In conversation with the founding chairman of AAHOA and hotelier H.P. Rama.
Born in Africa and raised in a small town in the Indian state of Gujarat, Rama first set foot in the U.S. when he came here to pursue his MBA in 1969. “After completing my MBA, the first job I did was as a waiter in a restaurant,” he says of his first foray into the hospitality industry—a position at a Howard Johnson in Manhattan. “I never planned to be a waiter, but I did that to understand the culture and increase my communication skills.”
While he did not plan to work as a waiter or even work at all in the hospitality sector, it was the words of his grandfather that set fortune into motion. “My grandfather challenged me, saying, ‘You were not sent to study to work as a waiter,’” Rama says. “Not realizing what I was saying, I wrote back to him that I was not working as a waiter, but I was preparing myself to hire many waiters.”
(Left to right) J. P. Rama, Laxmi Rama, Gita Rama, H. P. Rama
With nothing more than two dollars in his pocket and dreams in his eyes, Hasmukh P. “H.P.” Rama’s journey toward the coveted American Dream sounds unreal. I had the opportunity to sit down with Rama as he spoke about what it took to convert those modest two dollars into a multi-million dollar company, what lies ahead as the second generation of the family takes the lead, and how he turned racist stereotypes surrounding Asian hoteliers into one of the major forces of the lodging industry.
TownePlace Suites North Charleston, SC
Delta Orlando Lake Buena Vista, FL
Residence Inn & SpringHill Suites Greenville, SC
At that point he had no idea what the future would hold. He was just trying to appease his grandfather, but it turned out to be prophetic. “Thirteen years later,” Rama says, “I was able to buy four Howard Johnsons, the same chain of restaurants where I worked as a waiter. So, yes,” he admits, “I am an ‘accidental hotelier’ who did not even know how to make a bed!”
Forty-seven years ago, Rama knew nothing of the hospitality industry. “I had to learn everything,” he says. “I requested the seller of my first hotel to help me learn how to run a hotel. That was in 1973, in California.”
To remind him of his modest beginnings and where he comes from, Rama always carries two dollars in his pocket. “This is a constant reminder of what it takes to be successful,” he says. “What happens in life is that when you forget where you come from, you start degrading yourself. So each one of us is in pursuit of happiness and realizing the happiness in life.”
Delta Orlando Lake Buena Vista, FL
Hyatt Regency Greenville, SC
North Charleston Marriott, SC
Delta Orlando Lake Buena Vista, FL
When Rama bought his first hotel, he only had $8,000 in hand that he saved from his job as a staff accountant in New York. He had to borrow money for the cash down payment. “I had to borrow $22,000 from friends and relatives,” he says. “This is how I started my journey of realizing the American Dream.”
Rama then invited his brothers J.P., M.P., R.P., and the late D.P. Rama to join him in the business. Although the JHM Hotels brand is now retired, over the years it bought or built more than 100 hotels. “Currently we have 45 hotels and 3,000 people working with major brands: Marriott, Hyatt, Hilton,” Rama says. “So you can see, the journey has been a slow one with a commitment to be successful in life.”
It’s not just about skin color. Rama talks about how the different American and Indian value systems made him realize the stereotypes that had developed over time regarding Asian hoteliers. “When I went to buy the first motel, I went without a car,” he says. “The guy who was selling the motel was skeptical. How would a guy without a car buy a motel?” Rama had to understand the value system in which the American industry was working.
“The lender for a motel wanted to look at my finance sheet, which I did not have,” he says. “I did not have the net worth, and I realized I had to give him confidence and trust before he would give me money.” Rama also faced discrimination when a motel owner backed out of a sale, despite a legitimate contract, once the seller found out that Rama was Indian. “I was hurt,” he says, “but I understood his position. He was not comfortable selling me the motel because he did not know better. But after two years, the same owner sold me the motel at one-third of the price because I chose not to litigate him. He understood that I was acting with goodwill.” Rama adds, “Who says that discrimination doesn’t come at a price?”
To remind him of his modest beginnings, Rama always carries two dollars in his pocket.
More widespread and in-your-face discrimination was happening in the form of billboards, marquees, and Yellow Pages ads. Hotels were advertising themselves as “American owned and operated,” and Rama quickly realized that such a thing could put him out of business. “I felt the urge to do something about it,” he says, “and I embarked on an effort to remove these stereotypes.” In 1989, he and a group of hoteliers, along with U.S. industry leaders like Mike Leven, founded the Asian American Hotel Owners Association (AAHOA) with Rama as founding chairman. “Today we have 16,000 hotel owners members controlling $60,000 billion worth of business,” he says.
