India’s hotel investment market recorded a 197% year-on-year increase in transaction volumes during January-June 2026, reaching USD 497 million across 11 deals, compared with USD 167 million in the corresponding period last year, according to JLL’s Hotel Investment Trends in India for H1 CY 2026 report.
The report projects full-year transaction volumes to reach approximately USD 1.1 billion in 2026, marking a 94% increase over the USD 567 million recorded in 2025.
The investment landscape is undergoing a shift, with real estate developers emerging as the largest investor group and Tier II and III cities attracting a growing share of capital. Distressed-asset acquisitions, institutional platform investments and sustained hotel development activity have also contributed to the sector’s growth.
Real estate developers account for 58% of investments
Real estate developers accounted for 58% of hotel investment transaction volumes in H1 2026, emerging as the dominant investor category. This marks a shift from 2025, when high-net-worth individuals (HNIs), family offices and private hotel owners collectively accounted for approximately 54% of activity.
Listed hotel companies contributed 31.1% of transaction volumes, while HNIs, family offices and private hotel owners accounted for 8.2%.
According to Gaurav Sharma, managing director, Hotels, India, and senior director, Hotels Capital Markets, Asia, at JLL, the market has experienced a significant change in investor profiles and capital flows, with developers gaining a majority share of transactions and smaller cities attracting a larger proportion of investment.
The report also highlighted nearly USD 445 million in strategic platform investments, alongside acquisitions and continued hotel signings, as indicators of sustained investor interest in Indian hospitality.
Tier II and III cities attract 60% of investment
Tier II and III cities accounted for 60% of hotel investment transaction volumes in H1 2026, while Tier I cities contributed the remaining 40%, indicating a geographical shift in capital deployment beyond established metropolitan markets.
Transactions included luxury resorts in Kerala and Coorg, luxury hotels in Agra, Mussoorie and Noida, and upper-upscale properties in Udaipur and Jaipur.
Investment momentum continued into the second half of the year, with acquisitions reported across Ahmedabad, Bengaluru and Pune. Strategic land transactions involving approximately 420 acres in the Mumbai Metropolitan Region (MMR) and 15 acres in Goa were collectively valued at around USD 313 million.
JLL expects emerging destinations and leisure markets to remain important investment opportunities as developers and investors seek to benefit from changing travel preferences and India's growing consumption market.
IBC-led transactions generate USD 288 million
Transactions facilitated through the Insolvency and Bankruptcy Code (IBC) accounted for approximately USD 288 million, or 58% of total hotel investment transaction volumes in H1 2026.
The activity highlights investor interest in distressed hospitality assets and opportunities to acquire properties through insolvency proceedings.
JLL noted that the limited availability of institutional-grade hotel assets, combined with improving operating fundamentals and distressed-asset opportunities, could intensify competition among investors.
Operational hotels account for 70% of transaction volumes
Operational hotels across different categories accounted for approximately 70% of total transaction volumes in H1 2026. Under-construction and non-operational hotels represented 23%, while land leases accounted for the remainder.
By hotel category, luxury properties attracted the largest share of investment at 51%, followed by upscale hotels at 35%. Upper-upscale properties accounted for 12%, while economy hotels represented 2%.
The distribution indicates a strong preference for established hotel assets, particularly in the luxury and upscale segments.
Branded hotel signings reach 29,360 keys
India recorded 29,360 branded hotel room signings, or keys, by June 2026, with 74% of the signings concentrated in Tier II and III cities.
Management contracts accounted for 77% of the total keys signed, followed by franchise agreements at 22%. Lease and revenue-sharing arrangements represented the remaining 1%.
Greenfield developments contributed 13,689 keys, reflecting continued developer confidence in the sector's long-term growth prospects.
Large-format hotels with more than 250 keys also gained traction. Fifteen hotels in this category were signed during H1 2026, compared with five in the same period last year.
Established markets such as Mumbai, Bengaluru, Hyderabad and Ahmedabad continued to attract development activity. Emerging destinations, including Rishikesh, Patna, Navi Mumbai and Jaipur, also featured among the markets driving new hotel signings.
More than 5,000 branded hotel keys opened
A total of 5,048 branded hotel keys opened in H1 2026, with Tier II and III cities accounting for 71% of the additions.
The upscale segment led hotel openings with a 45% share, followed by midscale properties at 28% and economy hotels at 14%. Upper-upscale hotels accounted for 8%, while luxury properties represented 5%.
The concentration of openings in smaller cities mirrors the investment and development trends identified in the report, with hospitality operators expanding their presence beyond traditional metropolitan markets.
Hotel investment outlook remains positive
JLL expects investor interest to remain focused on high-quality branded hotels with strong operating fundamentals in established business and leisure destinations. Platform-level investments are also expected to gain momentum as investors pursue larger portfolios, operational efficiencies and greater geographical diversification.
Improving hotel performance, limited availability of institutional-grade assets and opportunities to acquire distressed properties are expected to support competition for quality assets and underpin valuations.
With real estate developers taking a larger role in transactions, smaller cities attracting a growing share of investment and hotel signings remaining strong, India's hospitality sector is expected to remain an important investment market through 2026 and beyond.
