The Indian hospitality sector showed robust growth in the fourth quarter (October-December) of 2024, with the top six markets seeing year-over-year increases in both Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR). Hyderabad emerged as the leader, with a notable 23.3% growth in RevPAR, driven primarily by a significant rise in ADR. Bengaluru also demonstrated resilience, with strong RevPAR growth supported by improvements in both ADR and occupancy rates.
Increased Hotel Signings and Investment Activity
Q4 2024 witnessed substantial hotel signings, with 99 new hotels and 11,943 keys added to the market. This signals continued investor confidence and expansion in India’s hospitality sector. The total value of transactions in 2024 was estimated at approximately INR 2,900 crore, reflecting strong investment activity across the industry.
Growing Interest in Tier II and III Cities
Tier II and Tier III cities accounted for 50% of the total transactions in 2024, primarily in the unbranded midscale property segment. This trend suggests a rising demand for hospitality infrastructure beyond major metropolitan areas. Additionally, 75% of new hotel signings occurred in these cities, with the midscale segment dominating, representing 53% of hotel openings and 44% of signings. Uttar Pradesh led in hotel signings, with 1,744 keys.
Emerging Hotspots and Investment Shifts
New hotspots are emerging, with significant growth potential in Delhi’s Yashobhoomi area and Mumbai’s airport district. These developments indicate the growing appeal of non-metro regions and offer promising prospects for future expansion in the hospitality sector. High-Net-Worth Individuals (HNIs), family offices, and private owners accounted for 51% of the investment volume, underscoring increasing interest from individual investors.
Positive Outlook for the Indian Hospitality Market
Overall, the Q4 2024 report paints a picture of a dynamic and expanding Indian hospitality market. The growing investment in Tier II and III cities, combined with rising ADR and RevPAR in key metros, suggests a bright future for the industry.
Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL, stated, “Hospitality markets in India saw unprecedented activity in 2024. Backed by strong domestic travel demand, we saw 367 new hotel signings and 154 new hotel openings, representing a 14% growth over 2023. This will stimulate construction activity, lending, and create jobs across the industry.”
