- Hotel investment reached $497 million in H1.
- Smaller cities drew 60 percent of investment.
- Developers led hotel investment activity.
Hotel investment reached $497 million across 11 transactions in the first half, up 197 percent from $167 million in the same period last year, according to JLL’s Hotel Investment Trends in India for H1 CY 2026. It expects full-year investment to reach about $1.1 billion, up 94 percent from $567 million in 2025.
“India’s hotel investment market changed significantly in the first half of this year, with strong growth in transaction volumes and a shift in investor profiles and capital flows,” said Gaurav Sharma JLL managing director for hotels in India and senior director for hotels capital markets in Asia.
Smaller cities attract more capital
Tier II and III cities made up 60 percent of hotel investment, compared with 40 percent for Tier I cities. Deals included luxury resorts in Kerala and Coorg, luxury hotels in Agra, Mussoorie and Noida, and upper-upscale hotels in Udaipur and Jaipur.
Real estate developers accounted for 58 percent of investment, while listed hotel companies contributed 31.1 percent. High-net-worth individuals, family offices and private hotel owners made up 8.2 percent, down from about 54 percent in 2025. This shows a shift in the types of buyers investing in hotels.
Deals linked to the Insolvency and Bankruptcy Code accounted for $288 million, or 58 percent of total investment. About 70 percent of deals involved operating hotels, while under-construction and non-operational hotels made up 23 percent. Land leases made up the rest.
Luxury hotels made up 51 percent of investment, followed by upscale hotels at 35 percent, upper-upscale hotels at 12 percent and economy hotels at 2 percent. Investors are buying existing hotels as well as looking for deals involving distressed properties.
Sharma said institutional investment, major acquisitions and more than 29,000 hotel keys signed in the first half could support growth in India’s hospitality sector for several years.
“With limited availability of institutional-grade assets, strong operational fundamentals and IBC-led opportunities unlocking distressed asset value, we anticipate competitive bidding to intensify,” he said.
Branded hotel development expands
India added 5,048 branded hotel keys in the first half of 2026, with Tier II and III cities making up 71 percent of the new keys. Upscale hotels accounted for 45 percent of openings, followed by midscale at 28 percent, economy at 14 percent, upper-upscale at 8 percent and luxury at 5 percent.
Hotel companies signed agreements for 29,360 branded hotel keys by June 2026. Tier II and III cities made up 74 percent of the signings, showing that hotel development is expanding beyond major cities.
Management contracts made up 77 percent of signings, while franchise agreements accounted for 22 percent. Lease and revenue-share deals made up the remaining 1 percent. Greenfield projects added 13,689 keys. Fifteen hotels with more than 250 keys were signed in the first half, up from five in the same period last year.
New projects continued in Mumbai, Bengaluru, Hyderabad and Ahmedabad, as well as growing markets such as Rishikesh, Patna, Navi Mumbai and Jaipur. Hotel groups are expanding in both major cities and smaller markets.
JLL expects interest in branded hotels to continue in established business and leisure markets. Investors may also look to expand hotel groups and improve operations.
A separate NOESIS report found that institutional investors are the largest buyers in India’s hotel market, investing about $2.31 billion in acquisitions.
