From starting with one $350 lease in 1942 to owning tens of thousands of hotels across the United States, Gujarati immigrants have transformed the ubiquitous, modest roadside motels into multigenerational empires, profoundly shaping America’s hospitality industry.
The year was 1942. World War II was raging across continents. In the United States, the attack on Pearl Harbor had triggered fear and suspicion; Japanese Americans were being sent to internment camps under executive order, their homes and businesses abruptly abandoned.
In Yuba City, California, three undocumented Gujaratis—Kanji Manchhu Desai, Nanalal Patel, and D. Lal— formed a loose support network to help unskilled Indian immigrants find work on Punjabi-run farms in the area. The labor was grueling, and the wages were low. Immigration raids were a constant fear.
to resemble the actual Hotel Ford referenced in this article.)
Around this time, a Japanese American, the owner of a run-down lodge, approached Desai with an of- fer: she wanted to lease her property while she was being sent to an internment camp. For Desai, it was a chance to step beyond farm labor and into ownership. He pooled together $350 and agreed to an annual lease of $75. In the fall of 1942, he took over Hotel Ford in Sacramento, making it what is often cited as the first motel owned by an Indian immigrant in the United States.
Running what was then called a “single-occupancy hotel” was no easy task. There were unruly guests, safety concerns, and open racism. Yet the business model proved more promising than farm work. While a job on the farm paid 10-20 cents an hour, the motel generated a steady $10-$20 per week and provided free lodging—an enormous advantage for immigrants with little capital.
Over the years, Desai, an impressive man with a fair command of English and strong leadership skills, became an informal broker and mentor to many newly arrived Gujaratis. His hotel doubled as a sanctuary. He fed newcomers simple meals of khichdi and kadhi, connected them to farm jobs through his associates, and urged them to save $1,500—enough to buy a small motel in California. If they fell short, he lent them the remainder, often without paperwork, interest, or collateral.
to be dubbed (sometimes pejoratively) the “Patel Motel Cartel”—by not only expanding his own holdings in lodging, but by also helping approximately 30 other Patels acquire motels across
California.
San Francisco, Desai played a foundational role in what later came to be dubbed—sometimes pejoratively—the “Patel Motel Cartel.” His two friends also took on key roles in his enterprise. Nanalal Patel developed community-based “handshake loans” that were informal funding mechanisms built on trust. D. Lal continued to place new immigrants in farm jobs and to partner in motel ventures. Together, they created a pathway from farm laborer to small-business owner.
As wartime economic disruptions forced many Japanese, Filipino, French, and Italian owners of small lodgings to sell their properties, Gujarati immigrants stepped in to fill the gap. Within a few years, Desai had not only expanded his own holdings but had also helped approximately 30 other Patels acquire motels across California.
A Quiet Chain Reaction: Evolving into a Nationwide Force in Hospitality
This chain reaction of the Patel community learning the ropes of the motel business from fellow community members and going on to own their modest motels accelerated after the Immigration and Nationality Act of 1965, which removed national-origin quotas and ushered in a new wave of Indian immigrants.
first generation of Gujarati hoteliers in the U.S. arrived with no experience in hotel management. They relied heavily on family labor, lived on-site, worked long hours, and kept costs to a minimum.
Federal policy played a significant role in further shaping this opportunity. The 1956 Interstate Highway Act authorized construction of a 41,000-mile national highway system, spurring demand for roadside lodging. Later, economic downturns, particularly in the early 1980s, forced many American innkeepers to sell distressed properties.
Gujarati families often purchased these struggling motels, lived on-site, and reduced overheads by employing family members. Children answered phones and folded laundry. Parents worked front desks, handled maintenance, and managed books. These thrifty and determined families gradually turned struggling motels into profitable ventures.
Pawan Dhingra, vice president for equity and inclusion at Amherst College and author of Life Behind the Lobby: Indian American Motel Owners and the American Dream, notes that this model—lean, family-driven, and community-financed—became the backbone of the industry’s growth. This extraordinary sacrifice by the first generation not only enabled them to survive but also to thrive and grow gradually. What had begun as a handful of tight-knit, community-based enterprises in California evolved into a nationwide force in the hospitality sector.
From Discrimination to Dominance: The Organization That Changed Everything for Indian American Hoteliers
A major institutional milestone came in 1989 with the founding of the Asian American Hotel Owners Association (AAHOA). Kamalesh Patel, chairman of AAHOA, points out that the organization was formed during a period of overt discrimination. In the 1980s, some franchisors openly discouraged Indian ownership. Insurance companies charged higher premiums. Signs reading “American-owned” appeared outside competing properties.
