Gujaratis not only play an important role in the US Lobby, they also savour a major place in the motel industry, with 40% of the motels in the United States owned by them. The first motel was opened in the 1940s, a venture that since, took popularity and is now called the 'Patel Motel' phenomenon. People eventually started bringing their relatives to work, who after spending 5 years, naturally moved on to create franchisees of their own. The domino effect has made the Gujarati community synonymous with motels. They now own 21,000 of the 53,000 hotels and motels in the US which makes for a staggering 42% of the US hospitality market, with a combined worth of $40 billion.
The new generation, however, strives for non-conventionality and have ventured outside the known territory. They are moving beyond motels, and if they aren't, they are changing traditions in their family businesses.
“The younger generation of Patels are moving into various businesses. Their entrepreneurial spirit is unique to our culture; we are seeing them move into food businesses in a big way,” says Mike Patel, a prominent hotelier from Atlanta, Georgia. Former president of the Asian American Hotel Owners Association says, “Many of the younger members of the community have gone to business schools; some of them are diversifying because of the economic downturn.”
Former principal and VP, operations, at his family owned TNJ Group, Pranav Patel holds management degrees from the University of New Mexico. He is well aware about the trends of second-generation Gujarati hotel entrepreneurs exploring new verticals within the hospitality sector and others. “After growing my family's hotel portfolio for eight years, I launched HotelUpgrade, a mobile app, last year to help address the issue of rising guest acquisition costs in the hotel industry. This is the No 1 issue we face as an industry, outside of legislative problems,” says Pranav.
His portfolio also extends to Great Clips hair salons, a prominent salon brand. He is the co-founder of SafelyStay, a venture-backed company that helps online travel agencies and vacation rental market.
Binita took a break from her family business in 2009, and joined he Cornell's School of Hotel Administration. She later pursued an internship in South East Asia and worked for four years in finance and assets management.
“I came back to our family hospitality business to work with my parents and brother as the company portfolio has been diversified,” she says. According to Binita, the generational divide between management styles is evident in her company. Her parents hardly had experience in managing people. “They tended to be much more lenient with employees.” Having been an employee and having received a university education in management, personal relationships are far less important than efficient business practices, to the 30 year old. Binita now handles the asset management and investment operations of the company.
“Many of the younger members of the community now have the freedom to either work in the hotel industry or pursue other career paths,” says Ravi Patel. A Democratic Party candidate for Iowa's first Congressional district and if elected, the first Indian American in the US Congress from Iowa,
Ravi Patel thanks his parents who set up businesses through their perseverance. He feels it enabled the second generation to foray into an array of new industries. "Younger members of the community are pursuing disciplines outside of hospitality or studying the more technical aspects of the hotel industry. We are innovating in an industry that historically has operated in a pretty traditional way,"
Apart from managing his family company, Ravi is an angel investor in his home state Iowa as co- founder and managing partner of Built By Iowa, an early and mid stage business incubator through which he has invested in over 20 startups.
“My parents have been in the hospitality business for many years. But my decision to move away was inspired by an uncle, who branched off into manufacturing,” says Devesh Patel. He set up Infinilux in 2008, a company that manufactures LED lighting in Asia and sells primarily in the North American market. Even though the family doesn't own any assets in the hospitality sector, Devesh, still takes an interest in the family business and doesn't rule out acquisitions.
“The current economic situation in the US is not very favourable for the hospitality sector,” according to Devesh. For now, he is happy his company is firmly on the growth path. “On the hospitality front, we are still keeping ourselves agile for any changes in the market.”
Devesh sees LED lighting as a revolutionary technology of the future. Risk is an essential part of any business and something that second generation Indian-American businessmen like himself are always prepared for. “It's something like our parents, who moved here to the US from India, experienced as owners of motels and liquor stores,” he says.