Rise of Tier-II and III Cities in India's Hospitality Sector

India's hospitality sector in 2024 saw a shift towards tier-II and III cities, accounting for nearly half of hotel transactions. The trend expanded industry reach, with growth driven by high-net-worth investors and listed hotel companies. Greenfield projects exceeded previous years, indicating strong developer confidence.

The hospitality sector in India witnessed significant changes in 2024, with a prominent move towards tier-II and III cities, constituting nearly half of all hotel transactions, according to a report released by JLL.

Approximately 25 deals took place, focusing on operational properties in both business and leisure destinations. This shift has broadened the industry's reach to underserved markets like Amritsar, Mathura, and Bikaner.

Investor diversity grew, with high-net-worth individuals and family offices driving 51 percent of transactions, while listed hotels contributed 34 percent. Greenfield projects more than doubled from 2023, showing developers' confidence in long-term growth. Interest in Tier I markets remains strong due to robust domestic demand and commercial activity.

(With inputs from agencies.)