Indian Hospitality 2025: Strategic Deals, Surging Growth & Unmatched Investment Potential

Major hotel companies are treating expansion like a strategic game of chess, forging key partnerships to rapidly scale in India’s booming hospitality market.

Strategic Partnerships Accelerate Expansion

India’s hotel sector is witnessing a wave of consolidation and strategic alliances as both global and domestic brands double down on the market. Recent high-profile deals underscore this trend:

• IHCL’s Ginger Push: Tata Group’s Indian Hotels Co. (IHCL) acquired 51% stakes in ANK Hotels and Pride Hospitality for ₹204 crore, adding 135 Clarks Hotels & Resorts properties to its fold. Most will rebrand to Ginger, instantly strengthening IHCL’s midscale presence and putting it on track for 250 Ginger hotels nationwide.
• Accor & Treebo Alliance: Accor, in partnership with InterGlobe Enterprises (IndiGo airline’s parent), took a majority stake in Treebo Hotels, a tech-driven budget chain with 800+ properties across 120 cities. This move creates India’s third-largest hotel portfolio (30,000+ rooms) and targets 300 Accor-branded hotels by 2030. Treebo’s deep domestic reach and budget segment expertise complement Accor’s global brands.
• Marriott’s Series & Fern Deal: Marriott International is launching a new collection brand “Series by Marriott” focused on midscale and upscale hotels, via a partnership with Nepal’s CG Hospitality. As part of the deal, 84 hotels (~6,000 rooms) from the Fern Hotels & Resorts portfolio will join Marriott’s system. Marriott also made a minority equity investment in Fern’s parent, Concept Hospitality, marking one of India’s largest multi-unit hotel transactions. This integration gives Marriott a major foothold in India’s mid-market segment while providing Fern properties access to Marriott’s distribution and 160+ million Bonvoy loyalty members.
• Upscale Platform by GIC & SAMHI: Singapore’s sovereign wealth fund GIC invested ₹752 crore for a 35% stake in SAMHI Hotels to create a new upscale/upper-upscale hotel platform. The venture launched with 5 hotels (1,000+ rooms) and will help fuel SAMHI’s expansion while deleveraging its balance sheet. This signals rising institutional capital interest in India’s hotel assets.
• Rumored Mega-Merger: A potential merger between Radisson Hotel Group and Sarovar Hotels (owned by Louvre Hotels) is reportedly in discussion. If it materializes, the combined entity would boast the largest hotel property count in India, accelerating sector consolidation.

These moves are strategic and future-oriented, aimed at filling gaps in brand portfolios and leveraging operational synergies. Rather than slow organic growth, acquisitions offer ready access to established properties, distribution networks, and local management expertise – a “turnkey” route to scale. As IHCL’s CEO Puneet Chhatwal noted, the goal is to make Ginger the top mid-market brand to serve the 500 million new middle-class travelers emerging in the next 3–5 years. Brands are diversifying across segments and geographies, ensuring they capture demand from luxury to budget, and metro cities to tier-3 towns. This consolidation trend is bridging critical gaps in market presence and capability, positioning big players to ride India’s travel upcycle.

Midscale & Budget Segments in the Spotlight

A common thread in recent deals is a focus on the midscale and budget segment, which is expected to anchor the next wave of growth. With rising domestic travel, the demand for quality affordable hotels in India’s heartland is booming. Global majors are seizing this opportunity:

