Source: http://www.nytimes.com/1999/07/04/magazine/a-patel-motel-cartel.html -By Tunku Varadarajan
‘You’re getting the last room in Huntsville,” the man at the front desk rasped. I was in the heart of a certain kind of Texas — the kind I’d probably only visit in pursuit of a story — and the room was a godsend. I thanked the man and we shook hands — not a gesture you often see enacted between owner and customer at the front desk of an Econo Lodge. But he was Indian and so am I, and it was our little way of touching base.
This was two years ago. As I was then new to America, I asked him bluntly what on earth had brought him to a place like Huntsville. My naked curiosity amused him. ”Why shouldn’t I be here?” he said. Indians like him were everywhere, especially in places like Huntsville. Go 15 miles west and you’d find a motel run by his cousin. Ninety miles south and there was another cousin in another motel. An uncle had a place, too, somewhere in Georgia. Wherever there was a motel in the United States, he said — and I mistook this assertion for hyperbole — there were likely to be people from India running it. The statement, I learned later, was not all that far from the truth.
America’s motels constitute what could be called a nonlinear ethnic niche: a certain ethnic group becomes entrenched in a clearly identifiable economic sector, working at jobs for which it has no evident cultural, geographical or even racial affinity.
I don’t mean Italians owning pizzerias, or Japanese people running judo schools. I mean, to use an obvious example, the Korean dominance of the deli-and-grocery sector in New York — a city where the Chinese run most laundries and Sri Lankans, in case you didn’t know this, run most porn-video stores. Or the Arabs in greater Detroit, who have a stranglehold on gas stations, or the Vietnamese who monopolize nail salons in Los Angeles. Farther afield, I could mention London’s taxi drivers, sharp-tongued in their big black cars, many of whom are Jews from the city’s East End; or the security guards outside New Delhi’s more affluent residences, virtually all of whom are Nepalese; or the prostitutes in the United Arab Emirates, who are so often women from Russia.
According to the latest figures from the Asian American Hotel Owners Association (A.A.H.O.A.), slightly more than 50 percent of all motels in the United States are now owned by people of Indian origin. Pull off any Interstate highway and look for a cheap bed for the night and there is a better-than-even chance that the motel you will curl up in belongs to Indians. (Looking at the broader spectrum of all hotels of any sort in the United States — from trendy boutique hotels in Manhattan to mom-and-pop outfits in the boondocks — almost 37 percent are owned by Indians.) If you bear in mind that Indians constitute less than 1 percent of America’s population, the conquest of this economic niche appears extraordinary.
Look a bit closer and the picture is even more arresting: about 70 percent of all Indian motel owners — or a third of all motel owners in America — are called Patel, a surname that indicates they are members of a Gujarati Hindu subcaste. ”There’s a thing our parents tell everyone, so don’t yawn if you’ve heard it already,” says Mit Amin, an urbane 39-year-old who owns the Beverly Hills Inn, a chic bed-and-breakfast in the Buckhead section of Atlanta. ”In some American small towns they think ‘Patel’ is an Indian word for ‘motel.’ Can you blame them? As for me, I’m glad I’m called Amin. Wouldn’t you want to be called Brown if the rest of the world was called Smith?”
Patels and Amins, however, are not as far apart as Smiths and Browns might be. They share the same slot in the elaborate Indian caste structure, with its four principal castes and myriad subcastes: they are both vaishyas, or traders, who were once employed to calculate the tithes that were owed to medieval kings by farmers in Gujarat, an Indian state on the Arabian Sea, where their origins lie. Most Indians believe that these people have commerce in their blood. And the Patels themselves seem to believe it, too.
‘Patels are maybe the shrewdest businesspeople in the world,” chuckled Lata Patel, who with her husband, Pankaj (”Call me P.J.”), runs the Budget Inn in Jasper, Ga., a mountain town of some 3,000 mostly white inhabitants about an hour’s drive from Atlanta. Lata, 44, is winsome and lively; when dressed in a formal silk sari she must surely be the most glamorous woman in Jasper. Theirs is a plain little motel, built in the local architectural vernacular, with a gently sloping gray slate roof, a facade of muted pink and a well-tended grass verge. At the time of my midmorning visit, Lata was in slacks and a shirt, addressing a female client as ”honey” and buzzing about the front desk with instructions for a dozy young cleaner.
