New Delhi: The burgeoning demand from tier 2 and 3 cities is propelling a significant upsurge in greenfield hotel investments in India. This trend underscores the promising future of the Indian hospitality industry, which is witnessing increased investments in (greenfield) hotel development. The rising disposable incomes and overall economic growth in these cities are the key drivers of this growth.
Reassuringly, the latest data from HVS Anarock indicates that greenfield hotel investments in the country have rebounded to pre-COVID levels in the first half of this year, a testament to the industry’s resilience and potential for growth.
Greenfield developments accounted for nearly 48 percent of hotel brand signings by keys in early 2024, surging to 53 percent.
The growth was driven by hotel chains expanding aggressively in tier 2, 3 and 4 cities.
Mandeep S Lamba, President and CEO of HVS Anarock, reported that this renewed interest is primarily driven by hotel chains expanding aggressively into tier 2, 3, and 4 cities, where business and leisure travel are experiencing robust growth.
Greenfield hotels refer to building new properties on previously undeveloped land, while brownfield projects involve redeveloping or expanding existing properties.
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Cities like Indore, Kanpur, Bhubaneswar, Varanasi, Udaipur, and Coimbatore are experiencing a rise in demand.
Industry experts point out that greenfield hotel developments offer a level of flexibility that brownfield developments do not. This adaptability is a key advantage, as it allows hotel chains and developers to build new properties on previously undeveloped land, unconstrained by existing structures.
The future of the Indian hospitality industry looks promising, driven by rising occupancy rates and a strong pipeline of new projects across all segments. This pipeline includes a variety of projects, from luxury hotels in major cities to budget accommodations in emerging tourist destinations.
Industry leaders say road infrastructure and connectivity have significantly improved in the last ten years. The global hospitality majors are strategically expanding their presence by developing hotels near major highways and key service stations, providing travellers with convenient and comfortable options for stays.
According to Dimitris Manikis, President of EMEA, Wyndham Hotels and Resorts, the government’s mega infrastructure push, particularly highway development, offers significant growth opportunities for the hotel industry.
Hotel investment transactions reached $93 million and are expected to reach $413 million by year-end—a 22 percent increase compared to last year, according to the latest data from JLL Hotels and Hospitality Group. Top hotel companies contributing 44 percent of the total transaction volume. They were followed by owner-operators at 30 percent and high-net-worth individuals (HNIs), family offices, and private hotel owners at 26 percent.
According to the report, the positive momentum will continue throughout the year’s second half.
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–IANS