• Tech-Enabled Budget Brands: The Accor-Treebo deal brings together Accor’s brands (like ibis, Mercure) with Treebo’s lean, tech-driven franchise model. It’s a play to efficiently penetrate the budget tier using Treebo’s technology for guest acquisition and dynamic pricing.
• IHCL’s Ginger and Beyond: IHCL’s Clarks acquisition boosts its mid-market inventory overnight. The company is aggressively growing in leisure and religious destinations too – last year IHCL bought a majority stake in Tree of Life Resorts, an experiential boutique chain, to tap India’s under-served leisure travel market.
• Hilton’s Hampton & Spark Entry: Seeing India’s “budget travel” boom, Hilton signed a licensing deal with NILE Hospitality to open 75 new Hampton by Hilton hotels across emerging cities. This expands Hilton’s midscale portfolio (complementing its upcoming Spark economy hotels) to capture the “value-conscious” domestic traveler.
• Wyndham-Cygnett Partnership: Wyndham Hotels is partnering with India’s Cygnett Hotels to introduce brands like La Quinta (upper-midscale) and Registry Collection (boutique luxury) in India. The alliance will add 60+ hotels across South Asia (India, Sri Lanka, Bangladesh, Nepal) in the next decade. This gives Wyndham a faster route to scale by leveraging Cygnett’s local development pipeline.
• Homegrown Chains Expanding: Mid-market operators are eyeing smaller cities. For instance, Cygnett just signed a 100-room boutique resort in Ujjain, Madhya Pradesh, a temple town and upcoming textile hub. Inspired by Santorini’s aesthetics, this resort (opening 2026) aims to serve pilgrims and leisure travelers flocking for the Simhastha Mahakumbh 2028 festival. Such moves reflect confidence in India’s tier-2/3 potential and the government’s infrastructure investments in these areas.

By building out robust midscale portfolios now, hotel companies are positioning themselves to serve India’s huge middle class as their travel spends grow. These segments also offer high growth potential – often asset-light franchise models, quicker payback periods, and the ability to convert unbranded hotels into branded ones. The mid-market is thus a key battleground for market share and is drawing the lion’s share of partnerships and signings.

Luxury & Upscale Moves Signal Confidence

Even as midscale leads the charge, the luxury and upscale tiers are also seeing renewed investment – a sign of confidence in India’s high-end demand. Notable developments include:

• Upscale/Luxury Portfolio Deals: The Marriott–Ventive Hospitality agreement will add 7 new luxury and upper-upscale hotels (1,548 rooms) across Varanasi, Mundra, Pune, and Navi Mumbai. and Sri Lanka under brands like Ritz-Carlton Reserve, JW Marriott, and Moxy Ventive (backed by Blackstone and Panchshil Group) is investing aggressively, highlighting that global investors see value in India’s premium hotel assets. Marriott’s Asia-Pacific president noted that India is poised to become the group’s 3rd largest market in a few years, with strong appetite for luxury brands – it already has 10 JW Marriott hotels open and 18 more under construction.

• GIC-SAMHI Upscale Platform: GIC’s investment will help upgrade and expand SAMHI’s portfolio in the upper-upscale segment. This venture can acquire or build business hotels under premium brands, riding on rising corporate travel and higher spending by India’s affluent travelers. It also provided SAMHI a much-needed deleveraging, enabling further growth.
• Niche Luxury Networks Expand: Relais & Châteaux, the exclusive global association of boutique luxury hotels and gourmet restaurants, is eyeing 30–40 new properties in India that meet its high standards. Known for intimate, authentic hospitality, Relais & Châteaux’s interest in India signals the market’s coming of age for ultra-luxury experiential travel. The group is modernizing its offerings (digitization, culinary focus) while scouting Indian heritage palaces, safari lodges, and retreats that fit its 600-point criteria. This slow-but-sure expansion underscores that India’s luxury hospitality scene is now on the radar of elite international players.
• High-End Brand Debuts: Several luxury brands are making India moves via partnerships – e.g. ITC’s Mementos and IHCL’s SeleQtions (soft-brands for unique luxury hotels) are adding properties, Six Senses (IHG) opened a fort resort in Rajasthan, and Minor Hotels is bringing its Anantara brand to Jaipur. Such developments, alongside robust demand for luxury resorts in Rajasthan, Goa, Himalayas, etc., point to a thriving upscale segment.

In short, investors are betting on both ends of the spectrum: mid-market volume and top-end value. This balanced growth ensures a diversified offering – from budget-friendly business hotels to ultra-luxury escapes – catering to all traveler segments. For high-net-worth investors and family offices, luxury hotel assets in India’s tourist circuits can offer attractive long-term returns (through capital appreciation and stable rates), while midscale hotels provide scalable, repeatable models for expansion.