This modest motel is where Lata and P.J. say they’ve found their ”American dream” — a phrase they used often, and unselfconsciously. But why? Why did they, and thousands of other Patels in America, seek their fortune in the lodging niche? Why not hardware stores, pet shops, drugstores?
Hasmukh P. Rama, 51, is the chairman of the American Hotel and Motel Association, the trade group representing America’s $85.6 billion lodging industry. Rama is tiny, only 5 feet 3 inches tall, and his pate is as smooth as a brand-new cricket ball. His surname used to be Patel, but the family decided to adopt a new one ”because Patel, as you can see, is a very common name.” He is the first Asian to head the 89-year-old organization, and at a recent Indian hoteliers’ convention in Atlanta he worked the room like a politician at a rally. Rama seemed like the man who could explain the motel-Patel phenomenon. But his answers to my questions, it turned out, seemed more calculated to promote a certain myth that successful hotel-owning Indians have begun to spin for public consumption.
”You must know the ancient Sanskrit phrase, Atithi devo bhava — The guest is God.’ Hospitality is in our culture,” he told me. ”It comes naturally to us. It is inherent in the nature of the Indian. It is natural for us to be in the lodging sector.” If that is so, I asked, how was it that hardly any of these people ran hotels before they came to America? ”It’s all about opportunity and example,” Rama replied sagely, starting into a speech about hard work. He related how he arrived in America in 1969 and noticed how ”our people” were buying motels; by 1973, he had bought one himself. Now his company, JHM Enterprises, operates 23 hotels in six states and one in India. Last year, his family created the Rama Scholarship Fund for the American Dream, with a donation of $1,000,001. (Hindus consider gifts of money ending in the numeral 1 to be especially auspicious.) The benefaction is intended to help students from minorities go to schools for hotel management.
It’s an inspiring tale, and Rama seems to want me to multiply it by many thousands to explain the Indian dominance of the motel business. But it isn’t quite that simple. ”If you look at an example of a domination of an economic niche by an ethnic group,” says Thomas Espenshade, a professor of sociology at the Office of Population Research at Princeton University, ”the general story is told in terms of the pioneers and the followers. This is so whether you look at Indian motel owners, Korean grocers, Chinese laundries.”
In this instance, the very earliest years are hazy. But the first Indian motel owner in the United States is said to have been an illegal immigrant named Kanjibhai Desai, who managed to buy the Goldfield Hotel in downtown San Francisco in the early 1940’s. By the end of that decade, there was still only a handful of Indian-owned motels, one of them owned by Bhulabhai Vanmalibhai Patel — whose grandson Pramod Patel is today a hotelier in the Bay Area; his company’s portfolio includes Holiday Inns, Ramadas and Comfort Inns.
According to Pramod, his grandfather left his Gujarati village in 1949, at the age of 29, for a better life in America. ”Only 100 Indians a year were allowed into the country in those days,” says Pramod. ”My grandfather came, met Desai and decided to copy him. So he leased the Auburn Hotel in downtown San Francisco that same year.”
By the 1960’s, Pramod estimates, there were still only 60 or 70 Indian-owned motels, mostly in California. Evolving immigration laws helped the next wave of pioneers make their mark in the 1970’s. At the time, explains David Mumford, the president of Mumford Company, a hotel brokerage in Newport News, Va., ”many American motel owners, people I call Mr. and Mrs. Jones, were aging. Motels were a postwar thing, and by the mid-70’s a lot of the people who owned them were of retiring age. Their kids were not interested in the business.” The concurrent global oil crisis meant people were taking fewer driving vacations, which hurt the motel business. Property prices were depressed. ”By the late 1970’s and early 1980’s, hundreds of motels were up for sale,” Mumford continues.
