Patel Motel Dominance

A story about how Ugandan Patels, forced out by dictator Idi Amin, came to America as refugees and built a motel empire through family cooperation and frugal business practices.

"In the early seventies, a dictator came to power in Uganda - Idi Amin. He noticed that in Uganda most of the businesses were controlled by East Asians - Indians, Patels. They controlled about 80% of the economy. These Patels had come to Uganda, brought there about 100 years ago to work on the railroad almost as slaves. But because they're natural entrepreneurs, they went from railroad builders to eventually owning and controlling the whole economy.

Idi Amin was pissed. He said 'Africa is for Africans' and these Patels weren't Africans. These Patels had been in Uganda for 3 or 4 generations - that was their home, they were Ugandan citizens, born and raised. He nationalized all their businesses and threw them out of the country. He confiscated all their assets - businesses, homes, everything - and told them they had 90 days to leave.

The United States took some Patels as refugees. A few thousand came to America in the early 70s. They didn't have skills where they could get great jobs. They realized if they buy a really small motel - 10, 12, 14 rooms - the family could live in 1 or 2 rooms. Motels are labor intensive - the family could do all the work: cooking, cleaning, front desk, laundry.

They would buy these motels and fire all the staff and move into 2 of the rooms. Because they had no costs, they were able to charge nightly rates lower than all the neighboring motels. The Patel-owned motel would run at 100% occupancy - other motels couldn't match that rate because they'd lose money with their staff and workers comp costs.

The Patels are very frugal. As their nephew came of age, they would help him buy his own motel. Then the next one, then the next one. You run this for 50 years and you end up with 70% of the motels in the country under Patel ownership. They've actually gone upmarket now - a lot of the Hiltons, Marriotts, Westins, if you look, you'll find it's under Patel ownership."