Robust Demand & a Supply Gap Driving Growth

Underpinning this investment rush is India’s surging travel demand coupled with a chronic undersupply of quality rooms. By the numbers:

• India had ~199,000 branded hotel rooms serving an estimated 2.5 billion domestic tourist visits (2023) and 9.65 million foreign arrivals (2024). That’s roughly 1 branded room per 12,600 travelers – one of the lowest ratios globally. The supply crunch is even more acute in leisure destinations.
• Thanks to this demand-supply mismatch, hotels are enjoying high occupancy and pricing power. In Q2 2025, India’s nationwide Revenue Per Available Room (RevPAR) jumped ~13% YoY, a double-digit growth despite macro headwinds. This was also 10% higher than the previous quarter, confirming an upward momentum.
• Average Daily Rates (ADR) have been the game-changer, rising significantly as operators optimize rates in high-demand markets. For example, Bengaluru led with a 29.4% RevPAR spike in Apr–Jun 2025, driven by strategic rate hikes and strong occupancy. Hyderabad’s ADR jumped 18.6% YoY on the back of increased corporate travel and investment activity. Major metros like Chennai, Mumbai, and Delhi also saw robust growth, aided by a mix of summer leisure travel, government events, and sustained corporate demand.
• With Indians traveling more frequently and venturing beyond big cities, Tier-2, 3 & 4 markets are emerging as growth frontiers. Destinations like Ujjain, Bhubaneswar, Lucknow, and Guwahati are seeing new hotel openings as companies race to establish presence where demand is rising but branded supply is minimal.
• Importantly, this boom is not just pent-up recovery; it appears sustainable. Analysts note that India’s rising middle class, improving air connectivity, and government initiatives (like Dekho Apna Desh to promote domestic tourism) are creating a long-term uptrend. Even geopolitical tensions and a recent air travel scare barely dented Q2 performance, underlining the resilience of travel demand.

For investors, these fundamentals mean India’s hotel sector offers both growth and resilience. High occupancy and ADR growth translate to healthy revenue flows, and the unmet demand in many markets suggests room for new developments without oversaturation. The pricing power demonstrated in 2023–24 has significantly improved profit margins across the industry, boosting confidence in hotel asset returns.

Investor Confidence & Consolidation at an All-Time High

Strong industry fundamentals have translated into renewed investor confidence, evident in the pace of deal-making and development activity:

• In Q2 2025 alone, hotel companies signed 106 new hotel agreements comprising ~13,400 keys. Much of this signing activity is concentrated in the midscale segment and in emerging markets, highlighting a collective strategic pivot toward efficiency and scale. The fact that owners and operators are committing to so many projects signals bullish sentiment on future demand.
• Multiple Multi-Hotel Deals: Big operators are increasingly opting for portfolio deals and long-term partnerships instead of one-off hotel signings. Aside from the headline acquisitions, we saw Marriott ink a 7-hotel deal with Ventive Hilton planning 75 Hampton hotels with one partner. Marriott partnering with developers (like Ventive and Prestige Group) to open clusters of hotels across brands, and Wyndham tying up with Cygnett for 60 hotels. Such multi-hotel tie-ups were rare in India until recently – now they’re becoming common as brands vie to lock in supply pipelines for the next 5–10 years.
• Capital Light Expansion: The prevailing strategy is “capitalize on partnerships over owning assets.” IHCL’s 15-hotel agreement with Ambuja Neotia Group is a prime example – a capital-light deal to manage hotels across Taj, Vivanta, Ginger brands, expanding IHCL’s footprint in Eastern India without heavy upfront investment. Similarly, asset-light models like franchising and management contracts are being embraced by both Indian and international chains, which allows faster growth with lower capital risk.
• Consolidation and IPOs: Industry leaders expect more M&As in coming years. Notably, several hotel companies have tapped equity markets (e.g., Chalet Hotels, SAMHI) or raised private capital, arming them with funds for acquisitions. With thousands of unbranded, standalone hotels in India, the pipeline for consolidation remains strong. This consolidation trend is viewed positively by investors, as larger platforms offer diversified portfolios and operational efficiencies, reducing risk.
• Private Equity & Foreign Interest: India’s hospitality is attracting global investors and PE funds like never before Blackstone, Brookfield, GIC, and sovereign funds have all made substantial hotel investments recently. Accor’s partnership with InterGlobe for Treebo, and GIC’s stake in SAMHI, show that international capital views Indian hotels as a long-term growth play. The sector’s strong post-pandemic recovery and improved corporate governance in hotel companies have further boosted investor trust.

