Originally created 07/18/04

Indian-owned hotels provide work, careers, investments



Harinderjit Singh's plan to build a Holiday Inn off Belair Road is as much a success story behind the scenes as it is on the surface.

The roughly $8 million investment is an ambitious undertaking, especially when considering that the five-story structure will be Augusta's first full-service hotel built since Radisson Riverfront Hotel Augusta in 1992.

Beneath the bricks and mortar soon to be set in place, however, the hotel construction tells of an age-old immigrant's tale in which extended families and community members work together to cash in on the American dream.

Mr. Singh is the embodiment of Indian hoteliers who have made it.

Today, almost four out of every 10 hotels in the country belong to business people either born in India or of Indian descent. The percentage is even higher in Augusta. Nationwide, their holdings are worth $38 billion, according to the Atlanta-based Asian American Hotel Owners Association.

Like Greek and Korean immigrants known for their diners and grocery stores, newcomers from India - many of them from the state of Gujarat - looked for businesses to make their mark and accommodate their cultural needs, such as staying close to family. They bought struggling discount motels and moved on site to live and work with relatives, allowing them to be together and cut overhead that normally would have gone to hire a staff.

Over the past few decades, the ethnic group - just 5 percent of America's population - has evolved from owning low-budget lodgings such as Super 8s and Motel 6s to upscale Embassy Suites and Holiday Inns that offer room service, a concierge and an all-day restaurant.

Aside from buying or building hotels - this will be his third - Mr. Singh makes a good living doubling as Dr. Singh during his day job, in which he's a renowned retina specialist. He began investing in hotels almost 20 years ago, partly because he saw it as a solid investment and partly to employ his brother Surinder, who works as the hands-on partner managing their other properties, a Wingate Inn and a Hampton Inn.

"It's very important that my brother works alongside me. I need someone I can trust," Dr. Singh said, explaining that he urged Surinder to come to Augusta in 1985 from Toronto, where he worked as an electronics engineer. "We wanted the family to be together, and he was looking for a change. This was a good business for all of us."

Other Indian doctors have had the same idea, taking stakes in area hotels and even Indian restaurants as silent partners and "angel investors" who provide financial backing.

Dr. A.K. Gulati, for one, co-owns five hotels around Augusta. The doctor of cellular biology and anatomy at the Medical College of Georgia says he and other Indians see property investments "as something real and likely to appreciate" in value compared with the high-risk stakes of playing the stock market.

Dr. Gulati has teamed up with other Indian doctors and with entrepreneurs in the community, most recently to build two hotels - the Microtel Inn & Suites off River Watch Parkway and the Best Suites Motel off Belair Road.

The tight ties between the doctors and hotel owners make sense in a vibrant medical community such as Augusta. Doctors of Indian descent make up between 5 and 10 percent of physicians across the country, recent figures show, and the relationship is in many ways a perfect pairing of interests, says hotel owner Yogesh Sethi.

The doctors have deep pockets and generally won't get turned down for a bank loan, he said. The investments also allow them to diversify and, as in Dr. Singh's case, bring in family members to work the counters and run the business.

"They provide the financial muscle and we the operational muscle. We all know each other. It's win-win for all of us," said Mr. Sethi, whose partner is Ravinder Jerath, a doctor of obstetrics and gynecology.

The Jerath family has owned hotels since the early 1980s, including downtown's Courtesy Motel on 15th Street, one of the first built and owned by Indians in the area. Dr. Jerath's father, a retired doctor from MCG, joined with his three sons to start the family's hotel ventures, which today include four area properties. Far from the need for money, the decision to get into hotels was in large part to find a profession for the youngest son, Rajinder, who dropped out of medical school at MCG and was looking for a job.

"We looked around for a promising way of making a living for me, and we did a lot of research and this is what we arrived at," Rajinder Jerath said. "We borrowed about $150,000 from family members and qualified for a $500,000 loan and started construction. At the time, you could count the number of hotels in the area on one hand. Things have changed."

Of the approximately 70 hotels and motels in Richmond and Columbia counties, Indians own about 50. Barry White, the executive director of the Augusta Metropolitan Convention and Visitors Bureau, said the area has averaged three to four hotels a year since the late 1990s, most of them owned by Indians.

"Some of their stories are amazing. They came in and turned around troubled hotels. Built new ones," said Mr. White, whose bureau promotes the city to tourists and visitor groups. "The typical one is a limited-service (budget) lodging in a trafficked area like Washington Road or near Fort Gordon."

The growth of Indian-owned discount hotels and motels, which comes to about half the budget lodgings in the country, became known as the "Patel-motel" phenomenon because many operators carried the last name Patel.

The name originates from the state of Gujarat, northwest of Bombay, and stems from the Hindi word pat, or parcel of land. In ancient India, Patels were record-keepers responsible for tracking crop growth. They adopted their vocational names much the same way many millers centuries ago took on the last name Miller.

The bulk of Indian hotel owners in the country today either come from Gujarat or are descendants of that state. Some lived in central African countries such as Uganda and Kenya for generations and fled in the 1960s and 1970s after independence movements threatened their business interests.

While the Singhs are from a different state in India - Punjab in the north - the goal of the Gujaratis is the same: to make a transition into upscale hotels like the one Mr. Singh is building.

His Holiday Inn will be a prototype design for the franchise and the first in the state outside of Atlanta. The amenities and quality furnishings will cost him about double what he pays to build the midtier hotels he owns. He is shelling out in the neighborhood of $80,000 a room, which takes into account the costs of buying the property, garnering permits and paying for construction.

Fred Schwartz, the president of the Asian American Hotel Owners Association, said other Indians are well on their way to following the Singhs into the higher-end hotel. The second generation already is raising the bar on performance standards, he said.

"The first group didn't have a hospitality background and were more owner-operator types," Mr. Schwartz said. "Their children are now getting degrees in the field from top programs and marrying the work ethic they grew up with alongside an academic background."

M.P. Rama, the owner of the Hampton Inn on Washington Road, is in the process of passing the torch to his son Vinay, a recent graduate of the hotel hospitality school at Cornell University. His JHM Hotels group, out of Greenville, S.C., owns more than 30 properties - many of them full-service - across nine states, and Mr. Rama is now grooming Vinay to help run the holding company.

"The young generation is expanding the horizons," said Mr. Rama, who once went by the surname Patel but began using Rama to honor his late grandfather. "Many of their parents owned 40-to-50 room properties. They want bigger and better things. They want full-service, national franchises."

As a pioneer of Indian hotels in the area, J.K. Patel said the hand-off of his North Point Hospitality group and its $50 million in property assets to his son Jay will only ensure that better hotels are built and bought.

Mr. Patel started with a high-class hotel when he bought Aiken's Ramada Inn a quarter-century ago, and he kept moving up from there. Since 1979, he has built 25 hotels and graduated up to running premier properties in Atlanta, where he is headquartered. His latest project is a 220-room Spring Hill Suites, a Marriott brand, in the swanky Buckhead section of the city.

"When we came to the U.S., we didn't know anything about the hotel business except for that it was a good business to get into," Mr. Patel said. "My son has a business degree. He has lived the business with us. That means he is in a good position to take it forward and do an even better job."

Reach Matthew Mogul at (706) 823-3352 or matthew.mogul@augustachronicle.com.