“Almost four decades later, the progress we have made is remarkable,” Patel says. “Through initiatives like AAHOA Marketplace and AAHOA Lending, we provide access to services and financing that strengthen our members’ businesses.” Today, AAHOA represents nearly 20,000 members who own approximately 36,000 hotels across the country. Its members are estimated to own close to 60% of U.S. hotels.
According to an Oxford Economics analysis commissioned by AAHOA, its members contribute $371.4 billion annually to the U.S. GDP, support 4.1 million jobs, and pay nearly $100 billion in federal, state, and local taxes.
Branching Out into Banking: Creating Synergistic Institutions For Indian Hoteliers
These astounding statistics were made possible by the arrival of a later generation of Patels with a better educational background and a determination to pursue the American dream that many of their community members had already achieved. Chan Patel was one such arrival. Born in a modest family in Mumbai, Chan arrived in the U.S. with $600—his parents’ lifetime savings—to attend Stanford University. After graduating, Chan worked three jobs to support his family, and in 1976, he bought his first hotel, Alamo Plaza, on Fort Worth Avenue, becoming the first Indian in Dallas to own a hotel.
But Chan soon noticed a systemic gap: immigrant hoteliers struggled to access credit. Despite strong cash flow, many lacked formal credit histories. In 1987, he found ed the State Bank of Texas, a financial institution born from immigrant necessity.
Chan’s son, Sushil Patel, now the bank’s president, shares an illuminating backstory about what first inspired his father to enter banking. “Many Gujaratis came to the U.S. encour aged by relatives who had found success in the motel business,” he says. “My father would drive them along highways looking for motels for sale and help them secure their initial financing through a local bank. These newly minted entrepreneurs would then continue their relationship with that bank— opening accounts, applying for car loans, and more.”
Despite these relationships, many of them were unable to qualify for financing on their own. “The bank manager, a family friend, often asked my father to co-sign, even when the borrowers were financially sound,” Sushil recalls. “When my father questioned it, the manager explained that they had no credit history. Most paid in cash and had never used credit cards. Recognizing this cultural and financial gap, my father decid- ed to open a bank that would truly serve this community.”
Today, State Bank of Texas is the largest Indian American–owned bank in the country, with more than $2.8 billion in assets and a book equity value of $400 million. According to Sushil, roughly 95 percent of the bank’s loans are hotel loans, and 70 to 80 percent of its clientele is Indian. The family also owns more than a dozen hotels across New York and Dallas.
From Moteliers to Hoteliers: A Generational Shift
While the first generation’s traditional route of hard work and lean operations was effective at laying the foundations of success in the motel industry, subsequent generations professionalized the business by expanding into franchised properties, boutique hotels, and, eventually, related sectors such as real estate, law, and finance. What began as survival entrepreneurship matured into strategic expansion.
Second- and third-generation hoteliers stepped out of the cocoon of family-run enterprises to gain experience and earn their stripes in corporations running some of the biggest hotel franchises. They took their expanding, yet still mom-and-pop, enterprises to the next level by introducing professional management practices and corporate experience.
Rhea Patel, vice president of Ohio-based AAAR Hotels, a second-generation hotelier, oversees her family’s portfolio of in dependently-owned and branded hotels. Shedding light on the typical journey into motel ownership that is so common among her kind, she shares, “My dad came from Gujar at in 1996. He began working at a relative’s hotel in Atlanta. My mom’s family owned a hotel in Los Angeles, California. After both of them got married, they saved to buy a small, independent hotel in Circleville, Ohio. In 2004, they bought their first branded property—Super 8 by Wyndham. We lived on that property for 16 years, and I grew up watching my parents working nonstop.”
Even though Rhea hadn’t initially planned to join the family business, after graduating with a degree in business marketing, she took a job at the Hyatt Regency in Cincinnati, Ohio. “It was a huge property in the center of downtown and my first experience working in a luxury hotel. I truly enjoyed it.” Rhea then worked at Hotel Covington in Kentucky. She says, “After I gained all these skills, I decided to bring them back to our family business. I joined AAAR in 2023, when we had 10 properties. In two years, we have grown to 15.”
Exposure to corporate hospitality has allowed younger hoteliers to adopt data-driven revenue managment, brand- ing strategies, and diversified portfolios.
Documenting The Motel Legacy on Film
In 2023, Amar Shah and Rahul Rohtagi co-directed the documentary The Patel Motel Story, which premiered at the Tribeca Festival. The film shows delightful slice- of-life stories about how many Patel families began with small, cheaper establishments and soon came to dominate a major American industry.