“The industry has witnessed unprecedented growth in the last couple of quarters... strong performance and fundamentals have driven positive investment sentiment across the country. With occupancy stabilizing, ADR growth has been the real game changer – driving double-digit RevPAR growth in key markets,” notes JLL Hotels Group SVP Roopa George. She highlights that over 100 hotels (13,400+ keys) were signed in just one quarter, underscoring that investors are “continuing to see consolidation across the sector”, particularly in midscale and up-and-coming markets. In short, smart money is actively pursuing hospitality deals, emboldened by strong returns and future prospects.

Outlook – Hospitality as a Top Investment Opportunity

As Asia’s economies grow, India stands out as a compelling hospitality investment destination. The country is now the world’s fifth-largest economy and on track to be the third-largest travel market within this decade. Here’s why the Indian hotel sector remains one of the best investment opportunities today:

1. Booming Demand Base: Rising disposable incomes and a young population are fueling travel like never before. Millions of first-time travelers are entering the market each year, for business, leisure, religious trips, weddings and more. This domestic engine makes hotel demand less dependent on foreign tourists and more resilient to global shocks.
2. Chronic Undersupply: The room supply gap means new hotels can ramp up quickly. Occupancies in organized hotels are high, and unbranded alternatives (guesthouses, homestays) cannot fully match the quality and consistency travelers now seek. This environment allows branded hotels to enjoy strong pricing power and high ROI on new projects.
3. High Earnings Growth: The post-pandemic “revenge travel” has transitioned into sustained growth. Hotels across segments are reporting record revenues and profitability. RevPARs in key cities have surpassed pre-2019 levels, and operators have learned to be leaner, driving margins up. Investors can thus expect healthy cash flows from hotel assets, especially in high-demand markets.
4. Value-Add via Branding: There is immense opportunity to convert and upgrade existing properties. Many independent hotels in India are ripe for acquisition or franchising by bigger brands, which can significantly improve their performance through better marketing and technology. This arbitrage – buying unbranded and rebranding – offers investors a chance to create value.
5. Regulatory & Infrastructure Tailwinds: The government is investing in tourism infrastructure (new airports, highways, convention centers) and streamlining regulations (e.g., single-window clearances for hotel projects in some states). Even airport regulators like AERA are pushing for quality service standards, which enhances overall travel experience. As connectivity and ease of travel improve, secondary markets open up for hospitality development.
6. Exit Options and REIT Potential: With consolidation, large hotel portfolios could eventually be spun off into hospitality REITs or attract public listings, providing clear exit routes for investors. The stock market now values hotel companies at multi-year highs, reflecting confidence in the sector’s prospects. Strategic sales (like the ones we’re seeing now) also offer avenues for early investors to exit at attractive multiples as bigger fish snap up growing chains.
7. Hedge Against Inflation: Real assets like hotels tend to appreciate in an inflationary environment, and hotel rates can be adjusted dynamically (daily) to account for inflation. In India’s case, robust demand allows hotels to raise room rates above inflation, protecting investor returns in real terms.

In conclusion, India’s hospitality industry is at an inflection point – scaling up rapidly, innovating with new partnerships, and delivering strong returns. The combination of huge untapped demand, supportive macro trends, and strategic deal-making makes this sector uniquely attractive for savvy investors. As the world’s economies seek growth areas, Indian hotels shine bright as a high-potential, tangible asset class that benefits directly from the country’s economic and demographic tailwinds.

Join the Opportunity – Contact Us: At Asia Investors Society, we believe the Indian hospitality story has just begun. Whether you’re an HNI looking for stable yet high-growth assets, a real estate developer exploring joint ventures with hotel brands, or a private equity investor scouting the next big portfolio deal – the time to engage is now. Reach out to our investment advisors to discover curated hospitality investment opportunities across luxury resorts, business hotels, and emerging segments. Let’s unlock the potential of this booming sector together.

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