With 42,071 new hotel keys added to its inventory, India’s hospitality industry had a spectacular uptick in 2024, demonstrating a strong expansion propelled by growing demand in tier 2 and tier 3 cities. This notable expansion signals a move away from historically crowded metropolises like Delhi, Mumbai, and Bengaluru while newer locations like Amritsar, Mathura, and Bikaner attract both tourists and investors.
According to a recent report by JLL, the sector remained resilient and dynamic, maintaining strong investment momentum despite global economic uncertainties. Approximately 25 major deals were concluded in 2024, predominantly involving operational properties in both established business hubs and up-and-coming leisure destinations.
The year saw branded hotel signings totalling 42,071 keys, 77% of which were located in tier 2 and tier 3 cities—signalling the industry’s deeper penetration into previously underserved markets. These signings indicate a growing appetite for recognised hospitality brands in smaller towns, driven by rising domestic tourism and a preference for trusted, standardised services.
Investments were led by high-net-worth individuals (HNIs), family offices, and private hotel owners, contributing to 51% of the total transaction volume. Listed hotel companies followed closely at 34%, while owner-operators and real estate developers accounted for 8% and 7%, respectively. This diverse investment profile underscores the growing maturity and confidence in India’s hospitality market.
One of the most prominent trends of 2024 was the surge in greenfield hotel developments, which contributed 28,281 new keys—more than doubling the 13,600 added through greenfield projects in 2023. This rise reflects strong confidence in long-term sectoral growth, particularly in new and untapped markets.
Management contracts dominated the mode of hotel development, accounting for 81% of all keys signed during the year. Franchise agreements comprised 14%, and lease/revenue share models made up the remaining 5%, showcasing a varied and evolving business environment within the sector.
Environmental sustainability also featured prominently. Developers are increasingly aligning with green development goals, while simultaneously benefitting from the government’s push on infrastructure, tourism, and regional connectivity—further enhancing the viability of smaller cities for hotel expansion.
Mumbai, while traditionally a key market, also reflected this broader national trend, with a substantial number of new keys being added as part of India’s overall 2024 growth. The city, like others, is seeing investments spread toward its peripheral and less-developed areas.
India’s hospitality industry, with its balanced investment ecosystem, growing tourist influx, and expanding middle class, is poised for continued expansion. With the right mix of strategic planning and sustainable practices, the sector is well-positioned to remain a key player in the global hospitality landscape in the years ahead.
Source: TTW
