India’s IT capital is still booming, but rapid growth has exposed its lack of infrastructure and high-end hotel rooms. Jenny Southan investigates.
Emerging through the gleaming glass doors of Bangalore’s new international airport into the thick heat of India, you could be forgiven for thinking that the city’s infrastructure matches its global ambitions – but the 40km drive into the city soon puts you right. Airport Road is, for the main part, a decent tarmac stretch, but as you get nearer to the centre the traffic becomes more congested, sections of surface give way to compacted mud, potholes and construction sites, and the beeping horns get louder. With a population of almost seven million, Bangalore has acquired a global reputation as India’s primary exporter of computer software and has attracted companies including IBM, Wipro, Accenture and Infosys. But PK Mohankumar, general manager of the Taj West End hotel, says that this image is already out-of-date. He explains: “Bangalore reflects the growth of modern India. It has gone from Garden City to IT City, and now to a city of high-tech education.” Driving through Bangalore, billboards advertising universities and schools cling to the sides of buildings, illustrating the aspirations of a life beyond the poverty divide. Mohankumar says: “Bangalore is driven mainly by the service sector, and a huge source of revenue comes from horticulture and agriculture – nearly eight tonnes of flowers are flown out every day to Europe.” But although Bangalore is focused on growth, its infrastructure is straining to keep pace. Early in the morning, it takes 30 minutes to get from the new BIAL airport to the centre of Bangalore, but any later in the day and the journey can take up to two hours. Until plans to build a subway connecting the airport to the central station are realised (see box page 77 for details), travelling by road is the only way to get around, but with the sheer volume of cars, motorbikes and yellow, three-wheeled auto-rickshaws, not to mention sacred cows and child beggars doing back-flips between the vehicles, getting anywhere can be frustratingly slow. The city’s luxury hotels are acutely aware of this problem. Charles de Foucault, general manager of the Leela Palace Kempinski Bangalore, says: “What we have done is ensure our guests travel in style. We have purchased brand-new automobiles such as 7 Series BMWs, so if you arrange an airport pick-up at least it’s an enjoyable ride, and you can work because the cars are all equipped with chargers so you can use your laptop.” A nice perk – but until now most business travellers have been more concerned with getting a roof over their heads than a luxury limo. When the world began flocking to Bangalore a few years ago, there was a severe shortage of hotel rooms. This has since eased slightly, although less so in the higher categories, where global businessmen account for 80-95 per cent of all guest nights. Mohankumar of the Taj West End says: “Five years ago, demand was at its peak. But in the last couple of years there have been enough rooms in Bangalore, even on Mondays, Tuesdays and Wednesdays, although not necessarily in the luxury category.” So what has changed? Huvida Marshall, general manager of the Oberoi Bangalore, says: “Bangalore enjoys a very high rate of long-stay occupancy because of the kind of business going on, but over the last few years a lot of serviced apartments have opened, so we have lost out on some of these customers. Today, September to May are our busiest months, but three years ago I would have said it was the whole year.” Since the opening of a new 105-room wing in 2007, the Leela Palace has had 361 guestrooms, more than any other five-star property in the city. Indeed, strictly speaking, Bangalore only has around 800 rooms at the highest level. De Foucault says: “The five-star category in India is very wide, although it shouldn’t be. Five-star to me is really only our competitors – the Oberoi, the Taj West End, and the ITC Windsor [a Sheraton].” Even if you are satisfied with a three or four-star hotel, some say that there still aren’t enough rooms, especially at peak times. De Foucault says: “There are fewer hotel rooms in India than there are in New York City. Every time a new property is added in Bangalore it is usually on the small scale – 60 to 80 rooms – so they don’t make much impact. “Up to now, the supply and demand have really not been corrected. There have probably been 200 rooms added to the market in the last couple of years. That’s 10 per cent and it’s not bad – but everyone wants to come to Bangalore at the same time, so it’s not sufficient.” Hoteliers still advise visitors to book at least four to six weeks ahead for midweek stays. Oberoi’s Marshall says: “We have had some supply into the city over the last year and a half in terms of five-star deluxe, five-star and four-star properties, but the demand continues to be strong. I think the supply remains inadequate for a city like Bangalore.” Several international chains would appear to differ. Asian group Shangri-La is planning to open three new properties in 2009 and 2010, adding 1,400 guestrooms and serviced apartments to the city’s inventory, while Ritz-Carlton is making its first foray into India with a 250-room luxury hotel in Bangalore (scheduled to open early 2010) complete with helipad and outdoor rooftop swimming pools. Also due to open in spring 2010 are two new Starwood hotels, which will join the group’s Le Méridien and ITC properties. Aloft Bangalore will be one of the first four properties from the trendy, select-service brand to open in India (Chennai, Ahmedabad and Coimbatore are also scheduled for 2010), while the Sheraton Bangalore Hotel at Brigade Gateway will have 300 rooms and 1,444 sqm of meeting space. Marriott also has extensive plans for Bangalore, with a total of 1,191 rooms across four properties due to come online by 2012. The US chain will debut in the city in 2010 with its five-star JW Marriott brand, and follow this up with a pair of Renaissance hotels, and a golf resort and convention centre near the airport. Finally, Intercontinental Hotels Group announced plans earlier this year for three new Holiday Inns in Bangalore. Despite these announcements, De Foucault remains sceptical that the room shortage will be solved. He comments: “The saying in India is ‘seeing is believing’. They have been talking about creating an extra 5,000 room nights in Bangalore for a long time and you know what? As of last night there are still 2,000. Some hotels will open, but everything that happens here is late, and when I say late, I mean 12 to 18 months late, sometimes even two years. “This means the economic cycle does not always make sense. You may lose the opportunity, so by the time you open, the return on investment no longer makes sense. If the price of a room goes down, for example, in three, four, five years’ time, then all of a sudden your whole calculations won’t balance. Out of all the hotels listed to open in Bangalore in the future, maybe half of them will. For example, I think this year there will be the Oakwood Premier Prestige [with 177 serviced apartments]. But getting licences in India is very difficult. Even when the hotel is built it doesn’t mean you can open it.” As part of BIAL’s airport city expansion, there are plans to open a five-star Trident-branded airport hotel in 2010. Operated by the Oberoi Group, the on-site facility will offer a convenient option for business travellers. Leela’s De Foucault, however, is not convinced that it will succeed in attracting international business. “I think the airport hotel will help those travelling between Bangalore and Mumbai, Delhi or Chennai for meetings, but otherwise I just don’t see how it will survive. There is nothing to do there.” In the past, lack of competition has affected room rates – in 2005, there was an increase of 42 per cent. However, many of the big hotels rely heavily on the US for custom and have already seen a downturn. Marshall says: “We still average 14,000 rupees (£166) a night, but I think if the supply situation hadn’t changed last year, rates would possibly be higher.” Now that the new airport has opened, and carriers such as Kingfisher, which launched its inaugural service between Bangalore and Heathrow in September, are bringing in yet more travellers, it is imperative the city can cope with them. Mohankumar says: “I think in about three year’s time Bangalore’s infrastructure will be world-class.” It is this can-do spirit which has fuelled the city’s growth, but De Foucault notes that Bangalore is no longer the only game in town. “The future is not just in Bangalore, it’s in Hyderabad, it’s in Pune, it’s in Chennai – so many Indian cities are mushrooming. Look at Leela as a group – today it has four hotels, but there are plans to open another seven, including the Leela Gurgaon outside Delhi at the end of this year, and the Leela Udaipur in January 2009.” Bangalore is going to need every bit of its new infrastructure to stay competitive on the national and global stage.
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