Smaller cities drove India's greenfield hotel projects in H1 CY25

Newer hotels may take up larger share of signings in the year, led by global brands expanding operations

India’s hospitality industry is seeing a fresh cycle of structural growth, driven by a surge in greenfield hotel developments across Tier-II, -III, and -IV cities. Developers are increasingly focusing on expanding the branded hotel footprint beyond India’s top metros.

 

“The share of greenfield signings has risen steadily from 39 per cent of total keys signed (12,433 rooms) in 2020 to 59 per cent (26,897 keys) in the first half of 2025, while brownfield projects declined from 40 per cent to 29 per cent during the same period,” said Mandeep S Lamba, president and chief executive officer (South Asia), HVS Anarock.

 

With the industry expected to add over 100,000 rooms in the next five years amid one of its fastest investment cycles, Lamba said there was a growing preference of ground-up projects over conversions or rebranding. Given current trends, greenfield developments are likely to dominate new supply in the coming years, he added.

 

Greenfield hotel development refers to building new projects on undeveloped land, while brownfield projects involve redeveloping or expanding existing properties.

 

According to data shared by HVS Anarock, 59 per cent of key signings for the January-June period were greenfield projects, up from 54 per cent signed in the year-ago period.

 

In terms of properties, 46 per cent of hotels signed in the first half of 2025 were greenfield projects, up from 36 per cent in the same period a year ago.

 

“Greenfield investments have seen increased momentum this year,” said Deepak Jain, managing director at MayFair Consultants. “The primary Tier-II and -III cities located within the industrial corridors and religious hubs have seen significant transactions. New government initiatives and improved road and air connectivity have led to a rise in investment,” Jain said, adding that the entry of new hotel brands in India has also contributed to the growth of new project signings.

 

Global hotel brands are leading the trend, accounting for 59 per cent of greenfield signings in terms of keys (or room count) in 2025. In terms of hotel properties, 52 per cent of greenfield hotel signings have been through international hotel brands in India. In comparison, domestic brands dominate brownfield projects, contributing 60 per cent of brownfield keys and 70 per cent of brownfield hotels signed.

 

“Airport hotels will see tremendous growth with new airports such as Navi Mumbai, Jewar, and Goa coming up,” said Nandivardhan Jain, CEO, Noesis Capital Advisors. “Industrial and manufacturing belts, weekend getaways, and pilgrimage destinations are the next big growth frontiers for Indian hospitality.”

 

In India, many hoteliers are preferring to scale fast through an asset-light model. However, this is majorly specific to metro regions, said a hospitality industry executive who did not want to be named.

 

The hospitality executive and Noesis Capital Advisors added that while institutional players prefer hotels nearing completion or already operational for faster cash flows, large hotel developers are open to land-stage investments.

 

“Compared to other mature markets, India still has a lot of rooms to add, giving way for more greenfield projects,” the executive said.