JW Marriott, Ritz Carlton, Shangri-La and Hilton among 22 hotels that will set up shop in Bagalore.
The Garden City’s transformation into India’s Silicon Valley has also seen robust performance by the hospitality sector.
In addition to the existing 7,734 rooms, Bangalore is expected to add another 9,800 rooms in the branded segment in the next five years, says a report by Jones Lang LaSalle.
“In terms of market performance, Bangalore initially numbered among the best-performing hotel markets in India, attracting a number of developers to enter the hospitality space,” said Sudeep Jain, executive vice-president India, Jones Lang LaSalle Hotels.
Bangalore is among the leading commercial hubs in the country owing to the presence of a sizable number of national and international companies. This has, in turn, benefited the lodging industry here.
The city has consistently been among the top performing hospitality markets in India in terms of revenue per available room (RevPAR). However, it bowed down to pressure during the economic crisis in 2009-10 when RevPAR across the market saw a decline.
At its peak, average room rates (ARR) touched `12,000 in 2008-09 before crashing by over 30% during the recession. Marking a recovery, the ARR have shot up by 7% during 2010-11 to `8,700.
“With the stabilisation of domestic and global economies, the market recovered in 2010-11. We expect Bangalore to maintain its position as one of the most dynamic and promising hospitality markets in the future as well,” said Jain.
With occupancy levels creeping back up to their pre-recession levels, at 65%, an additional 22 hotels are expected to launch in the branded segment over the next few years. Among the prominent names making their entry into the Bangalore market are JW Marriott, Ritz Carlton, Shangri-La and the Hilton.
The hospitality sector in Bangalore is dominated by five-star hotels, contributing to 33% of the total inventory, 15% being five-star deluxe hotels; four-star hotels contributed to 21% of the total capacity and 3 star hotels contributed 24%, according to the report. How the sudden burst of supply would affect performance of Bangalore’s healthy hospitality industry remains to be seen. For the moment, however, hoteliers are optimistic that there is enough room for all players in the market to create a niche for themselves.
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