Bengaluru hotel sector performance declined 59% in RevPAR in YTD July 2020 (Y-o-Y): JLL

“Over the last few years, Bengaluru has evolved into a fundamentally strong hotels market on back of office demand led by IT and Fintech companies. Once life settles around COVID-19, Bengaluru’s hotel market is expected to bounce back, albeit slow...

Bengaluru: Bengaluru has seen the sharpest decline in Revenue Per Available Room (RevPAR) among major Indian cities due to the ongoing COVID-19 pandemic.

According to JLL’s India Hotel Recovery Guide- Bengaluru, released today, as of YTD July 2020, RevPAR declined by 59% but is expected to bottom out in Q4 2020 as the Government gradually eases lockdown restrictions and domestic travel begins to pick up.

“Over the last few years, Bengaluru has evolved into a fundamentally strong hotels market on back of office demand led by IT and Fintech companies. Once life settles around COVID-19, Bengaluru’s hotel market is expected to bounce back, albeit slowly over the next couple of years.,” says Jaideep Dang, Managing Director, Hotels & Hospitality Group (India), JLL


The city was amongst the first key markets to relax lockdown and opened considerably in early July, with only Sundays designated as days of lockdown. However, with an increase in COVID-19 cases in the weeks that followed, a 9-day lockdown from 14 to 22 July was imposed. Though, from August onwards, night curfews and Sunday lockdowns have been lifted.

“The hotels which are linked to office parks could get back to business earlier as compared to the ones with huge banqueting and conferencing facilities. Leisure destinations around Bengaluru such as Coorg, Chikmaglur and Kabini will also likely witness some revenge travel from the city dwellers although this demand could be intermittent,” said Dang.

The hotel transaction market in India in 2019 was very buoyant, with total deal volume reaching a record Rs 5,327.5 crore (USD 762 Million). This included the acquisition of four operational Leela Palace Hotels, a land parcel in Agra, and the “Leela” Brand by Brookfield. These represented the largest proportion of the total transaction volume in 2019 and was also the highest hotel portfolio transaction value in India to date.
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“We do not expect much improvement until atleast domestic travel truly opens up, followed by international travel that accounts for nearly 60% of our business,” Vineet Verma, Executive Director & CEO, Brigade Hospitality.

The Silicon Valley of India is expected to see a greater interest from private equity players, high-net-worth individuals and distressed asset funds as they capitalise on opportunities to invest in hotel assets which would be valued at a discount to their pre-COVID-19 values. However, transactions will likely only occur once travel restrictions are further eased and site visits are facilitated, said JLL.
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