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The U.S. hospitality industry has been shaped by the entrepreneurial spirit, hard work, and innovation of individuals from various communities. Different groups have brought their unique strategies, cultural values, and perspectives, helping drive the growth and success of the industry. In this article, we focus on one such community—Indian-origin hoteliers—who have made a significant impact. While they represent just one of the many groups that have contributed to this thriving sector, their unique business strategies, cultural values, and legacy have played an integral role in shaping the hospitality landscape in the U.S.
Indian-origin Hoteliers have a strong presence in the American hospitality industry. According to an industry report, Indian-origin hoteliers own and operate over 36,000 hotels across the U.S., a majority 60% share of all U.S. hotels. They have been driving the growth of the U.S. economy by creating employment opportunities for over 1 million workers directly and indirectly across states.
In addition to their entrepreneurial spirit, the rise and success are being driven by deeply rooted cultural values like family unity, perseverance, and a focus on generational legacy. The relationship-driven approach to business helps them remain profitable in the long run as well as gain a competitive advantage.
As a leading hotel construction lender, AVANA Capital respects the journey and success of Indian-origin hoteliers. At the same time, we support their growth by offering tailored credit solutions – hospitality loans, construction loans, and commercial bridge loans – aligned to the goals and requirements of these family-run businesses.
In this blog post, we discuss how the integration of cultural and business values makes Indians dominate the American hospitality industry.
In the 1970s, a number of migrants purchased rundown and budget-friendly motels in struggling neighborhoods. They created footprints in the hospitality landscape by making these motels successful in a short amount of time through business acumen, hard work, and family labor.
Most of these migrants were from the Gujarati community – Patel. Hence, their legacy is often referred to as the Patel phenomenon. Also, their success made the term Patel motel hugely popular across the country. Indian-origin hoteliers have strengthened their presence and position across different hotel segments since the 1970s.
As highlighted by a recent industry study, hoteliers of Indian origin own over 65.9% of the economy (budget), 56.6% of the midscale, 50.7% of the upscale, 46.8% of the upper upscale, and 40.7% of the luxury hotel segments in the U.S.
The line between business and family almost becomes blurred for most Indian-origin hoteliers. Growing up in a family business experience can be understood by the involvement of children in key operations like front desk duties, housekeeping, and maintenance. Early exposure makes children acquire professional expertise and work ethic while strengthening their bonds with family through shared responsibilities.
At the same time, family members played a crucial role in the decision-making process. Likewise, hoteliers pass down leadership to the next generation, who accelerate business growth by bringing fresh perspectives, leveraging new technologies, and adopting industry best practices.
However, they still honor the values instilled by their parents and grandparents. They formed innovative growth strategies developed on the foundation of trust, unity, and continuity. The seamless integration of family and business values helps Indian-origin hoteliers dominate the hospitality landscape by combating adverse conditions and beating the competition.
The success of Indian-origin hoteliers in the U.S. is rooted in deeply held cultural values. These cultural values influence their personal lives as well as business strategies.
The first-generation hoteliers made rundown motels successful through hard work and family labor. The involvement of the family helped them curb costs and improve quality in an industry where the competition is fierce. At the same time, relationship-focused work ethics accelerated business growth by helping them adopt changes and overcome challenges.
Indian-origin hoteliers believe in the philosophy of “Atithi Devo Bhava” (Guest is God). The age-old Indian tradition means that guest experiences and satisfaction are paramount for them. In addition to creating a welcoming environment, they impress guests by offering personalized services. Hence, it becomes easier for them to accelerate growth by fostering customer loyalty and gaining positive word-of-mouth.
Hoteliers of Indian origin operate as part of a strong community network and a robust support system. They help each other grow by sharing resources, knowledge, and business opportunities. Existing hoteliers encourage entrepreneurs to enter the hotel industry by providing mentorship. At the same time, community support helps new hoteliers scale their businesses and secure funding by overcoming various constraints.
Indian hoteliers differentiate themselves from competitors through frugal spending and smart investing. Most of them accelerate growth by adopting the plowing back of profit strategy. In addition to curbing unnecessary expenses, they reinvest profits for commercial real estate acquisition, renovation, and expansion. The approach helps them sustain long-term growth by making cost-conscious decisions.
The Indian-origin hoteliers formed growth strategies rooted in Indian values, while keeping pace with the changing times, which helped them remain successful in a highly competitive industry.
Indian hoteliers make guests a part of an extended family by adding a personal touch to services. The personalization makes hotels owned by Indians stand out. At the same time, it accelerates their growth by fostering customer loyalty and getting repeat business.
Hands-on involvement of family members is a key characteristic of hotels owned by Indian hoteliers. In addition to playing leadership roles, family members manage crucial operations like front desk, housekeeping, and maintenance. The approach helps hoteliers maintain high-level quality, consistency, and accountability when curbing operational costs.
Most Indian-origin entrepreneurs become hoteliers by acquiring a single property. They accelerate growth by reinvesting profits in acquisition, expansion, and renovation projects. Community support and family involvement help them grow into multiple-property portfolios over a period of time. The value-driven growth strategy helped Indian-origin hoteliers dominate the hospitality sector in the U.S.
AVANA Capital resonates with the cultural and business values of Indian-origin hoteliers in the U.S. Our mission, vision, and operations foster a unique sense of trust and collaboration that perfectly aligns with these hoteliers.
We meet their long-term and short-term financial needs by providing a variety of credit products and solutions – hospitality loans, construction loans, commercial bridge loans, etc. At the same time, we tailor each loan to meet our clients’ unique requirements. We also help reduce the development timeline significantly via early confirmation (Yes or No, never a maybe), faster approvals, and access to decision makers.
Even in this challenging environment, we have access to capital to support hoteliers across the U.S. via our $250 million co-lending construction program with IHG Hotels & Resorts and another $250 million private credit partnership with Oaktree Capital Management L.P.
Hoteliers of Indian origin have been growing their footprints in the U.S. hospitality sector since the 1970s. Their consistent growth is driven by hard work, perseverance as well as cultural values. In addition, they are gaining a competitive advantage by implementing industry best practices and leveraging cutting-edge technologies. AVANA Capital supports their journey and success during the challenging times by offering tailored loans at competitive rates.
Need tailored credit solutions to accelerate your hospitality business growth? Contact AVANA Capital.