According to JLL’s Hotel Investment Trends report for the first half of 2024, India’s hospitality sector has attracted USD 93 million in investments from January to June. The sector is projected to close the year with a total investment volume of USD 413 million, marking a 22% increase from 2023.
Listed hotel companies were the primary drivers of transactions, accounting for 44% of the total volume, followed by owner-operators at 30%, and HNIs, family offices, and private hotel owners at 26%. The majority of transactions in H1 2024 involved operational hotels (72%), with 23% related to under-construction hotels and the remainder to land leases.
JLL expects the positive trends from the first half to continue, with two notable transactions in key hospitality markets already completed in the second half of 2024, totaling USD 70 million. Tier I markets, including Mumbai, Hyderabad, Pune, and Chennai, are forecasted to dominate transaction volumes, contributing 78%, while Tier II and III markets account for the remaining 22%.
In the first half of 2024, the sector saw the signing of 19,442 keys, predominantly in Tier II and III cities (83%), with management contracts making up 89% of these signings. This number surpasses the total for 2023, reflecting continued confidence in the sector’s growth. Additionally, 6,071 keys were added through new hotel openings, with the midscale segment holding the largest market share (46%).
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Jaideep Dang, Managing Director, Hotels and Hospitality Group, India at JLL, commented, “The first half of 2024 has set a strong foundation for a dynamic hotel transactions landscape for the rest of the year. With forecasted volumes reaching USD 413 million and significant transactions already underway, the sector’s attractiveness remains high. The increased investor interest, driven by favorable economic conditions and growing commercial activity, supports a positive outlook for the remainder of the year. The substantial hotel development activity, with over 19,440 keys signed, further underscores the sector’s robust potential.”
