Whitbread - Expansion

India’s population is the second largest globally and accounts for 17% of the world’s population. India’s size is roughly one-third the size of the U.S and has a population 370% greater than U.S, at roundly 1.1 billion. U.S. has an inventory of approximately 4.59 million rooms compared to the Indian branded room inventory of roundly 90,000-100,000 excluding the unorganized sector, which represents India’s tremendous potential or hotel industry.

The industry will further benefit from the rising disposable income levels among Indians due to surge in economic activities.Various domestic and international brands have begun creating joint venture partnerships, co-branding and/or re-branding existing properties, and developing Greenfield projects.

The following are the major domestic and international investments in Indian hotel industry. These include Foreign institutional investments in India hotel industry:

Joint Venture Hotel Investments:

IndiaAccor and Interglobe Enterprises formed a 60:40 joint venture to develop 25 ‘Ibis’ brand hotels in India over the next 10 years with an estimated investment of around $200 million.

Bessemer Venture Partners and New Vernon invested approximately $8.5 million in Sarovar Hotels for the development of the Hometel brand in India.

Warburg Pincus invested approximately $60 million to acquire a 27% stake in Lemon Tree Hotels Emaar MGF.

WHITBREAD announced a 50:50 joint venture with Emaar-MGF to develop 80 hotels in India totaling 12,000 rooms and branded under Whitbread’s Premier Travel Inn with an investment plan of $600 million over ten years.

Temasek Holdings acquired a 21.74% stake in GL hotels for approximately $30 million.

Credit Suisse invested $50 million in Park Hotels and acquired approximately 15% stake. Kotak Realty Group announced their acquisition of an 11.11% stake in Pride Hotel Group.

Hilton and DLF have tied up to develop 75 hotel projects in India over the next five to seven years.

A joint investment in Lemon Tree Hotels by Kotak Realty Fund and Shinsei Bank was announced in with an estimated investment of around $30 million, which equated to a 5.9% stake.

Goldman Sachs announced it would invest approximately $80 million in a luxury deluxe hotel in Bangalore.

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