 "India's hospitality sector attracts $93 million investment in H1 of 2024")
The overall hotel investments in India from January to June 2024 reached $93 million, with listed companies topping the list, clocking 44 per cent of the total transaction volumes, according to a report.
The JLL Hotel Investment Trends- India H1 2024 report stated that owner-operators secured 30 per cent of the total transaction volumes followed by HNIs, family offices, and private hotel owners at 26 per cent.
The report states that the hotel investment volumes for the whole year is expected to reach $413 million, a 22 per cent increase from 2023.
The upscale segment accounted for the largest share of the total transaction volume with 44 per cent, followed by mid-scale at 31 per cent, luxury at 23 per cent, and economy segment accounted for the rest.
During the first half of 2024, six hotel deals were completed, including operational assets in Tier I and leisure markets, as well as land leases in the airport district for greenfield development. Operational hotels accounted for approximately 72 per cent of the transaction volume, while under-construction hotels made up 23 per cent, and the remaining transactions were related to land leases, as per the report.
“The surge in investor interest for both - operating assets and land sales- illustrates the attractiveness of the investment landscape, bolstered by favourable macro-economic factors, an expanding commercial market, and improved air connectivity,” JLL said in the release, citing Jaideep Dang, managing director, hotels and hospitality group, India.
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, he added. These transactions have a total value of $70 million.
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A total of 19,442 keys were signed in H1 2024, with 83 per cent of them located in Tier-II and III cities. Management contracts accounted for the majority of signings with 89 per cent, followed by franchises at 8 per cent, and lease and revenue share agreements at 3 per cent. The number of greenfield projects in the first half of the year was around 13,700 keys, which surpassed the count for the entire year of 2023, with approximately 13,600 keys, according to the report.
Tier-I markets such as Mumbai, Hyderabad, Pune, and Chennai had hotel signings with more than 250 keys due to strong domestic demand and rising commercial activity.
Furthermore, in H1 2024, a total of 6,071 keys were added through new hotel openings, with the midscale segment capturing the largest market share at 46 per cent, followed by upscale at 29 per cent, upper upscale at 12 per cent, luxury at 8 per cent, and economy segment at 5 per cent.
According to the report, Tier-I markets account for 78 per cent of the projected transaction volumes, while Tier-II and III markets make up the remaining 22 per cent and for the remainder of 2024, the hospitality sector will continue to benefit from the favourable trends observed in its first half.