. "I didn't think about another job because the motel business is the only business I know."

Jayesh Patel has two new hotels planned for this year. Pari Patel has a LaQuinta Inn planned for Niagara Falls.

Jayesh Patel has convinced a few hoteliers to move to Western New York from other parts of the United States because the operation and maintenance costs are lower here. He said the area's proximity to Canada, the Hindu temple in Amherst and the rapidly growing Indian community will attract more hoteliers.

"When you come from a different country to a completely strange land, you want to be in a community where you can be with your own people," he said.