According to the JLL Hotel Investment Trends – India H1 2024 report, hotel investments in India totaled $93 million between January and June 2024. Listed companies led the investment activity, contributing 44% of the total transaction volumes. Owner-operators followed with 30%, while high-net-worth individuals (HNWIs), family offices, and private hotel owners accounted for 26%. The report forecasts that annual hotel investment volumes for 2024 will reach $413 million, reflecting a 22% increase compared to 2023. The upscale segment emerged as the largest contributor, accounting for 44% of the transaction volume. The mid-scale segment followed at 31%, luxury at 23%, and the economy segment made up the remaining percentage.
In the first half of 2024, six hotel transactions were completed. These included operational assets in Tier I cities and leisure markets, as well as land leases in airport districts for greenfield projects. Operational hotels represented approximately 72% of the transaction volume, while under-construction hotels constituted 23%. The remaining transactions were related to land leases.
Jaideep Dang, Managing Director of JLL’s Hotels and Hospitality Group in India, noted, “The increase in investor interest for both operational assets and land sales highlights the appeal of the investment landscape. This is supported by favorable macroeconomic factors, an expanding commercial market, and improved air connectivity.” JLL has already facilitated two notable transactions in the second half of 2024, including an operational hotel in Mumbai and a premium hotel land sale in Goa, with a combined value of $70 million.
In H1 2024, 19,442 keys were signed, with 83% located in Tier II and III cities. Management contracts dominated the signings at 89%, followed by franchises at 8%, and lease and revenue share agreements at 3%. The number of greenfield projects reached approximately 13,700 keys, surpassing the total for 2023, which was around 13,600 keys. Tier-I markets, including Mumbai, Hyderabad, Pune, and Chennai, saw significant hotel signings of more than 250 keys due to strong domestic demand and increased commercial activity. In the first half of 2024, 6,071 keys were added through new hotel openings. The midscale segment led with a 46% share, followed by upscale at 29%, upper upscale at 12%, luxury at 8%, and the economy segment at 5%.
The report projects that Tier-I markets will account for 78% of the total transaction volumes for the remainder of 2024, with Tier-II and III markets comprising the remaining 22%. The hospitality sector is expected to continue benefiting from the positive trends observed in the first half of the year.
