Deals worth $225 million have already been closed in January-June this year, more than doubling from $93 million recorded in the same period of 2024, according to data from property and real estate consultancy JLL Hotels and Hospitality Group shared exclusively with Mint. Nearly 50% of the deals that happened this year came from transactions that were initiated last year – when the industry saw strong momentum in hotel sector transactions, the company said. In the entire 2024, deals worth $340 million were concluded, slightly exceeding 2023’s $337 million.

A large chunk of the action in the first half of 2025 — or about 60% by value– has been in the upper-upscale to luxury segment, with transactions driven by hotel owners, wealthy individuals and developers who continue to see long-term value in India’s under-served hotel market. 

An upscale property is a regular 5-star while upper-upscale is a luxury 5-star. An upscale hotel offers premium comfort and amenities, while an upper-upscale hotel provides a more refined, full-service experience with higher-end facilities and service levels.

Upper-upscale and luxury segments are high-end hotels offering premium amenities, and include brands like JW Marriott, Oberoi and Taj. In fact, by 2028, JLL Hotels and Hospitality expects India to see $1 billion in hotel investments, representing a significant three-fold increase from 2024.

“The industry is in a rare position right now — hotel performance has been strong for a sustained period, and barring a few hiccups in April and May, operational metrics have hit all-time highs. That’s pushed both hotel and land prices up significantly,” said Jaideep Dang, managing director at JLL Hotels and Hospitality, in a conversation with Mint. “At the same time, several hotel companies have raised capital through IPOs, public markets, and private equity, and are sitting on dry powder. But these top 10 institutional buyers aren’t in a hurry to deploy capital, which could cause qualified transactions to plateau in the second half of the year.”

The top 10 companies with fresh institutional capital referred to by Dang include Schloss Bangalore Ltd (Leela Hotels), SAMHI Hotel Investments, Juniper Hotels Ltd, Apeejay Surrendra Park Hotels, Ventive Hospitality, Brigade Hotel Ventures, Prestige Hospitality Ventures Ltd, as well as existing players like Oberoi, ITC and Indian Hotels company Ltd.

Dang added that around ₹200 crore worth of deals are expected in the July-September quarter. “There is a lot of focus on new constructions right now and many players are building new hotel assets across the country. In about two or two-and-a-half years, a lot of qualified capital will be deployed in some of these hotels and deals will continue to happen in tier I markets majorly,” Dang said.

“There is now a sea change in the way transactions in the hotel sector happened in the past decade or so. Earlier a lot of hotel owners, particularly HNIs, were holding out for greater capital appreciation but now with development of new markets, a lot of money being pumped into the sector, more consolidation is expected to drive better distribution,” K.B. Kachru, Hotel Association of India president and chairman, Radisson Hotel Group in South Asia, told Mint. 

“What will drive this is that all the new investors — both institutional and PE-backed — are looking for a longer term investment and growth of the sector. Most new investors are aligning their plans with Govt’s overall vision. It’s rare that that investors are now looking to buy and flip in the short run. Consolidation in the sector will also drive better top and bottom lines for hotels,” Kachru added.

One of the biggest deals so far this year has been by K. Raheja Corp’s Chalet Hotels Ltd’s in February. Chalet Hotels acquired The Westin Resort & Spa, Rishikesh, at ₹530 crore. with the acquisition of this 41-key resort, Chalet marked its entry into the Uttarakhand leisure market. The first quarter of calendar year 2025 also saw hotel transactions in markets such as Chennai and Goa. Samhi Hotels sold its property in Chennai for ₹53 crore in February to GreenPark Hotels, while Kanakia Group’s Cineline India sold a Hyatt Centric Goa hotel for ₹270 crore in March.

New projects continue to roll in as well. Earlier this month, Ludhiana-based Vardhman Group signed up with Marriott to open a 200-room hotel in the upper-upscale category in the coming years.

Last year too saw some large-ticket transactions that kept the momentum going. The year saw approximately 25 deals, primarily involving operational properties in both business and leisure destinations. Chalet had picked up the Courtyard by Marriott Aravali Resort in Delhi NCR for ₹315 crore, while Hansoge Enterprises sold a 175-room under-construction hotel near the Bengaluru airport for ₹150 crore. The same year in August and September, Samhi Hotels Ltd acquired a 142-room, 4-star hotel in Bengaluru’s Whitefield area for ₹205 crore, while Juniper Hotels secured a ₹280-crore deal to buy a 220-room, five-star hotel near Bengaluru airport from Lulu Group’s Twenty Fourteen Hotels India Pvt. Ltd.

Hotel openings in 2025 a little slower

JLL said hotel openings slowed slightly in the first quarter of 2025 though, with 31 new hotels opened compared to 36 during the same period last year. But the number of rooms that became operational or came into the total supply pipeline went up significantly: around 3,250 rooms versus 2,300 in the same period last year, which implied that new hotels are being built with more rooms, possibly based on changing demand. India has about 200,000 branded hotel rooms and is expected to reach 300,000 by 2030, according to industry data.

But so far this year, far fewer hotel signing have taken place in the first quarter of the calendar year– 79 compared to 90 a year ago, and the number of rooms signed stayed more or less the same at around 9,500 versus 9,700. 

For context, a “signing” is when a hotel company like Marriott or Oberoi enters into an agreement with a property owner or developer to operate a hotel under one of their brands. The hotel itself may still be under construction and will open a few years later. There has been a rise of 11% in the room count of the average hotel, which could imply that larger hotels are being planned for the future.

India’s hospitality sector has been seeing renewed interest from investors. Mint reported earlier that more than ₹10,000 crore has been committed since 2023 towards new hotels, acquisitions and upgrades — funded through IPOs and internal capital. Despite a growing base of travellers, India still has only around 200,000 rooms, compared to over seven million in China.

Prashant Biyani, market analysist at Elara Capital, told Mint that recent merger and acquisition deals in the sector reflect the confidence of the hoteliers in the longevity of this upcycle. “Also, companies want to capitalise on the expanding middle class, booming domestic travel across all economic background. There is a major shortage of branded hotels in tier II and III locations as well, and so the outlook for hotels remains strong,” he said. 

According to Elara Capital, the July-September quarter will see strong operational performances from hotels, supported by a line-up of events and seasonal demand drivers across the country including several long weekends.