“The way we fought this discrimination was by making [our adversaries] into allies,” Rama says. “My approach was to try to win them over. It required tenacity, courage, being progressive, and to keep moving forward.”
A NATURAL LEADER
AAHOA is a major force and created an ecosystem for lenders, vendors, franchise owners, and franchisees to recognize Asian hoteliers. “Maybe Indians are accidental hoteliers,” Rama says, “but they are genuine. They are here to stay, so figure out how they do business.” And eventually it happened. “We had skeptics within our own membership,” he says, “and outside the industry too, but we persisted.” To make this an all-inclusive association, AAHOA reached out to the executive directors from each state of The American Hotel & Motel Association. “We invited them to come and speak and create membership for their hotels’ state association, as we both had a different mission. They had a larger mission of protecting and preserving the American hotel industry against regulations and laws, and ours was strictly removing stereotypes. We were educating people, saying hey, we are genuine businessmen.”
In fact, there was an FBI investigation conducted on AAHOA in the 1990s. “They were wondering how these Patels were buying so many hotels,” Rama says. “So they did the investigation. They thought, this is a money laundering scheme. But of course it was not. They did not find anything.”
Rama was the first foreigner elected as the chairman of the American Hotel & Lodging Association (AHLA.) “I chose to become the chairman,” he says, “because I wanted to build a bridge among the American and Asian hoteliers in America.” This paved the way for him to interact with students as the AHLA chairman and led to a prestigious teaching position as executive professor in residence at Cornell University Hotel School. And in 2011 he and his brothers founded the Auro University in Surat, India, to give back to his home country. So far, Rama says he has interacted with more than 16,000 students across the U.S. and India.
(Left to right) Auro Hotels executive J. P. Rama; Sarona Holdings executive R. P. Rama; Auro Hotels executive H. P. Rama; and Sima Hotels principal M. P. Rama.
The Rama brothers have eight children in all. All the children in the family go through the same experience before joining the family business: They are sent to boarding school in India for three to five years, for an immersive introduction to Indian culture so that they understand where they come from. Upon returning to the U.S. they graduate from high school and choose their own educational pursuit. After earning a degree, they may go to work for any company. Then, after a minimum of two years of outside employment, they are allowed to join the family business if they so choose.
THE WAY FORWARD
Adopting a modern outlook on how family businesses should run, a decision was taken in November last year to retire the name JHM Hotels and transition to four new entities. “Now each family member has freedom,” Rama says about this decision. “Also, they will be able to grow with their objective and business plan. My way was my way, but the next generation has their own way. So we created a new opportunity for them.”
The decision to split was systematic. “This was phased in a progressive movement to create a platform for [the second generation,]” Rama says. “So we had two motivating factors: how we create a succession plan for the second generation and also an estate plan.” Because each member of a family has their own unique circumstance, whether they are single or married or have children or not, it was important to the Ramas that a good succession plan be in place. “We wanted everyone to have the freedom to do what they want to do,” he says.
I wanted to build a bridge among the American and Asian hoteliers.
Secondly, the family heads assigned a value to each property. “I asked my brothers to choose which property they are comfortable with,” Rama says. “And we consolidated the ownership. This helped the second generation to make their own decisions about that property and also gives them confidence when they approach lenders.”
With the simple philosophy of treating “business as business, family as family,” Rama says making this decision was easy. “Of course,” he admits, “there was a lot of emotionality, but we have to rise above it.”
The four new entities
- Auro Hotels, www.aurohotels.com Based in Greenville, SC
- Sima Hotels, LLC Based in Orlando, FL
- Sarona Holdings, saronaholdings.com Based in Orlando, FL
- Siddhi Hotel Group, siddhihotelgroup.com Based in Greenville, SC
“When I wanted to buy a motel, I needed money, and as per our social and Indian structure we don’t buy things unless we have the money. We have this understanding and expectation that, if you borrow money, it means you are broke. But in America you borrow money to grow—no one thinks you are broke. The Indian value system is, let’s not get ahead of our luxuries until we can afford it. But in the U.S. we can borrow money to buy a car or a house. Everything is on credit. In order to establish credit, you have to borrow. Think about that.”
By Dhwani Pathak Dave