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Hotel Companies High On Bangalore

Rajesh Naidu, The Times of India

November 07, 2011

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In the past few years, Bangalore has emerged as the most preferred city by hotel companies for expansion. Hospitality majors such as Indian Hotels Company (IHC), East India Hotels (EIH) and Hotel Leela Venture have all announced plans to expand in Bangalore.

While IHC recently launched its third Vivanta By Taj property in the city, East India Hotels (EIH) a few months ago announced its plan to develop a property in collaboration with Reliance Industries, which holds close to 15% stake in the company.

Hotel Leela Venture too has plans to use its two acres beside its existing property Leela Palace to develop premium real estate buildings. In addition to these large players, smaller hotel companies such as Royal Orchid Hotels continue to benefit from their strong presence in Bangalore.

Royal Orchid currently has five properties in Bangalore. According to industry experts, hotel companies are looking to enhance presence in Bangalore because of the rising preference for the city by leisure and business travellers.

The city’s pleasant weather and metropolitan culture, as opposed to larger metros like Mumbai, which is over-crowded and relatively expensive to reside, have worked in its favour. Also, in addition to being an IT hub, the city houses many business houses, which provide immense employment opportunities. Rising preference for Bangalore among people has also attracted many real estate players to develop residential properties. In the first half of the current fiscal, the IT city saw an increase of over 8% in revenue per available room, a financial parameter that takes into account the occupancy rates and average room revenues of a hotel company. In the same period, the average occupancy rate in the city also grew to 64% from 60% in the first half of the previous fiscal. This is far better than major cities such as Delhi, Mumbai (North and South), Kolkata, Hyderabad, Goa, Jaipur and Pune, which showed slight or no improvement in occupancy rates and revenue per available room rates.

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