Shah, who grew up watching his parents run a gas-station shop, recalls a childhood spent tucked behind the candy racks, doing homework and whiling away his after-school hours in the grimy back rooms of a dusty small-town convenience store. Meanwhile, his cousins had similar upbringings, the only difference being that they were raised in Econolodges and Kwality Inns rather than in convenience stores. He saw a world where parents were scaling up motels while also raising their kids there.
Becoming a second-generation retail or motel owner would have been the most predictable path for Shah. However, he is among the few Gujaratis who pursued sports as a career. He has worked as a producer and network executive at ESPN, Fox Sports, and NFL Network.
But despite charting his own trajectory, Shah had a compelling urge to document the inspiring stories of Gujarati hoteliers he had witnessed growing up. On why he thinks the motel business was able to continue as a legacy, he says, “Many who left the family business eventually came back. The scalability and economic resilience of the model were ard to ignore.”
Shielded from Struggle, Steeped in Strength
Alongside the blazing success of Patels in the hotel industry have come mounting challenges. Beyond the early disenfranchisement they faced from hotel brands and insurance companies in the 1980s, the industry row contends with rapid shifts: the rise of Airbnb and short-term rentals has disrupted traditional lodging models, third-party booking platforms squeeze margins, and labor shortages and rising insurance costs add new layers of complexity.
Racist stereotypes persist as well. Social media commentary often unfairly singles out “Indian-owned” hotels for negative guest experiences. Rhea offers a perspective on this dynamic: “Since nearly 60 percent of hotels are owned by our community, statistically, it’s natural that we would also be the target of a higher percentage of customer complaints.” She adds, “That’s unfair, given how much Patels have contributed to this industry.”
Despite these pressures, the pioneering generation made a point of instilling in their children a healthy appreciation for the family business. “While I do recall some episodes of guests being clearly racist toward my parents, for the most part, they shielded us from the everyday trials of running a hotel,” Rhea says. “They never discussed finances or challenges with us, perhaps so we wouldn’t be discouraged.”
Sushil Patel agrees. “That is a key reason for the sustained success of Patels in the motel industry,” he says. “Parents facilitated and encouraged their children to take up the family business, no matter the challenges they faced along the way.”
From Budget to Boutique
Historically, most Patel-owned properties have been in the budget and midscale segments. Practical considerations, such as lower capital requirements, simpler operations, and predictable cash flow, made these categories attractive.
Today, however, the younger hoteliers are exploring luxury and lifestyle segments. With stronger educational backgrounds, corporate exposure, and institutional backing, many see premium hospitality as the next frontier. “The luxury segment may be the next phase,” Rhea says. “We’ve built a strong foundation. Now it’s about diversification and elevation.”
From a wartime lease of $350 to an industry that anchors tens of thousands of American hotels, the Patel story is not merely about business dominance. It is a story of immigrant ingenuity, communal trust, intergenerational sacrifice, and relentless adaptation— an evolving chapter in the broader chronicle of the Indian American experience.
Zofeen Maqsood is a U.S. based journalist who writes extensively on millennial trends and expat issues. She has contributed for the some of the biggest newspapers and websites in India and in the U.S.
Atlanta: A Hub of Indian Hotel Ownership
If the Patel motel story began in California’s farm country, it has found one of its strongest institutional homes in Georgia.
Today, Atlanta is widely regarded as the epicenter of Indian American hotel ownership in the United States. The Asian American Hotel Owners Association (AAHOA), founded in 1989, is headquartered in metro Atlanta. Georgia consistently ranks among the states with the highest concentration of AAHOA members.
Several factors have helped make Atlanta a fertile ground for hotel entrepreneurship:
- Transportation crossroads: Hartsfield-Jackson Atlant International Airport, one of the busiest airports in the world, drives steady hospitali ty demand.
- Convention economy: The Georgia World Congress Center, major sports venues, and corporate headquarters fuel year-round travel.
- Business-friendly climate: Lower property costs in the 1980s and 1990s allowed immigrant investors to acquire and scale properties.
- Community network: Once a few Gujarati families established a foothold, word-of-mouth financing and mentorship accelerated growth.
Many second-generation Patel hoteliers in Georgia grew up living on-site in suburban properties along Interstate 75, I-85, and I-20 corridors. Today, those same families own diversified portfolios that include midscale, extended-stay, and increasingly upscale brands.
In many ways, Georgia reflects the larger arc the Patel phenomenon: from odest roadside motels to profesonally managed hospitality enterprises that anchor one of the tate’s most dynamic immigrant uccess stories.
Initial background research for this sidebar was generated using artificial intelligence. The information was subsequently reviewed, verified, and expanded by Khabar’s editorial team.