A total of 42,071 branded hotel keys were signed across the country in 2024, while 11,352 keys became operational, reflecting a year of accelerated development and investor confidence. The bulk of this growth came from Tier II and Tier III cities, which accounted for 77% of the hotel signings – a strong indicator of the sector’s geographical diversification and the growing importance of secondary markets.

“India’s hospitality sector showed remarkable resilience in 2024. The shift toward smaller cities like Amritsar, Mathura, and Bikaner reflects the expanding footprint of quality hospitality services across the country,” said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.

Investment Trends: HNIs and Family Offices Take the Lead

The investor landscape in 2024 was notably diverse. High-net-worth individuals (HNIs), family offices, and private hotel owners emerged as dominant players, contributing to 51% of the total transaction volume. Listed hotel companies followed with a 34% share, while owner-operators and real estate developers accounted for 8% and 7% respectively.

Approximately 25 hotel transactions took place during the year, largely focused on operational properties in both business and leisure destinations. These deals reflect continued investor appetite, particularly for assets in growth corridors and tourism hotspots.

Rise of Tier II and III Cities

One of the most defining trends of 2024 was the sector’s pivot toward underserved Tier II and III cities. Nearly half of all hotel transactions involved properties in these regions, highlighting the increasing demand for branded accommodations beyond metro cities.

In addition to the operational deals, greenfield developments surged in 2024. With around 28,281 keys in greenfield projects, the year nearly doubled the total from 2023 (~13,600 keys), showcasing strong developer confidence in long-term market potential.

Preferred Agreement Models: Management Contracts Dominate

Management contracts remained the preferred business model, making up 81% of the total hotel keys signed in 2024. Franchise agreements accounted for 14%, while lease or revenue-sharing models made up the remaining 5%. This structure reflects the continued inclination of hotel operators toward asset-light strategies.

In Tier I cities such as Mumbai, Bengaluru, Hyderabad, Pune, and Chennai, the market saw hotel signings with over 250+ keys, reaffirming these hubs’ ongoing relevance amid rising commercial and travel activity.

Positive Outlook for 2025

The momentum has carried into 2025, with JLL already facilitating two hotel transactions in Chennai and Goa in the first quarter. The sector remains buoyed by favorable economic indicators, growing domestic travel demand, and the Government’s tourism push in the Union Budget.

“The positive outlook is reinforced by strong investor sentiment and sustained demand. Following a record-breaking year for investments and development in 2024, the hospitality sector in India is set to maintain its growth trajectory in 2025,” added Jaideep Dang.

As the hospitality sector in India continues to mature and expand, 2024 may be remembered as a landmark year that laid the foundation for long-term growth, especially in previously overlooked regions. The combination of strategic investment, robust domestic tourism, and supportive government policies sets the stage for a vibrant future in Indian hospitality.

Also Read: The evolving face of human capital in the hospitality industry

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