- Hotel investment transactions in India reached $497 million in January-June 2026, up 197% from $167 million a year earlier.
- Full-year hotel investment volumes are projected to reach $1.1 billion, a 94% increase over 2025.
- Tier II and III cities accounted for 60% of investment transactions, overtaking the traditional dominance of major metros.
- Real estate developers emerged as the largest investor group, accounting for 58% of transaction volumes.
- Insolvency and Bankruptcy Code (IBC)-led distressed asset transactions contributed $288 million, or 58% of H1 investment volumes.
- Hotel brands signed agreements covering 29,360 rooms in the first half of 2026, with 74% of the new rooms planned in Tier II and III cities.
India’s hotel investment market recorded a sharp increase in activity in the first half of 2026, with transaction volumes rising 197% year-on-year to $497 million across 11 deals, according to JLL’s Hotel Investment Trends in India for H1 CY 2026 report.
The investment surge comes as real estate developers increase their participation in the hospitality sector and investors expand their focus beyond established metropolitan markets. Smaller cities and leisure destinations are attracting a growing share of capital, while distressed hotel assets are creating opportunities for investors seeking properties at potentially attractive valuations.
JLL expects India’s hotel investment transaction volumes to reach approximately $1.1 billion in the full calendar year 2026, up 94% from $567 million in 2025.
Real Estate Developers Emerge as Biggest Hotel Investors
Real estate developers accounted for 58% of hotel investment transaction volumes in the first half of 2026, marking a significant change in the investor profile of the sector.
In the corresponding period of the previous year, high-net-worth individuals (HNIs), family offices and private hotel owners collectively held the leading position, with approximately 54% of investment activity.
In H1 2026, listed hotel companies accounted for 31.1% of transaction volumes, while HNIs, family offices and private hotel owners contributed 8.2%.
The growing participation of property developers indicates that hospitality is becoming an increasingly important part of real estate investment strategies. Hotels offer developers an opportunity to diversify beyond residential projects and conventional commercial properties.
Gaurav Sharma, Managing Director, Hotels, India, and Senior Director, Hotels Capital Markets, Asia, at JLL, said the market was undergoing a fundamental shift in investor profiles and the geographical distribution of capital.
He highlighted the increasing role of developers, investment in emerging cities and strong hotel signing activity as factors supporting the sector’s growth prospects.
Tier II and III Cities Account for 60% of Hotel Investments
Smaller cities and emerging destinations accounted for 60% of hotel investment transaction volumes in H1 2026, while Tier I cities contributed the remaining 40%.
The investments covered a range of properties, including luxury resorts in Kerala and Coorg, luxury hotels in Agra, Mussoorie and Noida, and upper-upscale hotels in Udaipur and Jaipur.
The growing interest in these markets reflects investors’ efforts to identify opportunities beyond traditional metropolitan business centres.
For hotel investors, emerging destinations can offer access to leisure tourism, expanding local economies and markets where the supply of established branded hotels may be more limited.
JLL also reported continued transaction activity in the second half of the year, including acquisitions in Ahmedabad, Bengaluru and Pune. Strategic land transactions covering 420 acres in the Mumbai Metropolitan Region (MMR) and 15 acres in Goa were collectively valued at approximately $313 million.
These land transactions indicate that investor interest extends beyond operating hotels to sites that could support future hospitality developments. However, land transactions and hotel acquisitions are different categories of activity and should not be treated as equivalent.
Distressed Hotel Assets Generate $288 Million
Transactions involving distressed assets through the Insolvency and Bankruptcy Code (IBC) generated approximately $288 million in H1 2026, accounting for 58% of the reported hotel investment transaction volume.
Distressed assets are properties or businesses facing financial difficulties, insolvency proceedings or other circumstances that may lead to a sale or restructuring.
Such transactions can attract investors looking to acquire existing properties, improve their operations or reposition them for a different market segment. However, the final returns depend on the property’s condition, outstanding liabilities, legal position and the cost of restoring or operating the asset.
