New Delhi — 2024 has been the year for which hospitality in India shows great resilience and surge as it added over 42,000 new rooms to its already present stock.
This expansion is a testament to the sector resurgence and is able to continue investment at par-equity last year, a strong signal that we will see a firm recovery in India tourism as a market.
Seventy-seven percent of this new supply, however, was concentrated in Tier II and Tier III cities according to a recent report. It is an important milestone for growth in hospitality (expand quality accommodations with those previously ignored markets like Amritsar, Mathura and Bikaner) This further diversification from metro areas highlights the rise in demand of branded hotels in this set of emerging growth markets.
In addition to another 25 notable deals in large corporations (operational assets) for businesses and leisure destinations, 2024 saw around the same number of smaller transactions with operational properties. Perhaps half of those hotel transactions have also been centred in Tier II and Tiers cities, reinforcing the investment strategy of hotel investors seeking to accelerate growth in these markets.
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High net-worth individuals, family offices and private hotel owners were among the many players driving these deals totaling 51% of the overall deal volume. Country-wise, it was again listed hotel companies with ~34% emphasizing their expansionistic objectives.
Also, the year 2024 saw phenomenal rise in the number of greenfield projects with over 28,000 new hotel keys commissioned under them compared to previous years. The spike in greenfield development demonstrates the long-term faith that hotel developers have in India hospitality sector and sequential growth visibility it holds. In major cities, many of the country’s top hotels continue to do well while the growth in Tier II and III shows that a broad tourism/economic development across the board is taking parellel strides.
