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US Based NRI Hoteliers Eyeing Hospitality Industry
Monday, January 18, 2010

The non-resident Indian (NRI) hoteliers from the US are eyeing a share of Indian hospitality industry. An 18-member delegation of Asian American Hotel Owners Association (AAHOA) visited Gujarat, Tamil Nadu and Karnataka to explore the possibilities to commission hotel properties. The delegation spent a week in India and met local policy makers and businessmen.

In view of uproar in Andhra Pradesh, AAHOA delegation had to cancel its visit to Hyderabad. The state tourism ministers and senior bureaucrats of Tamil Nadu and Karnataka made presentations before the delegation on opportunities in hospitality industry in their respective states. In Gujarat, CM Narendra Modi met the delegation in Gandhinagar last week.

AAOHA has membership base of 10,000 hoteliers managing 24,000 properties across the US and dominates American hotel industry. AAHOA claims to have membership base that controls 10 lakh hotel rooms, representing over 50% of the lodging properties and nearly 40% of all hotel properties in the United States. Of the hotels owned by AAHOA members, over two-third are franchisees of big brands like Wyndham, Carlson, Accor, Hilton, Choice and Marriott among others while the rest are independent. AAHOA chairman Tarun Patel said, “It goes without saying that India has managed to sail through the troubled times unlike many countries. In US, it is difficult for hotel industry to manage in the present circumstances and hence our members are interested in opportunities back home.”

He added that American hoteliers are facing challenges in managing credit on account of bad business cycles and conservative approach of the financial institutions. “In our first delegation some three years back, 50 hoteliers and vendors participated. Three delegates after their previous trip have already started four properties in Ahmedabad, Bangalore, Surat and Vadodara,” he said. Over 90% of the AAOHA have Indian roots and majority of them belong to Patel community hailing from Gujarat. Mr Patel, a second generation hotelier and one of the youngest office bearers of AAHOA, is president of Pacific Hospitality Company and Principal in Penta Hospitality that collectively manages 20 properties with 1,500 rooms.

AAHOA, engaged into promoting and protecting its members interests, is one of the most powerful hotelier organisations in USA. Last year, former GE CEO Jack Welch delivered key note address at AAHOA’s annual convention. In June, AAHOA will host its annual meet in Chicago and expects participation of 5,000 hotel owners and other stakeholders. “Majority of us being Gujaratis, Gujarat is naturally first on radar. We drew Gujarat chief minister Modi’s attention towards prevailing floor space index that is a major road block for us. He has committed to look into the matter,” Mr Patel told ET.

 “One cannot build budget hotel on the land purchased at current price levels. It compels the developer to commission five star properties to garner quick and fat returns. However, five star properties do not attract footfall of business travelers in states like Gujarat where people travel more for business and less for leisure on account of prohibition,” said Mr Patel. He stated that NRI hoteliers are open to acquisition instead of starting from scratch. Besides Mr Patel, AAHOA delegation consisted representation from ADM Hotels & Development, J M hotels LLC, Justin Hotels,Plan B Hospitality, Justin Hotels, Vantage Hospitality, Baywood Hotels, JHM Hotels, Davcor LLC, Protect-A-Bed, Dalsom Corp and Imperial Investments.

Meanwhile, AAHOA delegation also visited CZ Patel College of Hotel & Tourism Management of Sardar Patel University in Anand district. AAHOA patronises the college in Gujarat and also offers a two-week certificate course in hospitality. It also offers opportunities to college students for internship and employment in hotel properties in US. AAHOA is hopeful about faster growth of hospitality industry in India and believes that the sector has huge appetite for trained manpower in the country.




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