Sunday, May 26, 2024

Patels build Sree Hotels into a large Southeast hotel chain

Interstate 95 was just opening in the flatlands of eastern South Carolina, and gas at the local Gulf station was $1.05 a gallon. Florence, like many cities, was still struggling with public school integration when friends Ravi and Chandra Patel showed up to buy a small roadside hotel in 1980.

“Go back where you came from,” they were told. Competitors slapped “American owned” signs in their windows. “There was a lot of discrimination against Indian-Americans,” nephew Vinay Patel says. They were undaunted.

“Hoteliers like Charlotte’s Patel family had to overcome discrimination, sometimes in banking, sometimes in insurance, and sometimes even in their own communities,” adds Cecil Staton, CEO of the 19,500-member, Atlanta-based Asian American Hotel Owners Association. “That,” adds the former chancellor of East Carolina University, “is an unfortunate part of their story.”

Forty years later, Ravi and Chandra Patel, now in their 70s, head Charlotte-based Sree Hotels, one of the Southeast’s largest hotel chains, as chairman and vice chairman. Sree’s more than two dozen Carolinas and Ohio hotels include mainstays of select or limited-service brands such as SpringHill Suites, Courtyard by Marriott, Marriott Residence Inn, Fairfield Inn and Aloft.

Among current ventures, Sree has more than $40 million in hotels under design in the Triangle for more than 200 rooms slated to operate as SpringHill Suites and TownPlace Suites franchises.

Like everyone in the hospitality industry, Sree has been slammed by the novel coronavirus pandemic since February. Vacancy rates in the state’s 154,000-room lodging industry soared as high as 90% because of stay-at-home orders. Like others, Sree responded by shutting down entire floors to consolidate resources and reducing staffing to minimum levels, hoping to preserve as many of its 800 jobs as possible.

Sree is pushing ahead on its two newest projects despite the collapsed economy, reflecting the company’s staying power. “Construction at the Courtyard by Marriott in Cincinnati is ongoing, and the permitting progress is still underway in Raleigh,” Vinay says.

Sree’s growth from a rundown roadside motel to a major Southeast lodging developer combines business, ethnic and cultural forces. Indian-Americans own more than half of North Carolina’s 1,768 hotels, according to the Raleigh-based N.C. Restaurant and Lodging Association and other sources, and as many as 80% of independent motels, mostly in small towns. Before the pandemic, lodging and restaurants contributed $10 billion annually to the state economy, the association says.

Other big Indian-American lodging companies in North Carolina include Greensboro-based CN Hotels, with about 30 properties in the Southeast, and Parks Hospitality Group of Raleigh, headed by Shaunak Patel, with more than 1,200 rooms in the Carolinas and Tennessee.

The role of Indian-Americans in the industry has changed dramatically since Ravi, a chemical engineering graduate of Auburn University, co-founded Sree. Many early peers lived in aging motels bought on shoestring budgets, with the aroma of curry powder and turmeric often greeting guests.

“You had a lot of owners living behind the desk or above the desk,” says Vinay. “They’d convert a couple of rooms into an apartment for the family. Ravi and Chandra didn’t do that, but some other family members that are part of the business did. One investment was able to put a roof over your head, get a source of income and secure jobs for family members. That, at the grassroots level, is how it all started.”

Over time, Sree expanded into other Southeast markets, built its first new motel — a Comfort Inn in Florence — and in the mid-1990s, struck up partnerships with Hilton and Marriott.

Five years ago, Sree undertook a $30 million renovation of the 100-year-old Cincinnati Enquirer newspaper building. The move helped accelerate a downtown revival in Ohio’s third-biggest city, says Cincinnati Convention and Visitors Bureau spokeswoman Jenell Watson.
“They’ve been really successful, and we’ve now got quite a boom in the boutique hotel scene,” she says. The Enquirer project consists of what Vinay Patel calls “stacked” Hampton Inn and Homewood Suites hotels, totaling about 150 rooms.

Sree later bought another historic building, the Cincinnatian, and converted it to a 146-room boutique hotel under Hilton’s Curio Collection brand.

Patel is one of India’s most common names, with the Sree family’s links mainly to the western Indian state of Gujarat. Patel in Hindi generally means landowner, he says, but it has morphed into more than that. “It’s a culture of hospitality, so getting into the hotel business is a natural.”

Vinay, 51, an equity owner and director of external affairs, grew up in the Pacific island of Fiji, as did his father and siblings. “Initially they were in the grocery business, then they moved into lumber and hardware,” he says.

Vinay and his family moved to Charlotte in 1985, half a decade after his uncles started the family business. He attended Charlotte Country Day School before graduating from UNC Chapel Hill in 1992. He worked for other hotel franchises until 2001. “Then the family called and said, ‘It’s time to come home.’”

[/media-credit] Sree Hotels opened a 195-room Spring Hill Suites hotel in downtown Charlotte in 2017. It owns other hotels in the Carolinas and Ohio.

Sree has about a dozen hotels in and around Charlotte, including several downtown properties. “There’s an entrepreneurial drive in many of these immigrant families that’s reminiscent of our country’s whole history,” Staton says. “And they have learned to take advantage of our robust franchise system.”

Says Vinay, “At the end of the day, the entrepreneurial spirit is what drove Sree for Ravi and Chandra. The idea of, rather than working for somebody else, why not work for myself.”

The Indian-American expansion into U.S. lodging had a mixed impact on their native nation, he says. “In the ‘60s, when Ravi and Chandra moved to the United States, there was a brain drain in India when CEOs were not available, because they’d all moved here,” he says. “Indian companies have become a lot more successful now, but many of the folks at first left because they didn’t think there were opportunities available there.”

Ravi and Chandra moved into non-executive roles several years ago, handing the reins to a new generation and some non-family managers. Eight of Sree’s top 11 executives are Patels.

“When I speak to business groups, I tell them that this is one business that’s a true example of upward mobility,” Vinay says. “It’s the work ethic that counts, and it gets in your blood.”

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