Travel industry’s struggles amid coronavirus pandemic is a blow for South Asian families with hotel roots

With rooms sitting empty, smaller hotel operators are weighing options to defer debt payments and in some cases, close properties.

While the pain caused by disruptions from the coronavirus pandemic is being felt across the travel industry, it is particularly acute for the Indian diaspora in the U.S. Nearly 50% of U.S. hotels are owned by South Asians, according to the Asian American Hotel Owners Association. Now many in the community have been scrambling to apply for the government’s Paycheck Protection Program loans, with some finding success.

Hotel owner Azim Saju and his team at HDG Hotels applied for 19 separate loans after seeing occupancy levels plunge. All were approved.

Saju received $80,000 in his bank account Tuesday and expects to get the funds for five loans today. He expects to get the full $2.4 million over the course of the next week.

“Our first move is going to be to bring back our people, increase their hours, back to where they were a couple months ago,” said Saju to CNBC’s “The Exchange” on Tuesday.

Saju, who has nearly 500 employees, warns that the PPP funds will only last two to three months. By then, he’s hoping a gradual reopening of the economy will result in fewer vacant rooms. So far, occupancy across 18 of his hotels stands at 25%. 

Saju, along with his brother Navroz, own and operate 18 hotels in Florida, including a Marriott TownePlace Suites in St. Petersburg, Florida, and a Hilton Holiday Inn in Crystal River, Florida. Their nineteenth hotel is under construction.

Azim and his brother Navroz are second-generation hoteliers. Their parents, Nurejehan and Fidali Navroz, emigrated from India in 1972 and started to venture into the U.S. lodging industry by building one hotel, and so on. Azim and Navroz then helped their parents grow HDG Hotels’ portfolio.

When asked how much family pride is attached to his properties, Saju said, “It is part of our culture, part of what our parents have raised us towards as it relates to this business, and my brother and I really believe in that.”

The Saju family story is shared by many South Asians across the nation and is a reminder of the disproportionate impact of the coronavirus on this fast-growing ethnic population in the U.S. 

“Those families have gone from living reasonable, comfortable lives with the ‘American dream’ to pure panic,” said Oam Patel, a principal at Alora Hospitality Group.

Patel and his extended family members own several hotels, including the Clarion Hotel at Carowinds in Fort Mill, South Carolina. He is hoping that a hard work ethic and grit will help him and his peers get through this daunting period.

“The good part is most of the owners that I know, and myself included, have the work ethic and willpower to sit at the front desk and do laundry on our own, if truly needed to stay afloat. Most of the owners who have 10-plus hotels today grew up doing the dirty work,” said Oam Patel.

For Vinay Patel, his nine hotels across Virginia and Maryland represent lineage, ancestry and more importantly, the courage it took his immigrant parents to dive into the hospitality industry nearly 50 years ago.

“When I grew up, hotels were the only thing I knew how to do. After I graduated college, it was a rite of passage.”

Patel has two sons — one 24 years old, the other 19. His older son plans to join his father in running the family business, while the younger son is currently studying hospitality at Virginia Tech.

Vinay Patel was approved for seven different PPP loans this week and expects to receive a total of $700,000 in his account by next Monday. Prior to coronavirus hitting the U.S. lodging market, he had 220 employees across his nine hotels, but is currently running a skeleton staff. Funds will be used towards payroll, utilities and if anything is left, mortgage payments.

With no certainty as to when travel will rebound, Vinay Patel said hotel owners have already shifted their collective focus to addressing liquidity concerns by deferring debt payments and working with the hotel brands to reduce the fees collected.

“Most hoteliers don’t want to take on any more debt … that’s one of my biggest fears,” said Vinay Patel.