Hospitality Transactions in India Shift Towards Tier II, III Cities in 2024: Report

India's hospitality sector maintained growth levels similar to the previous year, with a notable shift towards tier-II and III cities, which accounted for nearly half of all hotel transactions, according to a report released on Monday.
According to a report by real estate consultant JLL, around 25 deals were recorded in 2024, mainly involving operational properties located in both business and leisure destinations.

The report highlighted a significant shift towards tier-II and III cities, which made up nearly half of all hotel transactions.

The report added that this trend has significantly expanded the industry's footprint, introducing quality accommodations to previously underserved markets like Amritsar, Mathura, Bikaner, and several others.

The report noted that 2024 witnessed a diverse investor base, with high-net-worth individuals, family offices, and private hotel owners accounting for 51 per cent of the total transaction volume.

The report also stated that listed hotel companies followed closely, contributing 34 per cent of the transaction volume, while owner-operators and real estate developers made smaller yet notable contributions at 8 per cent and 7 per cent, respectively.

The number of greenfield projects in 2024 reached 28,281 keys, surpassing the total of 13,600 keys in 2023, reflecting hotel developers' sustained confidence in the sector's long-term growth.

The report stated that Tier I cities like Mumbai, Bengaluru, Hyderabad, Pune, and Chennai witnessed hotel signings with over 250 keys, indicating continued investor interest driven by strong domestic demand and vibrant commercial activity.

 “The first quarter of 2025 has sparked a vibrant hotel transactions market, with JLL already closing two deals in Chennai and Goa,” said Jaideep Dang, Managing Director, Hotels and Hospitality Group, JLL India. He noted that investor interest in both operational assets and land parcels highlights the sector’s appeal, supported by favourable economic conditions, expanding commercial hubs, and the government's recent Budget emphasis on tourism.