India’s hospitality sector to see highest investment since pandemic

India’s hospitality sector is set to attract US$ 436 million in investments by the end of the year, a 29% increase from last year and the highest since the pandemic. Hotel transactions have surged from US$ 11 million in 2021 to US$ 76 million in 2022, contributing US$93 million to a US$ 27.5 billion global market in early 2024. The industry is projected to nearly double in size, growing from US$247.31 billion in 2024 to US$ 475.37 billion by 2029.

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India’s hospitality sector is set for a major upgrade, with expected investments of US$436 million by the end of the year. This represents a 29% increase from last year and marks the highest level of investment since the pandemic began, according to JLL’s forecast.

The Indian hotel market is on track to outpace APAC regions like the Maldives, which is projected to close the year with US$150 million in deals.

Forecasts for last year anticipated US$401 million in hotel trade activity. However, after adjusting for a disqualified Mumbai transaction, the actual amount was US$337 million. High-net-worth individuals and family offices lead the buyer pool at 30%, followed by real estate developers at 24%, while private equity has yet to enter the market.

India has also seen a surge in hotel transactions. Following a dip to US$11 million in 2021, India’s hotel transactions have risen to US$76 million in 2022. Globally, the hotel investment market reached US$27.5 billion in the first half of 2024, with India’s share being US$93 million.

Japan continues to lead the APAC region in hotel investments, projected to account for 35-40% of the total by the end of the year. Meanwhile, India signed 16,200 hotel rooms in the first half of 2024, a significant 59% increase from the same period last year. This growth is driven by rising room rates and strong occupancy, despite higher construction costs.

Further, according to a report by Mordor Intelligence, India’s hospitality industry is projected to grow significantly. The market size, estimated at US$247.31 billion in 2024, is expected to nearly double to US$475.37 billion by 2029, reflecting a compound annual growth rate (CAGR) of 13.96% during the forecast period (2024-2029). This robust growth is poised to make a substantial contribution to the economy in the coming years.