India’s hospitality sector continued its strong investment momentum in the first quarter of 2026, with hotel-related transactions rising 58 per cent year-on-year to reach approximately USD 185 million, according to the latest report released by JLL.
The report, titled Hotel Investment Trends in India: 2025, highlights growing investor confidence in the country’s hospitality industry as demand for business travel, leisure tourism, branded accommodation and mixed-use developments continues to accelerate across both metropolitan and emerging markets.
According to JLL India, the hotel sector attracted USD 185 million in investments during the January-March 2026 period, compared with USD 117 million recorded during the corresponding quarter last year. The consultant noted that the surge follows a strong performance in 2025, when annual hotel investments climbed 67 per cent to approximately USD 567 million.
Hospitality sector attracts institutional and private capital
The report indicates that investment activity in India’s hotel industry is increasingly being driven by institutional investors, private equity funds, listed hotel companies and high-net-worth individuals seeking exposure to the country’s rapidly expanding travel and tourism economy.
One of the most significant transactions during the first quarter involved global private equity firm Warburg Pincusacquiring a 41 per cent stake in Fleur Hotels, a subsidiary of Lemon Tree Hotels. The investment, valued at approximately USD 107 million, is expected to support the expansion of Fleur Hotels’ owned hospitality portfolio across India.
JLL stated that transaction activity during the quarter included acquisitions of operational hotel assets, platform consolidations and land monetisation deals, reflecting the increasing maturity of India’s hospitality investment landscape.
The consultancy also observed that private equity investors and institutional capital providers are actively exploring opportunities to acquire large hotel portfolios, particularly in high-growth urban and leisure markets.
Airport-led development emerging as key investment driver
According to the report, new hospitality investment opportunities are also emerging around major infrastructure and airport-led developments across India. JLL identified projects linked to Yashobhoomi Convention Centre, Neopolis in Hyderabad, Fintech City in Chennai and Noida International Airport as key future growth corridors for hotel development and investment activity.
The consultant noted that government-backed land auctions and infrastructure expansion are encouraging hospitality developers and investors to target emerging micro-markets with strong long-term tourism and business travel potential.
Tier 2 and Tier 3 cities gain investor attention
While Tier 1 cities continued to dominate hotel investment activity with nearly 60 per cent of the total transaction volume during 2025, smaller cities and emerging tourism destinations are increasingly attracting attention from developers and hotel operators.
Tier 2 and Tier 3 cities collectively accounted for around 40 per cent of total investment activity last year, reflecting the broader geographic expansion of India’s branded hospitality sector.
Industry analysts believe improving air connectivity, rising domestic tourism, infrastructure upgrades and growing demand for organised accommodation are supporting hotel development beyond traditional gateway cities.
Hotel expansion pipeline remains strong
The report also highlighted continued growth in India’s branded hotel supply pipeline. During 2025, the country witnessed the opening of 103 branded hotels representing approximately 8,990 keys.
At the same time, hotel signings reached record levels, with 424 branded hotels accounting for 51,647 keys signed during the year — a 23 per cent increase compared to the previous year.
The expansion reflects rising confidence among domestic and international hotel operators in India’s long-term tourism and business travel outlook, particularly as the country experiences strong growth in domestic leisure travel, MICE tourism, religious tourism and international arrivals.
Outlook remains positive for 2026
JLL expects investment momentum in India’s hotel industry to remain strong throughout 2026, supported by improving liquidity among listed hotel companies, increasing institutional participation and the anticipated capital market entry of additional hospitality operators.
The consultancy added that India’s growing position as a global business destination, combined with major infrastructure upgrades and evolving consumer travel preferences, is likely to sustain long-term demand for hotel assets across luxury, upscale, midscale and lifestyle hospitality segments.
The report underscores the increasing attractiveness of India’s hospitality sector as investors continue to view hotels as a resilient long-term asset class aligned with the country’s expanding tourism economy and infrastructure-led growth story.
