 "Homestay, hotel")
India's hospitality sector saw a record investment of $401 million in the financial year 2023, nearly a fourfold increase from the previous year, according to a new report by JLL.
The sector has been witnessing a significant surge since 2023, with a record number of hotel signings and openings — 25,176 keys signed and 12,647 keys opened, stated the report titled 'Hotel Investment Trends - India 2023'.
"There is an increasing interest in hotel development activity in Tier-II cities, with 54 per cent of the total signings taking place in these locations," it said.
The year also achieved a significant milestone of 22 hotel transactions, which is the largest number of assets traded in the last decade, added the report.
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Greenfield projects in the year, totalling approximately 13,600 keys, also surpassed the 2022 numbers of 8,000 keys, showcasing the hotel developers' confidence in the long-term potential of the sector. Three hotel companies also successfully debuted on the bourses in the year gone by.
High Net Worth Individuals (HNIs) and Institutional Capital played a major role in hotel investment activity during 2023, accounting for its largest share at 31 per cent, while real estate developers accounted for 27 per cent, followed by owner operations at 11 per cent.
"The year 2023 has been a record year not only in terms of hotel investments but also in terms of new branded hotel openings and signings. Furthermore, 2024 has started with strong tailwinds as we saw prominent hotel deals early on in this year," said Jaideep Dang, managing director, Hotels and Hospitality Group, India, JLL.
The first quarter of 2024 has witnessed an 80 per cent year-on-year increase in hotel transaction volumes, reaching $78 million, the report further said.
"We expect this story to continue in 2024 on the back of diversified avenues of growth such as expanding commercial office markets and the development of infrastructure such as new airports, expressways, and increasing pilgrimage travel, leading to the emergence of new realty and tourism hotspots across the country," Dang added.