The substantial contribution from IBC-led transactions highlights the importance of insolvency-related opportunities in the hotel investment market during the first half of 2026.
It also shows that the investment surge was not driven solely by new hotel development or conventional acquisitions of financially stable properties.
Luxury Hotels Account for More Than Half of Investment Volumes
Operational hotels accounted for approximately 70% of total transaction volumes during H1 2026. Under-construction or non-operational hotels contributed 23%, while land leases accounted for the balance.
The luxury segment attracted the largest share of investment, accounting for 51% of transaction volumes. Upscale hotels followed with 35%, upper-upscale properties with 12%, and economy hotels with 2%.
The figures suggest that investors were particularly interested in established hotel assets, especially those operating in the higher-end segments of the market.
Operational hotels can offer buyers an existing business, staff, infrastructure and revenue-generating capacity, unlike projects that are still under construction. Nevertheless, investment performance depends on factors such as occupancy, room rates, operating costs and the property’s location.
The strong luxury and upscale shares also reflect the importance investors place on branded hospitality assets and their potential to attract customers willing to pay higher room rates.
Hotel Brands Sign Agreements for 29,360 Rooms
Hotel development activity remained strong, with branded hotel signings reaching 29,360 keys in the first half of 2026. In the hospitality industry, a key refers to a room or accommodation unit.
Of these planned rooms, 74% were concentrated in Tier II and III cities, underlining the growing importance of emerging markets to India’s hotel expansion.
Management contracts accounted for 77% of the signed rooms, while franchise agreements contributed 22%. Lease and revenue-sharing arrangements accounted for the remaining 1%.
Under a management contract, a hotel owner typically retains ownership of the property while an operator manages the hotel under an agreed arrangement. A franchise agreement generally allows the owner or operator to use a hotel brand and its systems, subject to the terms of the agreement.
Greenfield developments, which involve building hotels on new sites, accounted for 13,689 keys.
Large-format hotels with more than 250 rooms also recorded stronger activity. Fifteen such hotels were signed in H1 2026, compared with five in the same period last year.
While established markets such as Mumbai, Bengaluru, Hyderabad and Ahmedabad continued to attract hotel development, emerging destinations including Rishikesh, Patna, Navi Mumbai and Jaipur also featured prominently in the development pipeline.
More Than 5,000 Branded Hotel Rooms Opened
India added 5,048 branded hotel rooms during the first half of 2026, with 71% of the openings located in Tier II and III cities.
The upscale segment accounted for 45% of these new rooms, followed by midscale hotels at 28%, economy hotels at 14%, upper-upscale properties at 8% and luxury hotels at 5%.
The concentration of openings in smaller cities suggests that hotel supply is expanding alongside investor interest in emerging destinations.
For travellers, a larger branded hotel supply could broaden accommodation choices in these markets. For hotel operators and investors, however, the commercial outcome will depend on whether demand grows sufficiently to support the additional rooms.
The distinction between new hotel signings and actual openings is important: signed rooms form part of the development pipeline, while opened rooms have progressed to the operational stage.
Hotel Investment Market Expected to Remain Strong in 2026
JLL expects investment interest to remain focused on branded hotels with strong operating performance in established business centres and leisure destinations.
Institutional investors are also expected to pursue larger platform-level investments, which can provide exposure to multiple properties and potentially improve operational efficiencies.
The consultancy expects limited availability of institutional-grade hotel assets, continued competition among buyers and improving hotel operating performance to support investment activity.
The projected $1.1 billion in full-year 2026 transaction volumes would represent a substantial increase over 2025. However, this remains a forecast rather than a confirmed outcome.
The broader trend points to a hospitality market attracting a wider range of investors, with developers, institutional capital and buyers of distressed assets playing increasingly important roles. At the same time, the growing share of investment and planned hotel rooms in smaller cities suggests that India’s hospitality expansion is becoming less concentrated in its traditional metropolitan centres.
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