So why were these Indians attracted to them? I got a more prosaic answer to that question from Vilpesh Patel, the owner of the 85-room Flamingo Inn in Windsor, Conn. ”Technically, it’s easy to run. You don’t need fluent English, just the will to work long hours,” he says. ”And it’s a business that comes with a house — you don’t have to buy a separate house. Another important thing,” he adds, ”is the cash flow. We like that.” Vilpesh was a plain-speaker. True, the guest is God. But the guest is also gold — gold enough for Indian motel ownership to spiral upward, year by year.
Buying a motel, even one that’s in the red, usually requires a substantial down payment, one beyond the reach of most new immigrants. That, however, is one key to how this particular niche was captured. The down payment was seldom a problem for a prospective Indian purchaser, who was often able to turn to a network of relatives and friends to help him out. The story of Lata and P.J., for example, is not exactly the hardscrabble tale associated with some immigrant groups.
Following an arranged marriage in 1976 in the Gujarati town of Nadiad, they left for the United States, but not out of desperation or a lack of options at home. They left behind enviable social status; their families employed cooks, watchmen, sweepers, a chauffeur. P.J.’s family owned a marble mine. ”We had a comfortable life in India,” he says. They simply wanted independence — freedom from the web of their extended family, with its pressures to share and to conform — and the simple pleasure of living as a nuclear family. In 1991, the Jasper motel’s owner (also an Indian) offered P.J. the place for $150,000; the couple cobbled together the $20,000 down payment from their own savings and loans from friends and family. ”It was not hard for us to do.”
All of this is not to suggest that the road was an easy one. A significant number of motel owners have come not directly from India but from East Africa. The British brought thousands of Indians to their colonies there in the last century to serve as laborers and traders. They stayed on and flourished economically after these colonies won their independence. But the political and racial tensions of postcolonial Africa made nomads of them yet again. About 70,000 were expelled from Uganda by Gen. Idi Amin in 1972, and the majority resettled in Britain. In time, many would move to the United States, joining an unusual wave of well-educated Indian immigrants to this country that had begun in the mid-1960’s — doctors, academics and professionals — and peaked in the late 1980’s. By then, Indian immigrants were predominantly nonprofessionals.
Vilpesh Patel’s father, Jayantibhai, was one of those who had to migrate against his will. He used to be a prosperous dry-goods merchant in Lira, a town in central Uganda. In 1972, when Jayantibhai was 32, Idi Amin ordered the confiscation of all Asian property, stripping the owners of their Ugandan nationality. After a few months in a refugee camp in Austria, where he was separated from his wife and young children, Jayantibhai Patel ended up working as a bus conductor in London. Things changed for the family in 1989. Responding to the urgings of relatives, Jayantibhai moved with his family to America. ”With some help from my uncles,” says his son Vilpesh, ”and with the money we had from selling our house in London, Dad bought a motel.”
In the earlier days of the motel phenomenon, Indians tended mostly to buy mom-and-pop establishments. ”They liked the independence,” Vilpesh Patel told me. ”We Patels, we Gujaratis, we don’t like working for other people.” But there were other, less romantic factors keeping Indians out of the franchise motel chains. According to Mit Amin, an independent hotelier himself, ”The big brands didn’t really want us.”
Indeed, there was a time when Indians were the underdogs of the lodging sector. Mike Patel, the industry-relations chairman of the A.A.H.O.A., explains that some insurance companies thought Patels were scam artists who bought, insured and burned down the property and cashed in. He says that after a couple of fires in Tennessee in the early 1980’s, Indian moteliers had trouble getting insurance coverage. The association was formed, he adds, ”in response to that prejudice.” It began with 160 members.
The first generation of Indian hotel owners, in a manner consistent with many an emergent immigrant group, scrimped, went without, darned old socks and never took a holiday. They did this not merely to save money, but also because thrift is part of a larger moral framework, one that regards all nonessential expenditure as wasteful and unattractive. It’s an attitude buttressed by a puritanical aversion to frills and frivolities, one that has its roots as much in the kind of Hinduism that the Patels practice as in their historical tradition as commercial perfectionists. You can hear it in Lata Patel’s description of the work that went into updating and improving her property on the road to quadrupling its annual business.
