Patels in the lodging industry are pretty common by one count, they make up 60 percent of hotel and motel owners of Indian descent here.
Typically, Patels own a Days Inn, Best Western or other motel or budget hotel. Some live there too, with family members pitching in with the business.
But few own anything like the Anaheim Marriott, a 1,033-room hotel next to the Anaheim Convention Center, or the posh Hilton Checkers in downtown Los Angeles.
B.U. Patel does.
He is founder and vice chairman of Newport Beach-based Tarsadia Hotels Inc., which owns 15 hotels nationwide with another nine under construction.
Privately held Tarsadia is one of a handful of Patel-run lodging companies that have grown into the big leagues of hotel owners and operators. Others include New Cumberland, Penn.-based Hersha Hospitality Trust, Stonebridge Cos. of Denver and Georgia’s JHM Hotels Inc.
B.U. Patel and most others with the surname hail from the western Indian state of Gujarat. The Patel name is so common in lodging here that some think it’s an Indian word for “hotel.” (The name actually comes from ancient India for record keepers who used to track crops on a parcel of land, or a pat.)
In more modern times, Patels became part of India’s merchant class. Many spread out to former British colonies in Africa before getting into motels here.
Tarsadia owns about 14 percent of the hotel rooms in and around the Anaheim Resort. The company also owns hotels in San Diego, San Francisco, Las Vegas, Denver and on the East Coast. “When I was a small motel owner, I used to look at big hotels and want to own them one day,” B.U. Patel said.
A deal a month
He started out buying rundown or struggling Anaheim-area motels, turning them around and selling them for a profit. Within a couple of years of buying his first the Dunes Motel near Disneyland in 1976 B.U. Patel sold it and bought his second, the Princess Motel. The deal that catapulted Tarsadia was the 1987 buy of the 225-room Radisson Hotel in San Diego, its first upscale hotel.
For the past five years, Tarsadia has been closing a deal a month, said Greg “Cass” Casserly, chief executive and president, who joined the company in 1998. (Unlike some other Patels in lodging, Tarsadia has opened up the company to non-family members, even non-Indians.)
In 1985, Tarsadia started building its own hotels. In some cases, building made more sense than buying and fixing up hotels, according to B.U. Patel. Now Tarsadia has 1,700 rooms under construction. In San Diego’s Gaslamp Quarter, Tarsadia has a Hard Rock hotel in the works, a $125 million project that calls for an eight-story hotel, condominiums and shops and is set to open next winter.
The company plans more hotels with condos either sold to homeowners or vacationers as timeshares. The projects are less risky because Tarsadia typically gets its money back sooner as the condos sell.
In Anaheim, Tarsadia has plans for a 700-unit hotel with possible timeshares on five acres on Katella Avenue.
Early on, B.U. Patel had the foresight to buy in Orange County’s developing lodging market, said Hitesh Bhakta, a motel owner, real estate attorney and friend of B.U. Patel’s going back to his days in Africa. “He was one of the early members of the community who bought hotels in Huntington Beach and other places in Orange County,” Bhakta said.
B.U. Patel’s tack was simple: buy, upgrade, add rooms or a wing, or even switch from one motel or hotel brand to another. Then sell for a profit.
Tarsadia bought several motels and more hotels on the cheap during the early 1990s recession and later sold them for significant profits. Tushar Patel, B.U. Patel’s eldest son and Tarsadia’s chairman, led much of the buying.
The Patels sold off their last motel in the mid-1990s. These days, a typical Tarsadia room goes for $100 a night, a far cry from the $12 B.U. Patel charged at his first motel.
The company acquired Garden Grove’s Hyatt Regency in 1998 and soon after bought the Anaheim Marriott in early 1999. Tarsadia paid $75 million for the Marriott, which the company plans to hold onto, according to B.U. Patel.
“Most companies are either owners or operators but not both,” said Bruce Baltin, a senior vice president with Los Angeles-based PKF Consulting, which tracks the hotel industry.
Tarsadia still has a strong family flavor. B.U. Patel’s other son, Mayur “Mike” Patel is co-vice chairman along with his father. B.U. Patel is the patriarch of an 80-member extended family, many of whom work at Tarsadia and its hotels. In all, Tarsadia employs about 1,500 workers.
Now 69, B.U. Patel said he decided to take a step back five years ago after years of working 12 hours a day, six days a week. “My sons are doing so well,” he said.
*Purnima Mudnal is a reporter with the Orange County Business Journal.
