Indian Hotel Sector Soars: RevPAR Up 23%, Tier II-III Cities Lead

• The top six markets witnessed year-over-year growth in Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR).
• Hyderabad recorded the highest RevPAR growth at 23.3%, driven by a strong increase in ADR.
• Bengaluru showed high RevPAR growth, supported by increases in both ADR and occupancy. 
•  Q4 (October-December) 2024 saw 99 hotel signings, totaling 11,943 keys.
• Hotel transactions in 2024 were valued at approximately INR 2,900 crore.
• Tier II and III cities claimed 50% of transactions, with HNIs, family offices, and private owners contributing 51% of investment volume.

MUMBAI, 25 MARCH, 2025: The Indian hospitality sector demonstrated strong growth in Q4 (October-December) 2024, with the top six markets experiencing year-over-year increases in both Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR).

Hyderabad emerged as the standout performer, recording the highest RevPAR growth at 23.3%, primarily driven by a significant increase in ADR. Bengaluru also showed impressive resilience, with high RevPAR growth supported by improvements in both ADR and occupancy rates.

The quarter saw substantial activity in hotel signings, with 99 new hotels totaling 11,943 keys being signed. This indicates continued investor confidence and expansion in the Indian hospitality market. In terms of transactions, the total value for 2024 was estimated at approximately INR 2,900 crore, highlighting significant investment in the sector.

Interestingly, Tier II and Tier III cities accounted for 50% of the transactions, predominantly involving unbranded midscale properties. This suggests a growing interest in developing hospitality infrastructure beyond the major metropolitan areas. The investment landscape saw diverse participation, with High-Net-Worth Individuals (HNIs), family offices, and private owners contributing 51% of the investment volume.

Q4 2024 saw a significant shift towards Tier II and III cities, which accounted for 75% of new hotel signings. The midscale segment dominated, representing 53% of hotel openings and 44% of signings. Uttar Pradesh led in signings, with 1,744 keys. Interestingly, HNIs, family offices, and private owners contributed 51% of the investment volume, indicating a growing interest from individual investors in the hospitality sector.

New hotspots are emerging in Delhi's Yashobhoomi and Mumbai's airport district, signaling potential for future growth in these areas. Overall, the Q4 2024 report paints a picture of a robust and expanding Indian hospitality market, with growth spread across various cities, tiers, and segments, suggesting a positive outlook for the industry.

“Hospitality markets in India saw an unprecedented activity in 2024. Backed by a strong domestic travel demand both in business and leisure segments, hotel investments saw several new groups attracted towards building new hotels especially in tier II and tier III towns. We witnessed 367 new hotel signings and 154 new hotel openings last year. This represented 14% of growth over 2023. This is encouraging news for the Hotel industry ecosystem as it will boost construction activity, lending activity and finally providing jobs across the spectrum," stated Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.

About JLL India

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 15,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in