Hospitality M&A deals to exceed $ 800 million in 2020: HVS

Hospitality consultancy firm HVS expects mergers and acquisitions in the hospitality space to exceed $ 800 million in 2020, besides a revenue per available room growth in the range of 4.7%-5.4%.

HVS India Hospitality Industry Overview 2019, the company states the hospitality sector witnessed an over 31% growth in brand signings during the year with approximately 171 new hotels entering the branded hotel market and an additional 53 being rebranded.

“2019 was a remarkable year for hotel transactions which witnessed transactions worth Rs 4937 crore compared to just over Rs 535 crore in the previous year

HVS expects the first half of 2020 to be relatively muted, led by the Coronavirus impact on the global markets and ongoing economic headwinds that are expected to last until March 2020.

As per the HVS report, the India wide revenue per available room grew by just over 4% in 2019. The 2019 revenue per available room at Rs 3967 is still lagging the peak by 27.8%.

Average rates grew by approximately 2.9% in 2019 while the occupancy rate was 66.2% in 2019 vis a vis 65.4% in 2018.

HVS stated that domestic brands with their aggressive growth strategies have overtaken international brands in terms of brand signings for 2019. Though, they continue to sign smaller format hotels with average keys for domestic brand signings being almost half of their international peers.

As per the HVS report, IHCL, The Fern Hotels & Resorts, Clarks Inn, Intellistay Hotels and Marriott International were the top five operators in 2019 in terms of brand signings by properties.

Goa and Bengaluru remained the top markets for brand signings. Increasing supply poses a concern for the Goa hotel market performance in the near future, as per the report.