Overview
India's hospitality market entered 2024 with strong structural tailwinds: rising domestic travel, pent-up leisure demand, significant infrastructure investment, and accelerating international brand expansion. This report examines the key dynamics and investment opportunities for the 2024–2025 horizon.
Demand Drivers
Domestic leisure travel volumes reached 120% of pre-COVID peaks by Q3 2024, driven by a growing upper-middle-income class with increased disposable income and changing lifestyle priorities. Business travel has recovered to 95% of 2019 levels, with MICE (Meetings, Incentives, Conferences, Exhibitions) driving disproportionate growth.
India's inbound international tourism grew 28% YoY in 2024, supported by expanded air connectivity and streamlined visa processes under the e-Visa programme expansion.
Supply Pipeline
The branded hotel supply pipeline in India stands at approximately 165,000 keys across all segments — the largest pipeline in Asia-Pacific excluding China. The mid-scale and economy segments account for 62% of the pipeline, reflecting promoter confidence in the mass-market segment.
Key supply markets in the pipeline: NCR (22,000 keys), Mumbai Metropolitan Region (18,000 keys), Bengaluru (14,000 keys), Hyderabad (11,000 keys), Goa (8,500 keys).
Investment Opportunities
India Gully identifies three primary investment themes in hospitality for 2024–2025:
- Mid-scale branded greenfield: Best risk-adjusted returns in Tier 2 cities. 16–23% equity IRR based on our project models.
- Distressed asset acquisition via IBC/NCLT: Growing pipeline of operationally viable hotels in CIRP. Acquisition discounts of 40–55% to replacement cost.
- Heritage and experiential hospitality: India's heritage hotel segment commands premium ARR and international demand. Acquisition and conversion of heritage properties in Rajasthan, Kerala, and Himachal Pradesh.
India Gully's Advisory Role
India Gully serves as transaction advisor, brand on-boarding partner, and HORECA procurement specialist across the full hospitality investment lifecycle. Our active 2024–2025 hospitality mandate pipeline spans 15+ projects across India.
