India’s Hospitality Sector Poised to Attract $1 Billion in Investments by 2028
India’s hospitality sector had a strong start to 2025, with revenue per available room (RevPAR) increasing 16.3% year-over-year in the first quarter.
By SOH Edit Team
India’s hospitality industry showed strong momentum in the first quarter of 2025 and is projected to attract $1 billion in investments by 2028—a significant jump from the $340 million in hotel transactions recorded in 2024.
According to a report by global real estate and investment firm JLL, Revenue Per Available Room (RevPAR) rose by 16.3% year-over-year during the January–March period, reflecting robust sector performance.
The sector's strong performance continued sequentially, with an 8% increase in RevPAR during October–December 2024 across India. Investor confidence remained robust, evidenced by 79 new hotel signings totaling 9,478 keys during the quarter—highlighting sustained expansion in the country’s accommodation landscape. Additionally, 31 branded hotels with a combined 3,253 keys commenced operations during the same period.
Among major markets, Bengaluru led with the highest RevPAR growth at 38.3%, bolstered by the Aero India 2025 event. Delhi and Mumbai followed, registering 26.2% and 21.3% growth, respectively. Chennai saw an 18.7% increase, supported by corporate travel despite a slight dip in occupancy. Hyderabad recorded 15.1% growth, driven primarily by higher average daily rates.
Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL
According to the data, Maharashtra led in branded hotel openings during the quarter, with 836 keys, while Karnataka topped branded hotel signings, totaling 1,352 keys. The upscale and midscale segments dominated both openings and signings. The upscale segment saw the launch of 10 branded hotels comprising 843 keys, alongside 21 new signings representing 2,734 keys. The midscale category recorded 12 openings with 934 keys and 29 signings totaling 2,821 keys. The upper upscale and luxury segments followed closely behind, while the economy segment lagged, with only one hotel opening and six new signings during the period.
A majority of this development activity was concentrated in Tier 2 markets, which accounted for 15 branded hotel openings (1,307 keys) and 50 signings (5,904 keys)—surpassing the combined volume seen in Tier 1 and Tier 3 cities.
Transaction activity also remained active. Notably, Chalet Hotels Limited acquired The Westin Resort & Spa, Rishikesh (141 keys) for approximately ₹530 crore. Strategic partnerships were also highlighted, including Hilton’s agreement with NILE Hospitality to launch 75 Hampton-branded hotels across India, with the first openings slated for 2026.
Projected growth
The projected growth is notable, given that India’s hospitality sector saw $340 million in hotel transactions last year.
City-Wise RevPAR Growth during Q1:
- Bengaluru: 38.3 per cent
- Delhi: 26.2 per cent
- Mumbai: 21.3 per cent
- Chennai: 18.7 per cent
- Hyderabad: 15.1 per cent growth
Data on Hotel Openings / Signings:
- Maharashtra: Branded hotel openings (836 keys)
- Karnataka: Branded hotel signings (1,352 keys)
Upscale Segment:
- 10 branded hotel openings (843 keys)
- 21 hotel signings (2,734 keys)
Midscale Segment:
- 12 branded hotel openings (934 keys)
- 29 hotel signings (2,821 keys)
Economy Segment:
- 1 hotel opening
- 6 hotel signings