The hotel industry in the United States is already very mature, with a chain rate of about 73%.
However, surprisingly, around 60% of hotels in the U.S. are actually controlled by Indians.
So, how did these Indians achieve such remarkable success?
What gives them the ability to occupy such a large share of the U.S. hotel industry? And what lessons can we learn from this phenomenon?
To answer these questions, we need to trace back through a history of immigration.
However, before doing so, let's first take a look at some typical characteristics of market share in the U.S.
The U.S. is a typical immigrant country. When a group of immigrants arrives in the U.S., they often concentrate in a specific industry and form a monopoly within that industry.
For example, in New York, Koreans dominate the operation of delicatessens and grocery stores;
Chinese control the laundromat market;
And Sikhs (mainly from India and Bangladesh) and Pakistanis occupy a large portion of the taxi market.
In Chicago, early Irish immigrants mostly became police officers, while Polish immigrants often worked as nannies.
This phenomenon is also observed in other countries. For instance, in China, most Lanzhou noodle shops are run by a specific ethnic group;
Sichuan restaurants are usually owned by people from Sichuan;
Those engaged in the real estate industry mostly come from Guangdong;
And those running small commodity businesses primarily come from the Jiangsu and Zhejiang regions.
The reason why the same ethnic group tends to concentrate in a particular industry is not hard to understand.
When one member of the group succeeds in an industry, they often encourage others from the same group to join that industry.
Seeing successful examples, other members of the group also follow suit.
Indians, too, took advantage of such opportunities and successfully dominated the U.S. hotel industry.
But why did they choose the hotel industry?
The Patels are a group from the Indian state of Gujarat, and their name "Patel" means "landlord" in Hindi.
Gujarat is located at the border of India and Pakistan, facing the Arabian Sea. This unique geographical position made the region an ideal location for trade between India and neighboring countries.
Local residents have been engaged in trade for generations and are skilled at doing business.
However, as land became increasingly divided, farming became unsustainable.
In the late 19th to early 20th century, many Patels migrated to Uganda in East Africa to engage in trade and work as railway contractors.
However, in 1972, a coup occurred in Uganda, and the new leader, Amin, expelled non-African groups and confiscated their properties.
About 70,000 Patels were forced to leave Uganda. Some returned to India, while others migrated to the UK, Canada, and the U.S.
Those who migrated to the U.S. inherited their ancestors' business acumen and seized the opportunities in the hotel industry.
After World War II, the U.S. economy rapidly developed, and cars became popular, leading to large-scale suburban development and the construction of the interstate highway system.
Due to the underdevelopment of rail passenger transport, most long-distance travelers chose to drive, giving rise to family-run motels, which quickly spread nationwide.
However, by the 1970s, with soaring oil prices and economic recession, the number of long-distance travelers sharply decreased, causing many motels to struggle with low occupancy rates, leading to their sale at low prices.
It was in this context that the Patels seized the opportunity and began to acquire these low-priced motels on a large scale.
The success of the Patels was not only due to their low-cost acquisitions but also to their hard work and frugality.
They involved family members in the daily operation of the motels, reducing staff costs and lowering operating expenses.
Additionally, the Patels attracted customers with low room rates while maintaining a high-profit margin.
Moreover, U.S. immigration laws at the time allowed for permanent residency applications with a certain level of investment, further encouraging the Patels to invest in motels.
As more Patels entered the motel industry, competition became fierce, leading many to join chain brands for the training and support offered by these brands.
This accelerated the chain-ification of motels.
By 1987, the chain rate of motels had reached 64%.
As the market further developed, customer demands diversified, and traditional motels began to transform into boutique hotels.
These hotels not only provided basic accommodation services but also attracted different types of guests through themed designs and leisure facilities.
The success story of the Patels teaches us several key points: First, cost control and frugality are crucial to business success;
Second, real opportunities often arise during the industry's downturns;
Finally, as times change, market demands continuously evolve, and only by maintaining keen market insight can new opportunities be seized.
Furthermore, the success of the Patels also benefited from the early establishment of their industry association—the Asian American Hotel Owners Association (AAHOA).
This association not only protected its members' interests but also helped them maintain an advantage in a competitive market.
Perhaps we also need to establish similar associations to reduce disordered competition and safeguard the overall interests of the industry.
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