India’s hospitality sector is witnessing a robust growth trajectory, with total investments reaching $93 million in the first half of 2024, according to the JLL Hotel Investment Trends – India H1 2024 report. The report highlights significant activity across the sector, with listed companies accounting for 44% of the total transaction volumes, followed by owner-operators at 30%, and high-net-worth individuals (HNIs), family offices, and private hotel owners contributing 26%. The sector’s overall investment volume for 2024 is projected to touch $413 million, reflecting a 22% growth compared to the previous year.
The upscale segment led the transaction volumes with a 44% share, followed by the midscale segment at 31%, luxury at 23%, and the economy segment making up the rest. Operational assets dominated the transaction landscape, comprising 72% of the volume, while under-construction hotels accounted for 23%, and land leases constituted the remaining share. Six notable deals were completed during the period, including operational hotels in Tier-I cities and leisure destinations, as well as greenfield development projects in the airport district.
The surge in investments underscores the sector’s growing attractiveness, bolstered by macroeconomic stability, expanding commercial markets, and improved air connectivity. Jaideep Dang, managing director of JLL’s hotels and hospitality group in India, noted that the sector’s resilience and growth potential have spurred investor interest in both operational assets and land sales.
Key transactions in H1 2024 included an operational hotel in Mumbai and a premium hotel land sale in Goa, with a combined value of $70 million. Notably, Tier-II and Tier-III cities captured 83% of the 19,442 keys signed during the period, demonstrating a shift towards emerging markets. Management contracts dominated these signings with an 89% share, while franchises accounted for 8%, and lease or revenue-sharing agreements represented 3%.
Greenfield projects experienced remarkable growth, with approximately 13,700 keys added in the first half of 2024, surpassing the total count for the entire year of 2023. The midscale segment continued to drive market expansion, accounting for 46% of new openings, followed by upscale at 29%, upper upscale at 12%, luxury at 8%, and economy at 5%.
Tier-I markets, including Mumbai, Hyderabad, Pune, and Chennai, led hotel signings with over 250 keys, driven by strong domestic demand and increased commercial activity. These markets accounted for 78% of the projected transaction volumes, with Tier-II and Tier-III cities contributing the remaining 22%.
As the year progresses, India’s hospitality sector is poised to build on the positive trends observed in the first half of 2024. With increased investment activity, strong domestic demand, and a growing focus on midscale and emerging markets, the industry is set to play a pivotal role in India’s economic and infrastructure development.
