India’s hospitality sector has witnessed a remarkable surge in investment activity during the first half (January-June) of 2026, with transaction volumes reaching USD 497 million across eleven deals, a 197% increase compared to the USD 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 USD 1.1 billion in transaction volumes, representing a robust 94% year-on-year growth over CY 2025’s USD 567 million.

Real estate developers lead investment charge

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

“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% of investment volumes, signalling a fundamental geographical rebalancing of capital deployment,’’ said Gaurav Sharma, Managing Director Hotels, India, Senior Director Hotels Capital Markets, Asia, JLL.

“The convergence of institutional capital, evidenced by nearly USD 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, ” he added.

Tier II and III cities drive 60% of transaction activity

Tier II and III cities dominated transaction activity, representing 60% of H1 2026 volumes, while Tier I cities accounted for the remaining 40%. 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 second half has already demonstrated strong momentum, with acquisitions across Ahmedabad, Bengaluru, and Pune, plus strategic land transactions totaling 420 acres in the Mumbai Metropolitan Region and 15 acres in Goa, collectively valued at approximately USD 313 million.

Stressed assets and IBC transactions gain traction

Insolvency and Bankruptcy Code (IBC)-led transactions demonstrated strong investor appetite for distressed-asset opportunities, generating approximately USD 288 million, representing 58% of H1 2026’s total transaction volume.

Luxury and Operational Hotels Command Premium

Operational hotels across all tiers accounted for approximately 70% of total transaction volume, with under-construction or non-operational hotels representing 23% and land leases comprising the balance. The luxury segment commanded the highest share at 51% of total volume, followed by upscale properties at 35%, upper-upscale at 12%, and economy segment at 2%.

Robust Pipeline: Nearly 30,000 keys signed in H1 2026

Branded hotel signings reached 29,360 keys as of June 2026, with 74% concentrated in Tier II and III cities. Management contracts dominated with 77% of total keys, while franchises and lease/revenue share agreements stood at 22% and 1% respectively.

Greenfield hotel developments maintained steady momentum with 13,689 keys, demonstrating developers’ confidence in long-term growth prospects. Large-format hotels with over 250 keys witnessed particularly strong signing activity, with 15 such hotels signed in H1 2026 compared to just five in the corresponding period last year.

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 first half

H1 2026 witnessed branded hotel openings of 5,048 keys, with 71% concentrated in Tier II and III cities. The upscale segment led with 45% share, followed by midscale (28%), economy (14%), upper upscale (8%), and luxury (5%) segments.

Sustained momentum expected

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.