While India’s biggest draw for travelers in the form of the Commonwealth Games in Delhi is heading for what appears to be a complete disaster, elsewhere around the country the hospitality industry is looking extremely upbeat. In private equity as well as M&A circles, the $357 million worth of deals that took place this year alone indicates hospitality investments are heating up.

A recent post published by VC Circle.com announced VC Hunt’s investment in a hotel chain through a 27% acquisition valued at around 32 crores. Quoting the article:

Gautam Seengal, Managing Partner, VC Hunt, told VCCircle, “There is good potential in the Indian hospitality industry. As India is a hot destination for both tourism as well as business, there is a continuous flow of visitors, which keeps the hotel industry a better destination for investments.” Seengal is also the Managing Partner for private equity fund Acumen Capital, which has invested in VC Hunt.

While the rise of both business and tourism visitors to the country is creating a demand for additional room capacity across numerous cities and destinations within India, investments in new hotel properties isn’t the only opportunity we at CFA India have been upbeat about. There is a significant opportunity for acquisition, upgrading, renovating and re-branding existing hospitality properties and chains to meet the need for the up-market clientele. The demand increase for luxury or even higher end budget hotel rooms can be met by strategically buying out existing properties and smaller groups which are falling behind in terms of quality of infrastructure and service with the objective of overhauling them to suit today’s requirements. With some capital as well as offering restructuring, perhaps some capital injection and re-branding, these properties can be turned into highly profitable businesses.

The answer to the growing demand for quality hospitality properties may just come from existing rooms which could benefit from new ownership or investors. With the right opportunities spotted at the right time, careful valuation of these individual properties or chains and the right deals put together, there is a clear underlying opportunity within the existing hospitality industry to tap into the new found, growing customer base.

For now, hospitality investments are on the rise and this is going to be an exciting deal space to keep an eye on!

Posted by Akshay Hoshing

The Euro may have weakened and European heads of states and finances may appear to be scrambling for solutions to the economic issues on news channels but all is not grim as far as business interests between India and Europe goes. Despite what appears to be tumultuous times for everyone involved, there is an upside for Indian investors seeking asset acquisition to play in the European markets. Likewise, there are reasons for European investors eying the Indian market to be optimistic about their prospects as the corridor.

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