India's hospitality sector expected to attract $1 bn investments by 2028: Report

Mumbai: India's hospitality industry, which demonstrated remarkable growth during January-March 2025, is expected to attract $1 billion in investments by 2028, a substantial increase from the $340 million in hotel transactions recorded last year, a report said on Friday.

The Revenue Per Available Room (RevPAR) surged 16.3 per cent during January-March this year compared to the same period last year, global commercial real estate and investment management company JLL said in a report.

It said that the sector's strong performance continued sequentially as well with an 8 per cent RevPAR increase during October-December 2024 across India.

Investor confidence remained high, with 79 new hotel signings, totalling 9,478 keys, during this three-month period, signaling sustained expansion in India's accommodation landscape, it stated.

"India's hospitality sector continues to demonstrate exceptional resilience and growth potential, with Q1 2025 showing remarkable RevPAR growth across major markets, particularly Bengaluru's impressive 38.3 per cent increase. The robust pipeline of 79 new hotel signings representing 9,478 keys this quarter reflects strong investor confidence in India's hospitality fundamentals," JLL Managing Director, Hotels and Hospitality Group, India, Jaideep Dang said.

With JLL projecting $1 billion in investments by 2028, the industry is witnessing a transformation in the market that balances immediate performance gains with strategic long-term positioning across all tiers and segments, he added.

The report further revealed that Bengaluru emerged as the standout performer with an impressive 38.3 per cent year-on-year RevPAR growth, primarily driven by the Aero India 2025 event, which boosted both occupancy rates and average daily rates.

Delhi and Mumbai followed with strong RevPAR growth of 26.2 per cent and 21.3 per cent, respectively, supported by robust occupancy levels.

Chennai's hospitality market showed notable performance with 18.7 per cent RevPAR growth, attributed to increased corporate travel, the Annual Leather Fair, and the USICON event held at Chennai Trade Centre.

Hyderabad also posted solid results with 15.1 per cent RevPAR growth despite a slight occupancy decline, demonstrating strength in rate growth.

The development pipeline remained vigorous with 31 new branded hotels (3,253 keys) opening during January-March 2025, added the report.