Inn owner has an eye on success

There are 56 rooms in the Comfort Inn in Lakeville but, for owner Sunny Bhakta, no room for failure.

Bhakta, 38, has invested in extensive improvements to make the hotel a home-away-from-home for guests; many returning customers she knows by name. She also wants the hotel to serve as a community fixture, and has been active with the local Chamber of Commerce, completing the group's leadership training program and even making an unsuccessful City Council bid.

She hopes her efforts will get her closer to reaching her goal of one day owning an upscale franchise hotel.

Above all, Bhakta is working to make her hotel, on Interstate 35 at the southern edge of the Twin Cities metro area, a success because she doesn't want to let down the relatives who loaned her the money she needed for the down payment.

Such interest-free lending, she said, is common within the extended Bhakta network of family members and friends. It helped her join thousands of immigrants from India who in recent decades have gained ownership of small hotels in the United States.

"Your family is investing in you, so there is no room for failure, period," Bhakta said. "It's not about you, it's about your family. They worked hard, they came with nothing."

Indeed, Bhakta is following in a decades-long tradition. The 9,300 members of the Asian American Hotel Owners Association own 22,000 hotels in the United States, more than 45 percent of the 48,000 such properties, according to Fred Schwartz, president of the Atlanta-based organization.

Indian immigration -- and hotel ownership -- accelerated here in the 1970s, Schwartz said, after Ugandan dictator Idi Amin expelled thousands of Indians in 1972. The U.S. government offered an inducement to those who invested in this country, Schwartz said. Hotels were attractive to the newcomers because, unlike stocks and mutual funds, they are tangible assets and provide a place to live, Schwartz.

Bhakta said she is the first woman in the extended Bhakta family to own and operate a hotel in the Midwest. She bought the Comfort Inn in Lakeville in June 2005 on the recommendation of a friend, without having seen the property first. She said she was ready for a bigger challenge after running a 27-room motel she had bought in Owatonna in 1993, which her relatives now manage.

Bhakta encountered several immediate challenges at the underperforming hotel. Much of the staff left the day she took over. Her husband, who had planned to take a month off from his computer networking job, instead stayed on for six months to help with the transition. Most of the 10 employees she has now have been with her for two years or longer.

Bhakta also began making upgrades to meet Choice Hotels specifications, guest requests and her own standards.

Bhakta is counting on her community-oriented strategy, which includes partnering with local businesses to provide rooms for guests at weddings and other events, to help offset the downturn the hospitality industry is feeling across the country. After two years of double-digit growth, revenues at her hotel fell 10 percent last year, Bhakta said. She projects sales of $800,000 for 2009.

Alliances pay off

On the positive side, Bhakta has forged alliances with Brackett's Crossing County Club and the Chart House restaurant to provide accommodations for guests.

"She is a very good partner when it comes to supplying rooms for guests here," said Sarah Smith-Larkin ,who is in sales and marketing at Brackett's Crossing, which hosts up to 600 people for weddings and other events. "We have heard nothing but good things."

M.J. Henschel, sales manager at the Chart House, said she also has received positive feedback from people she has referred to Bhakta. "I know they're going to be taken care of," Henschel said.

Going into the hotel business was something Bhakta had vowed never to do after growing up and working in a small hotel her parents owned in Arizona. That's exactly what she did, however, when she bought the Owatonna motel.

Now Bhakta has her sights set on acquiring a higher-end brand hotel such as a Marriott.

She recently met with business counselors at the Metropolitan Economic Development Association (MEDA), a Minneapolis nonprofit that provides training, financing, consulting and other assistance to minority-owned and managed companies, to begin putting such plans together.

Bigger plans

Maria Seiler, vice president of diversity at Carlson Hotels Worldwide and a MEDA board member, praised Bhakta's accomplishments and said she can go even further in the industry.

"Her dream is to have a whole portfolio of hotels under her ownership, and I believe she will," Seiler said. "To be a self-made woman and to have achieved this much, that's big. She's an inspiration for many of us.

"If you're going into full-service [hotels], it's a whole new ballgame," Seiler said. "As you want to play in a bigger space, you have to build relationships with other organizations, other people who have connections and may have that infusion of cash to build your business."

This summer, Bhakta will host a conference for as many as 1,000 women in her extended family network, and those who provided financing will be able to see the hotel for themselves.

"It's been a blessing," Bhakta said. "When you have bad days, you think about all the people who invested in you."

The expert says:

Bruce Corrie, business professor and dean of the College of Business and Organizational Leadership at Concordia University in St. Paul, said getting business financing from friends and families is relatively common in minority communities.

Such extended family networks may help soften the effects of the credit crisis and the souring economy, Corrie said.

"That would give you more of a cushioning effect than if you were out on your own," Corrie said.