Today, the A.A.H.O.A. has 5,000 names on its rolls, plus seven full-time staff members and an annual budget of $4.5 million. The market value of properties owned by association members is $38 billion. They pay $725 million a year in property taxes and employ 800,000 people. ”The hotel establishment once didn’t want to know about us,” chortles Amin. ”But now we are the establishment.”
That kind of success has, inevitably, bred resentment in some quarters. In some parts of the rural South, white competitors have been known to add a potent and less-than-subtle phrase to their motel signs: ”American-Owned.” Many of the Indian owners I spoke with acknowledge that they are aware of such attitudes, but add pragmatically, as Mike Patel puts it, they ”have learned to live with that sort of prejudice.”
”It doesn’t get us down,” he insists. ”If we survived Idi Amin, a couple of redneck motel owners aren’t going to bother us much. In any case, our motels are American-owned, too. We’re Patels, and Americans.”
Pride in the conquest of a niche has for some evolved into a curious and not very enlightened machismo. Again and again these owners will boast that they got ahead by working harder than anyone else. A senior figure in the ”Indian motel brotherhood” — his words — puts it this way: ”O.K. So your Koreans work hard. Your Chinese work hard. I’d even say that some other ethnic groups work hard, on a good day. But absolutely no one works as hard as we do. I don’t want to make a racial thing out of this, but there isn’t anyone who can match us for effort, dedication, stamina on the job.”
This Braggadocio aside, what else has kept other hard-working immigrant groups from breaking into the clearly lucrative motel sector? For starters, other groups have muscled in — Taiwanese innkeepers in Southern California, Iraqi Christian motel owners in the Detroit area — just not in such great numbers. The most significant reason early on was probably a combination of the idea that the motel sector didn’t look terribly attractive when Indians started buying in, and those who were buying were able to assemble unusual amounts of cash from an extended group of relatives and friends. The unique kinship ties in the group unquestionably help in other ways — for instance, a kind of bush-telegraph network of Indian moteliers often relays breaking news of properties for sale to other members of the same community, observes Mike Patel.
Eventually, the mere perception of dominance becomes self-fulfilling. A number of moteliers to whom I spoke said that white American hotel brokers would often sound out Indians first if they have a property up for sale. Mumford, who has been in the brokerage business for 21 years, said that this was ”completely natural, given the track record of the Asian Indians.” His company has a database of more than 7,000 ”buyer-and-seller prospects” — about 1 in 4 of whom have Patel as their surname.
”When we have a motel that comes up for sale, my team sorts the questions and decides who a prospective buyer might be. If it’s a motel with less than 60 rooms, the likely buyers we identify will be Indian 98 times out of 100,” he told me. ”And why not? They run them better than anyone else.”
Such is the world that now works to the benefit of Mit Amin, the bed-and-breakfast owner in Atlanta, who is the modern face of the Indian hotelier. He grew up in Manchester, in the north of England, where his parents moved from Kenya in 1964. His father came to America and bought a motel in 1982, but Amin himself was reluctant to leave his then home, London. Finally he gave in, moving to Hickory, N.C., to manage one of his family’s properties. ”It was Hicksville,” he tells me. ”I kid you not, mate — the whole town sat out on the porch in rocking chairs.”
Nevertheless, in 1990 he purchased the Beverly Hills Inn in Buckhead for $713,000. ”The guy wanted $100,000 down payment. I got $50,000 from my dad and $50,000 from my in-laws. The place is now worth about $2 million.” Amin works hard — sometimes 15 hours a day” — but to tool around Buckhead with him in his shiny black Mercedes convertible is to see the older, frugal ways giving way to a distinctly Western joie de vivre.
”Why not?” he asks. ”I like to live well, to spend money. It’s not an extravagant life style. I’m enjoying the fruits, but I’m not stripping the garden bare!” He also owns another Mercedes and a BMW — as well as a Rolls-Royce. ”An old-fashioned Patel would say, Why so many cars? But I’m just enjoying my achievements, right? It’s a generation thing,” he says. ”My dad never went out to dinner, never indulged himself. He saved every penny. That’s how he had $50,000 to give me.
”I’ll tell you something, though,” Amin adds. ”If my dad had enjoyed the fruits of his labor, I’d have been in trouble. Big trouble.”