Business Other News 30 Jan 2019 Huge investment for ...

Huge investment for hospitality sector in Chennai, Bengaluru and Hyderabad

DECCAN CHRONICLE.
Published Jan 30, 2019, 1:42 am IST
Updated Jan 30, 2019, 1:42 am IST
Much of the investments are likely to be in mid-scale chains with multiple properties.
During 2016-2017, investments in to the hospitality sector revived and was recorded at USD 0.68 billion. (Representational image)
 During 2016-2017, investments in to the hospitality sector revived and was recorded at USD 0.68 billion. (Representational image)

Chennai: Chennai, Bengaluru and Hyderabad are among the chief cities which are likely to receive a major investment. Much of the investments are likely to be in mid-scale chains with multiple properties that can eventually be eligible for REIT listings, acquisitions and buy-outs of operational properties as well as follow-up investments in hotel room aggregators.

During 2016-2017, investments in to the hospitality sector revived and was recorded at USD 0.68 billion. “With increased interest from private equity (PE) / venture capital  (VC) players, the sector is likely to witness USD 0.5-0.6 billion annual investment during 2018-2022. The sector is likely to expect an investment of USD 2.8 billion by 2022,” says Gorakh Jhunjhunwala, Managing Director, Meraqi.

 

Most of the investments are likely to be in mid-scale chains with multiple properties, which can eventually be eligible for REIT listings, acquisitions and buy-outs of operational properties as well as follow-up investments in hotel room aggregators. Major investment is likely to be in Bangalore, Chennai & Hyderabad as these cities constitute for almost 65 % of the total demand for additional rooms, Gorakh said.

According to a report released by strategic real estate advisory firm Meraqi, titled as ‘Focus: India Hospitality Industry’, outlines the performance of hospitality sector across major cities, forecasts demand and analyses the impact of disruptive changes in the market dynamics. The report says a total room requirement of 32,400 additional rooms is projected across the top seven cities by 2022. In which 44% will be added in the mid-scale segment and is expected to grow at a CAGR of 12% by 2022.

 

With increased urbanisation and rising affluence, tier II & III cities are expected to witness 19,500 total room additions by 2022, thereby increasing inventory market share from the current 44% to 48%.

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