India one of the strongest global hotel markets, says JLL Apac head

Gaurav Sharma that the growing investor confidence was leading to record levels of signings and transactions, pushing up industry metrics

India’s hospitality sector is witnessing one of its strongest growth cycles. Xander Nijnens, senior managing director at JLL Hotels and Hospitality and head of advisory and asset management, Asia Pacific (APAC) and Gaurav Sharma, managing director hotels, India and senior director hotels capital markets, Asia, JLL told Roshni Shekhar in an interview that the growing investor confidence in the country’s hospitality industry across institutional investors and family offices was leading to record levels of signings and transactions, pushing up industry metrics. Edited excerpts:

 

How has India evolved as a market for global investors in terms of investments in the hospitality industry?

   

Nijnens: Investment volumes are slower due to global capital-market volatility and longer decision-making cycles in the Asia-Pacific market this year. India’s domestic market is far stronger and more resilient than many international markets. Global investors are starting to get excited about the domestic demand-driven hospitality story in India, and finally, an increasing number of credible entry points for foreign capital, with a route into hospitality in India through an indirect route.

   

Institutionalisation is happening in the industry with the formation of platforms and listed vehicles, which are increasingly creating entry points for foreign capital. Investors look to partner with best-in-class local hotel developers and owners to deploy their capital. India is currently one of the strongest global hotel markets due to favourable supply-demand dynamics and strong domestic demand. Slow development timelines in luxury and international-standard hotels mean the positive trading cycle will likely last longer. India offers one of the most exciting global hospitality growth stories since China.

   

Sharma: More institutionalisation is happening in the industry, and smarter capital is entering this business sector, which means more interest from funds and family offices. Family offices are also seeing a healthy return on replacement and build costs. In 2025, HNIs (high net-worth individuals) family office and private hotel owners contributed 53 per cent in terms of transactions, while 37 per cent of hotel transactions were contributed by listed companies.

   

How is retail investment picking up in India’s hospitality sector?

   

Sharma: Yes, there is huge interest in that, and that’s why these (hotel companies’) listings are happening. In fact, in this year itself, three companies got listed on the stock exchange.

   

Where does India stand in terms of return on capital in this sector compared to other global markets?

   

Sharma: Historically, hotel returns were poor due to low ADRs (average daily rates) relative to construction costs. This gap has now narrowed significantly, generating healthy returns and growing investor confidence. However, the sector’s strong performance has created a scarcity of transactable assets, with more buyers chasing fewer sellers willing to exit.

   

Any hospitality company which has been listed has given good returns to the shareholders. All the stocks which are listed are trading at very healthy multiples.

   

As the cost of capital reduces, the returns of this capital will start to compare to what we are seeing in global benchmarks. Investors in India are finally earning healthy returns versus replacement cost, increasing interest in building new assets.

 

That’s why more and more capital is also interested in eventually coming and building more assets.

   

With several hotel firms in India and global hotel brands announcing partnerships and expanding focus on India, is this year creating a record in terms of signings? Additionally, how is RevPAR expected to pan out in the coming years?

   

Sharma: On a 12-month basis, this is the highest year in terms of hotel signings in India. RevPAR is also expected to reach a record high this year, due to the demand-supply gap. RevPAR will continue to grow, but it will be driven by ADR rather than occupancy.

   

Earlier this year, JLL had estimated that hotel transactions would reach $1 billion in transactions by 2028. Is India in line to achieve this?

   

Sharma: India is on track and may have already crossed the $1 billion mark by 2028. This includes public and private capital in the industry.

   

Is there any particular segment in the industry where the Indian market is ahead of other countries?

   

Nijnens: A few things to highlight are just how strong India’s domestic market is compared to a lot of other markets. India has always had some really strong local brands, and it has strong hospitality capabilities. Whenever we talk to investors and operators, they are excited about domestic demand, including weddings and conferences and events. This is a major part of the whole India story, which in itself should mean that it’s a lot more resilient.

   

The challenge in a volatile global macro climate today is as source markets come and go, a lot of strong tourism markets don't have the domestic depth of demand like India had to fall back on.

   

There’s a lot of excitement at the moment around branded residences. Developers are increasing their overall returns on the precincts or mixed-use development by pairing luxury hotels with branded residences, or now increasingly opting for standalone luxury branded residences. This, to some extent, is going from the luxury segment to more into the upper upscale and upscale segments in the country.

   

While the hospitality industry is booming, are there any possible factors that could hamper the growth of the industry?

   

Sharma: One of the biggest bottlenecks would be the deceleration in growth infrastructure that could hamper the growth of the country’s hospitality industry. Another significant potential bottleneck is the deceleration in infrastructure development, which could constrain the hospitality industry’s growth trajectory.

   

Nijnens: Maybe a softer point to add is talent. India has this fantastic legacy built into this. I think just keeping pace with this big pipeline coming through, it’s just important from an educational infrastructure perspective that the sector is able to attract talent, pay the right wages and also retain the talent within this sector as it continues to grow.