India’s hospitality investment market recorded strong growth in 2025, with hotel investments rising 67 per cent year-on-year to approximately USD 567 million across 28 transactions, according to JLL. The increase from USD 340 million in 2024 reflects growing investor confidence in India’s tourism and hospitality infrastructure, supported by demand across both metropolitan and emerging markets.
Institutional capital and private equity firms accounted for the largest share of transaction volumes at 35 per cent , followed by HNIs, family offices and private hotel owners at 27 per cent . Listed hotel companies contributed 25 per cent of activity, while real estate developers and owner-operators accounted for the remaining share.
Tier II and III cities emerged as major growth drivers, capturing nearly 40 per cent of total transaction volume. Markets including Ludhiana, Nashik, Vadodara, Udaipur and Lonavala saw increased activity across upscale and midscale segments, while luxury resort investments remained strong in destinations such as Rishikesh and Goa.
“India’s hotel investment market is reflecting a clear step-up in both investor confidence and market depth, with rising transaction activity supported by a broader mix of institutional and domestic capital. What is particularly encouraging is the continued expansion beyond gateway cities, with Tier II and III markets steadily evolving into more mature, investment-grade destinations backed by improving operating performance and scalability,” said Gaurav Sharma.
Operational hotels accounted for 69 per cent of total transaction volumes, highlighting investor preference for income-generating assets with established operating histories. Luxury hotels led the market with a 42 per cent share of transaction volume, followed closely by upscale properties at 41 per cent .
Branded hotel signings increased 23 per cent year-on-year to 51,647 keys across 424 hotels. Emerging cities accounted for 71 per cent of total branded signings by key count, underlining the continued expansion of organised hospitality beyond traditional gateway cities. Management contracts strengthened their dominance, representing 84 per cent of signings in 2025 compared to 81 per cent in the previous year.
Greenfield development also accelerated, reaching approximately 33,170 keys during the year, a 17 per cent increase over 2024 levels. Large-format hotels with more than 250 keys recorded 29 signings, up from 21 in 2024, with expansion extending beyond metro cities into Guwahati, Visakhapatnam, Indore and Pushkar.
The sector maintained momentum into 2026, with first-quarter transaction volumes reaching approximately USD 185 million, a 58 per cent increase compared to Q1 2025. Notable activity included Warburg Pincus acquiring a 41 per cent stake in Fleur Hotels, a subsidiary of Lemon Tree Hotels, with a USD 107 million commitment towards portfolio expansion.
Government-led infrastructure and land monetisation initiatives are expected to create additional opportunities across strategic micro-markets including Yashobhoomi, Neopolis in Hyderabad, Fintech City in Chennai and Jewar Airport. The FY 2027 tourism-focused budget and ongoing transport infrastructure upgrades are also expected to support future hospitality development and investment activity.
