Hotel investments in India touched $401 million in 2023, which was nearly four-fold the volumes witnessed in 2022, according to the latest report by real estate consultant JLL. It said 25 per cent of the overall value of transactions involved under-construction hotels in both business and leisure destinations.
“2023 also achieved a significant milestone of 22 hotel transactions, which is the largest number of assets traded in the last decade,” the report, titled ‘Hotel Investment Trends — India 2023’, said.
It said the first quarter of 2024 witnessed a significant 80 per cent Year-on-Year increase in hotel transaction volumes, reaching $78 million.
The sector has been witnessing good surge since last calendar year (2023). A record number of hotel signings and openings took place in 2023, with 25,176 keys signed and 12,647 keys opened. There is an increasing interest in hotel development activity in Tier-2 cities, with 54 per cent of the total signings taking place in these locations, the report said.
The year 2023 saw three hotel companies successfully debuting on the stock market through their initial public offerings (IPOs). There were greenfield (fresh) projects, totaling about 13,600 keys in 2023, surpassed the figure from the previous year (8,000 keys), showcasing the enduring confidence of hotel developers in the long-term growth potential of the sector, the JLL report said.
“Furthermore, the report notes, the emergence of tourism and leisure destinations as centers for Meetings, Incentives, Conferences, and Exhibitions (MICE) activities, with the signing of three large-format hotels with a total of approximately 900 keys,” it said.
According to the report, 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 tail winds as we saw prominent hotel deals early on in this year.
The enthusiasm of the sector is further strengthened by performance of hotel stocks, which also gave confidence to a couple more hotel companies entering public markets and achieving strong valuations.
“We expect this story to continue in 2024 on back of diversified avenues of growth such as expanding commercial office markets and with development of infrastructure such as new airports, expressways, increasing pilgrimage travel leading to the emergence of new realty & tourism hotspots across the country,” stated Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.
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