JLL reports strong growth in India's hotel investment market for H1 2024

India's hotel investment market showed robust growth in the first half of 2024, with transactions reaching $93 million and forecasted volumes expected to hit $413 million by year-end—a 22 per cent increase compared to 2023. According to JLL's Hotel Investment Trends - India H1 2024 report, listed hotel companies led the charge, contributing 44 per cent of the total transaction volume, followed by owner-operators at 30 per cent, and HNIs, family offices, and private hotel owners at 26 per cent.

The report highlights that 72 per cent of the transaction volume was tied to operational hotels, 23 per cent to under-construction properties, and the remainder to land leases. Six key hotel transactions were completed between January and June, ranging from operational assets in Tier I cities and leisure destinations to land leases for greenfield developments in airport districts.

JLL anticipates that the positive momentum will continue throughout the second half of the year, which has already seen two significant transactions totaling $70 million in key hospitality markets. Tier I markets, including Mumbai, Hyderabad, Pune, and Chennai, remain dominant, accounting for 78 per cent of the projected transaction volumes, while Tier II and III markets are expected to contribute the remaining 22 per cent.

Hotel signings in H1 2024 were particularly strong, with a total of 19,442 keys added, 83 per cent of which were located in Tier II and III cities. Management contracts dominated the signing agreements, making up 89 per cent, followed by franchises (eight per cent) and lease and revenue share agreements (three per cent). The period also saw a notable increase in greenfield projects, with around 13,700 keys signed, surpassing the total for the entire year of 2023.

In terms of new hotel openings, H1 2024 saw the addition of 6,071 keys, with the midscale segment capturing the largest share at 46 per cent. The upscale segment followed with 29 per cent, upper upscale with 12 per cent, luxury with eight per cent, and economy with five per cent.

“The first half of 2024 has paved the way for a dynamic hotel transactions landscape for the rest of the year, with the entire year’s forecasted volumes at $413 million, a 22 per cent growth over 2023 volumes. Notably, JLL has already facilitated two significant transactions at the onset of the second half of 2024, comprising an operational hotel in Mumbai and a premium hotel land sale in Goa. The surge in investor interest for both - operating assets and land sales illustrate the attractiveness of the investment landscape, bolstered by favourable macroeconomic factors, an expanding commercial market, and improved air connectivity. This positive outlook is further reinforced by the substantial hotel development activity witnessed across various tiers, with over 19,440 keys signed in the first half of 2024 alone,” stated Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.