According to JLL, real estate company, in 2024 there will be 25 hotels that have changed hands for multi-million dollar amounts. The majority of these transactions involved commercial properties in business and leisure destinations.
JLL states that the high volume of transactions indicates a strong recovery in the Indian hospitality sector and an expanding footprint.
Capital is available for hotel investment. The yields for hotel investments are attractive when compared with previous years,” Jaideep Dang said, managing director of JLL’s Hotels and Hospitality Group.
Dang told Skift that “most of the deals occurred in the 3 and 4 star segments”. A small number of transactions involved luxury and 5-star properties. Most of the 5-star and luxury hotels are held by Indian listed firms. These companies aren’t selling — they’re buying.”
JLL estimates that nearly half of hotel transactions will occur in Tier-2 or Tier-3 cities by 2024. This trend has widened the reach of industry by bringing quality accommodation to previously underserved markets Amritsar and Mathura are just a few examples.
India has seen a rise in interest by hospitality chains. Last week, Hilton said that it plans to increase its presence in India In the next 10 years, this will increase by a factor of 10. In the coming years, Hilton plans to introduce five new brands in the country.
Accor also plans to scale up to 300 properties The company wants to have all of the hotels in the country open by 2030. With 25-30 new openings per year, the company plans to expand across multiple brands. This includes lifestyle brands such Ennismore and Mercure as well affordable Ibis.
As well, international brands like IHG Ascott Marriott Radisson and Marriott are available. looking at expanding their India portfolios. The Ascott Limited in Singapore is targeting Tier-2 and Tier-3 cities to increase their portfolio from 5,500 to 12,000.
Thai hospitality company – Last Month Dusit Hotels & Resorts officially returned to India It left the country back in 2016. It has 10 future properties, with an inventory 800 keys.
Diverse Investor base
JLL reported that private hoteliers, family offices and high-net-worth people will account for 51% in the value of transactions by 2024.
Dang: “Since this pandemic we have seen a pattern emerging.” “A large part of the activity comes from Indian listed companies that have a long history in the hospitality industry. There’s also significant interest from individuals with private wealth — people who’ve made money in other industries and are now investing in hotels for annuity income and capital growth.”
He said the hotel industry was a crucial part of the economy. performance remains robust. “Hotels and airlines are at capacity, while load capacities continue to increase.” This is why there are more investors entering the hotel market.”
Strong Momentum in Hotel Signings
According to JLL’s estimates, by 2024 there will be more than 42,000 branded rooms in India. Approximately 75% of the signings are in Tier-2 and 3 markets.
Dang emphasized a new trend for smaller cities. High local demand in food, beverages, and banqueting drives the creation of hotels that have fewer bedrooms but more event spaces. “These cities won’t be getting 500-key hotel,” he explained. “You might see an 80-room hotel with 20,000 square feet of event space — similar to what you’d find in a major city. There would be fewer rooms.
After the Covid era hotel companies have rebalanced their portfolios. The cost of land is increasing in major cities, making it increasingly difficult to build large luxury hotels. “So companies are diversifying — looking at mixed-use developments that combine hotels with malls or office spaces to offset costs and reduce financial risk,” Dang said.
Accommodations Stock Index Performance from Year to Date
What am I seeing? The performance of the hotel and short-term rentals sector stocks in the ST200. The index comprises companies listed on global markets including international and local hotel brands, REITs in the hotel industry, hotel management firms, alternative accommodation, timeshares and other hotel companies.
The Skift Travel 200 The financial performance of more than 200 travel companies, worth over a trillion dollars, is combined into one number. See more hotels and short-term rental financial sector performance.
Read the full methodology behind the Skift Travel 200.
Accommodations Stock Index Performance from Year to Date
What am I seeing? The performance of the hotel and short-term rentals sector stocks in the ST200. The index comprises companies listed on global markets including international and local hotel brands, REITs in the hotel industry, hotel management firms, alternative accommodation, timeshares, and other hotel companies.
The Skift Travel 200 The financial performance of more than 200 travel companies, worth over a trillion dollars, is combined into one number. See more hotels and short-term rental financial sector performance.
Read the full methodology behind the Skift Travel 200.
Accommodations Stock Index Performance from Year to Date
What am I seeing? The performance of the hotel and short-term rentals sector stocks in the ST200. The index comprises companies listed on global markets including international and local hotel brands, REITs in the hotel industry, hotel management firms, alternative accommodation, timeshares, and other hotel companies.
The Skift Travel 200 The financial performance of more than 200 travel companies, worth over a trillion dollars, is combined into one number. See more hotels and short-term rental financial sector performance.
Read the full methodology behind the Skift Travel 200.
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