India’s hotel investment market surges 197% in first half of 2026, full year volumes projected to cross $1.1B: Report

India’s hospitality sector has witnessed a remarkable surge in investment activity during the first half (January-June) of 2026, with transaction volumes reaching $497 million across eleven deals, a 197 per cent increase compared to the $167 million recorded in the same period last year, according to JLL's hotel Investment trends in India for H1 CY 2026. The momentum shows no signs of slowing, with the full calendar year 2026 projected to deliver approximately $1.1 billion in transaction volumes, representing a robust 94 per cent year-on-year growth over CY 2025's $567 million.

Real estate developers are seeing healthy traction with players such as Brigade, Prestige and the Embassy group seeing positive momentum. “The momentum in India's hotel investment market is encouraging and aligns with our long-term view of the sector. As the second largest owner of chain-affiliated hotels and hotel rooms in South India, Brigade Hotel Ventures Limited has 1,604 keys across nine operational hotels. We have planned a total investment of around Rs 3,600 crore to add nine new hotels with about 1,700 keys by FY31, which will double our portfolio to 18 hotels and around 3,300 keys,” Vinay Gupta, CEO, Brigade Hotel Ventures Limited told THE WEEK.

For Brigade, the pipeline looks great with luxury, upper upscale, upscale and upper midscale segments and includes four luxury properties. “Kerala is an important part of this growth. We have just completed the rebranding and upgrade of our Kochi Infopark property from Four Points by Sheraton to Courtyard by Marriott, which we expect will strengthen ARR at the asset, and we have two more hotels under development in the state; The Ritz-Carlton Vaikom Island and Thiruvananthapuram Marriott Hotel. Beyond the state, our Courtyard by Marriott at WTC Chennai remains on track for launch in Q3 FY27. We remain focused on our expansion plans and will continue to build a well-diversified portfolio across luxury, leisure and business segments, backed by the 40-year legacy and financial strength of the Brigade Group, which positions us well for sustained growth,” added Gupta.

Interestingly, very recently the Pension Plan Investment Board (CPP Investments) has announced an investment of ₹30 billion (C$441 million) investment in Prestige Hospitality Ventures Limited (PHVL), the hospitality platform of Prestige Estates Projects Limited (Prestige Group), one of India’s leading real estate developers. Through the investment, CPP Investments will acquire approximately 27 per cent stake in PHVL, with the majority of the capital supporting the platform’s continued expansion.

This marks CPP Investments’ first direct investment in India’s hospitality sector and builds on its growing hospitality exposure across Asia Pacific, including recent investments in Japan and Korea. PHVL owns a portfolio of luxury and premium hotels in key gateway cities across India and is well positioned for future growth through a substantial development pipeline spanning Bengaluru, Chennai, Delhi, Goa, Hyderabad, and Mumbai.

“Hospitality is an important part of Prestige’s long-term growth strategy, and we see significant opportunity to build a scaled, high-quality portfolio across India. CPP’s long-term investment approach complements our development capabilities and market understanding and together we look forward to creating a hospitality platform of scale while delivering distinctive experiences for our guests and long-term value for our stakeholders,” remarked Irfan Razack the Chairman and Managing Director of the Prestige Group.

On behalf of CPP, Hari Krishna, Head of Real Estate India and Mumbai Office Head at CPP Investments, was of the view that India’s hospitality sector, is driven by rising travel and a demand for quality accommodation. “Prestige has built a strong portfolio of assets across India and benefits from a robust pipeline built up by its established real estate platform. This investment offers an opportunity to participate in the sector’s long-term growth through a well-positioned platform, while seeking to generate attractive risk-adjusted returns for CPP contributors and beneficiaries,” said Krishna.

A few months back, Embassy Office Parks Real Estate Investment Trust (REIT) also opened a 211-key hospitality development in collaboration with New York-based hotel operator Hilton in Bengaluru.

The JLL report finds that the investor landscape has undergone a dramatic transformation in H1 2026, with real estate developers emerging as the dominant force, accounting for 58 per cent of total transaction volume. This marks a significant shift from the previous year when High Net Worth Individuals (HNIs), family offices, and private hotel owners led the market with approximately 54 per cent share. Listed hotel companies contributed 31.1 per cent of volumes, while HNIs, family offices, and private hotel owners accounted for 8.2 percent.

“India’s hotel investment market has undergone a profound transformation in the first half of this year, marked not just by exceptional volume growth but by a fundamental reshaping of investor profiles and capital flows. What is particularly compelling is the structural shift we are witnessing: Real estate developers now command majority of transaction activity, up from a minor share previously, while Tier II and III cities have captured 60 per cent of investment volumes, signalling a fundamental geographical rebalancing of capital deployment,” observed Gaurav Sharma, Managing Director Hotels, India, Senior Director Hotels Capital Markets, Asia, JLL.

He said that the convergence of institutional capital, evidenced by nearly $445 million in strategic platform investments, robust consolidation activity through marquee acquisitions, and sustained signing momentum of more than 29,000 keys in H1 alone, positions Indian hospitality for a multi-year growth trajectory. “With limited availability of institutional-grade assets, strong operational fundamentals, and IBC- led opportunities unlocking distressed asset value, we anticipate competitive bidding to intensify. The sector's appeal extends beyond current performance metrics, it is about capturing India's evolving consumption story, where emerging destinations and experiential leisure are redefining investment theses for the next decade,” added Sharma.

As per the JLL report, tier II and III cities dominated transaction activity, representing 60 per cent of H1 2026 volumes, while Tier I cities accounted for the remaining 40 per cent. High-profile deals included luxury resorts in Kerala and Coorg, luxury hotels in Agra, Mussoorie and Noida, and upper-upscale properties in Udaipur and Jaipur.

The report further highlighted that the second half has already demonstrated strong momentum, with acquisitions across Ahmedabad, Bengaluru, and Pune, plus strategic land transactions totalling 420 acres in the Mumbai Metropolitan Region and 15 acres in Goa, collectively valued at approximately $313 million.

The report further observes that the Insolvency and Bankruptcy Code (IBC)-led transactions demonstrated strong investor appetite for distressed-asset opportunities, generating approximately $288 million, representing 58 per cent of H1 2026's total transaction volume.

The report highlights that while established Tier I hubs including Mumbai, Bengaluru, Hyderabad, and Ahmedabad continued attracting development activity, Tier II markets such as Rishikesh, Patna, Navi Mumbai, and Jaipur emerged as primary growth drivers.

Over 5,000 keys opened in the first half of 2026 witnessed branded hotel openings of 5,048 keys, with 71 per cent concentrated in Tier II and III cities. As per JLL looking ahead, investor interest is expected to concentrate on high-quality, branded assets with strong operating fundamentals in established business and leisure destinations. Institutional capital in platform-level investments is projected to gain further momentum as investors pursue scale, operational efficiencies, and diversified market exposure. The continued recovery and strengthening of hotel performance metrics, coupled with limited availability of institutional-grade assets, are likely to sustain competitive bidding and support asset valuations. Supported by strong growth fundamentals, hospitality is expected to remain an attractive investment theme throughout 2026 and beyond.