Indian Hoteliers and Their Role in the Hospitality Landscape in the USA

A majority of hotel properties in the USA are owned and operated by entrepreneurs of Indian origin. Elie Maalouf, IHG Hotels & Resorts CEO, recently appreciated and highlighted the important role played by Indian hoteliers in the American hotel landscape. 

To quote his statement, “Nearly 60% of hotels in the US are owned by people of Indian origin. They are the single biggest force in America’s hotel industry, and also in the Canadian hotel industry. The largest proportion of owners for us and our large competitors are people of Indian origin in North America.”

Indian hoteliers have been making their presence felt across hotel segments and types – luxury, budget, resorts, boutiques, and hotels. In this blog post, we explore the rise and contribution of Indian hoteliers in the USA on the occasion of Holi – the festival of colors.

The Rise of Indian Hoteliers in the USA
The journey of Indian hoteliers in the American hospitality landscape sector commenced in the 1970s. A group of migrants created footprints in the American hospitality industry by purchasing small and budget-friendly motels in struggling neighborhoods. Their handwork, business acumen, and family labor made these motels profitable in a short period.

The initial success encouraged many entrepreneurs from Indian origin, mainly the Gujarati community to enter the hotel business. Their impact on the American hospitality industry can be determined by the popular term “Patel Motel”. The term depicts a surge in the number of motels owned by Patels – an Indian surname most common in Gujrat.

Indian American author Mahendra K Doshi documented the journey and rise of American hoteliers from the Gujarati community in his book “Surat to San Francisco”. According to Doshi, “Patels are power to be reckoned with. They are not only influential, but they also dominate the American hospitality landscape. They have a big say in the American travel and tourism industry.”

According to industry reports, Indian-origin hoteliers own over 36,000 hotels across the U.S., a majority 60% share of all U.S. hotels. This is a growth from 27,000 to 30,000 hotels in 2020, nearly 50% share of all U.S. hotels then.

The Indian Hoteliers are present largely in the Sun Belt regions of Texas, Oklahoma, Arkansas, Louisiana, Georgia, Texas, Florida, and California. In Texas, Oklahoma, Arkansas, and Louisiana, Indian hoteliers own a staggering 90% of hotels. 

Indian hoteliers have a strong presence in various hotel and motel segments in the USA, across economy, midscale, upper midscale, upscale, upper upscale, and luxury. They are particularly dominant in the economy segment, with a 65%+ share. However, this does not preclude their strong presence in other segments, where they still have a large 40-60% share.

 

Key Contributions of Indian Hoteliers in America
Despite being a small community, Indian hoteliers contribute immensely to the growth of the U.S. hospitality sector. 

Economic Growth and Job Creation
Indian hoteliers have been driving economic impact across the U.S. in three major ways. Firstly, they contribute hundreds of billions of dollars to the U.S. GDP.. Secondly, they help local economies and communities by creating millions of jobs (directly and indirectly) in various states. Thirdly, they generate substantial tax revenues at the local and state levels. 

Operational Efficiency
Indian hoteliers have been outperforming competitors by maximizing profitability without compromising service quality. Deep industry knowledge and expertise help them adopt emerging hotel industry trends early by improving operational efficiency and accomplishing long-term sustainability.

Brand Expansion and Franchising
Indian American hoteliers have built a reputation by acquiring and managing franchise properties efficiently and by maintaining brand standards, boosting guest satisfaction, and scaling up operations.

Community Engagement
Indian American hoteliers are committed to giving back to their society. In addition to sponsoring philanthropic efforts and social initiatives, they promote community engagement via auspicious Indian festivals like Holi, Diwali, Dussehra, and Durga Puja amongst others.

Indian value of “Atithi Devo Bhava” Among the Key Factors Driving the Success of Indian Hoteliers
While there are many other factors in their success, the philosophy of “Atithi Devo Bhava”, which translates to “A Guest is akin to God”, has been an important one. It is a traditional Indian value of revering guests with the same respect as a god. By imbibing this philosophy in their treatment of hotel guests, Indian Hoteliers have been able to delight their “guests” over the years, thereby building lasting relationships and success.

AVANA Capital: Supporting Indian Hoteliers in Their Growth Journey
Like Indian Hoteliers, AVANA Capital also believes in building lasting relationships with our partners. As an experienced and leading hospitality lender, AVANA Capital is proud of our relationship with many Indian hoteliers through their journey of growing from their 1st hotel to today owning multiple hotels. 

We partner with them in several ways. Firstly, we meet the varying financial needs of hoteliers by offering tailored credit solutions – construction loans, hospitality business loans, commercial bridge loans, and SBA 504 loans – at competitive interest rates.

Secondly, we accelerate hotel project development by forming partnerships and joint ventures with leading players. Our private credit partnership with Oaktree Capital Management L.P. creates opportunities for hoteliers to secure credit worth $250 million. At the same time, hoteliers can reduce the development timeline significantly by joining our co-lending construction program with IHG Hotels & Resorts.

---

Conclusion
Indian hoteliers in the USA continue to drive the growth of hospitality sectors in the country. In addition to fostering brand expansion and franchising, their focus on guest servicing, improving operational efficiency, community engagement, job creation, and economic growth are the key factors behind their success.

AVANA Capital appreciates the role and contribution of Indian hoteliers in the American hospitality landscape. At the same time, we are proud of our long-term partnership and reiterate our commitment to continue to support them in their journey and success.

Happy Holi from AVANA Capital!