India is set to lead the Asia Pacific hotel market, claiming 25% of total openings in 2024 and maintaining the highest number of new openings through 2026. This surge is fueled by a robust investment climate and a growing demand for hospitality services.
In 2023, hotel investments in India reached a record $401 million, a four-fold increase from the previous year, according to a JLL report. This significant growth reflects the strong confidence of hotel developers in the industry’s long-term potential. Greenfield project signings also jumped by around 8,000 keys, further indicating the optimistic outlook.
High-net-worth individuals (HNIs) and institutional capital accounted for 31% of these investments, followed by real estate developers (27%) and owner-operators (11%). This diverse investor base highlights the appeal of India’s hotel market across different segments.
India’s hospitality sector is witnessing unprecedented growth, with a record-breaking 25,176 hotel signings and 12,647 new openings in 2023. Tier-2 cities are emerging as key development hubs, attracting a significant portion of these new projects. The fourth quarter of 2023 alone saw 82 hotel signings, representing 8,741 keys, demonstrating the continued momentum.
Despite challenges during the pandemic, India’s hotel industry has rebounded strongly. Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) exceeded pre-pandemic levels in 2022, while occupancy rates also showed significant improvement. RevPAR grew by 15.8% between October and December 2023 compared to the same period in 2022, indicating a robust recovery and increasing demand.
Leading hotel groups are capitalizing on this momentum by aggressively expanding their presence in India. IHG plans to double its footprint in India within five years, signing 13 new agreements across luxury, premium, and budget sectors. Hilton is aiming to triple its Indian portfolio from 26 to 75 properties in the next three to four years, with 20 hotels already in the pipeline. Marriott, after record-breaking signings in 2023 and early 2024, is poised to open its 150th hotel in India and plans to add 12 more hotels in 2024, focusing on the spiritual tourism sector. Accor, with 62 hotels in its current portfolio, signed 11 new agreements in 2023 and plans to open nine more properties this year across different segments.
With booming domestic tourism, rising demand for destination weddings, spiritual tourism, and both leisure and business travel, India’s hospitality sector is poised for sustained growth in the coming years.
