Realty Firms Shift Focus to Hospitality as Travel Business Booms
Indian developers are increasingly investing in high-capex hospitality projects, merging real estate with hospitality to cater to the rising demand for quality vacation experiences.
Real EstateHospitalityTravelHotelsIndiaReal EstateAug 13, 2024
We didn't focus much on hospitality in the past as it's very capex heavy and returns take time. But, we see cycles are changing,” said Adrija Agarwal, founder of Sattva Ventures and VP, business development at Salarpuria Sattva Group. “Average room rates are improving and discretionary spends are going up. We think some of these discretionary spends will also be directed towards travel and experiences,” she added.
Agarwal is playing a key role in converting a 48 acre land parcel into an upcoming 294 key luxury Taj resort in Bengaluru. The resort is expected to come up in 2026 and the group is also considering another business hotel in Bengaluru.
As per data shared by JLL Hotels & Hospitality Group, the first half of 2024 saw the signing of 16,200 keys in tier two and three cities, a 59% hike as compared to 10,200 keys in the first half of 2023. “Developers recognize the untapped potential in these cities and aim to cater to the rising demand for quality hospitality infrastructure, presenting significant investment opportunities in the hotel sector,” said Jaideep Dang, MD, Hotels and Hospitality Group, India at JLL.
Recognising the sector's promising growth, there has been an upswing in investments from real estate companies foraying into the hospitality sector, said Nikhil Sharma, MD and ASVP, South Asia, at Radisson Hotel Group. \
Frequently Asked Questions
Why are real estate developers investing in hospitality projects?
Real estate developers are investing in hospitality projects as they see immense value in integrating hotels with branded residences and catering to the rising demand for quality vacation experiences.
Which cities are seeing a surge in hospitality projects?
Cities like Mumbai, Hyderabad, Delhi NCR, Goa, and Bengaluru are seeing a surge in hospitality projects.
What is driving the growth of the hospitality sector in India?
The hospitality sector in India is experiencing a golden era driven by enhanced infrastructure, high demand, and increased consumption of quality hospitality.
Who are some of the key players in the hospitality sector in India?
Some of the key players in the hospitality sector in India include Marriott International, Radisson Hotel Group, and Oyo.
What is the expected growth in the hospitality sector in India?
The hospitality sector in India is expected to see significant growth, with developers recognizing the untapped potential in tier two and three cities and aiming to cater to the rising demand for quality hospitality infrastructure.
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