Blackstone Inc., a global alternative investment firm managing over USD 1 trillion in assets, is venturing into India's hotel market amid a strong rebound post-pandemic. With significant investments in Indian real estate, Blackstone is cautiously entering the hospitality sector, targeting independent hotels in South India valued between INR 300-400 crore. Blackstone's entry adds to growing investor interest in the sector, evidenced by recent acquisitions such as Chalet Hotels' purchase of Courtyard by Marriott Aravali Resort and Max Estates' acquisition of Accord Hotels and Resorts. Blackstone Inc., the world's largest alternative investment firm with over USD 1 trillion in assets under management (AUM) globally, is reportedly entering the Indian hotel market.
Blackstone is already a major player in Indian commercial real estate, malls, warehouses, and data centers, managing assets worth USD 50 billion in India. The company is looking to expand its portfolio further.
Unlike its usual large-scale investments, Blackstone is taking a cautious step into the hotel sector. Instead of targeting large hotel chains, they are evaluating independent hotels in South India, priced between INR 300-400 crore (USD 36 - USD 48 million). Industry experts believe this targeted approach allows them to assess the market before potentially venturing into bigger acquisitions.
Blackstone's interest in the hospitality sector comes as the industry sees a strong rebound. After the impact of COVID-19, travel and tourism have seen a sharp recovery. Hotel occupancy rates have risen to 73%, a 20% increase from the previous year. Room rates have also jumped by about 25% in the last fiscal year (April 2022 - March 2023).
This positive trend has fuelled investor interest in the hotel industry. In 2023, hotel investments reached over USD 400 million, a fourfold increase compared to the previous year. Several new hotel chains have also entered the market.
Despite a rise in new hotels, there's still a gap between supply and demand. This keeps room rates high and creates a creative environment for investors like Blackstone. Recent acquisitions in the sector highlight current valuations, Last month, Chalet Hotels acquired the 158-key Courtyard by Marriott Aravali Resort for INR 315 crore. A year ago, they acquired the 80-room Dukes Retreat resort in Khandala for INR 133 crore. Anirudh Agro Farms acquired the 400-room Viceroy Hotels (operated by Courtyard by Marriott) in Hyderabad for INR 150 crore through bankruptcy. In June 2022, Max Estates bought Accord Hotels and Resorts for around INR 324 crore.
Blackstone's move into the Indian hotel market shows they believe in its strong recovery. By focusing on independent hotels, they're strategically positioning themselves in this promising market.
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