India's hospitality sector recorded transaction volumes of $497 million across 11 deals in the first half of 2026, marking a 197% surge from $167 million in the same period a year earlier, according to a report released on Wednesday, 14 October 2026 by global real estate services firm JLL. Full-year transaction volumes for 2026 are projected to reach approximately $1.1 billion, representing a 94% year-on-year growth over CY 2025's total of $567 million.

Real Estate Developers Take the Lead

Real estate developers emerged as the dominant investor category in H1 2026, accounting for 58% of total transaction volume — a dramatic reversal from the previous year, when High-Net-Worth Individuals (HNIs), family offices, and private hotel owners led the market with approximately 54% share. Listed hotel companies contributed 31.1% of volumes, while HNIs, family offices, and private hotel owners dropped to just 8.2%.

This shift signals a deeper institutionalisation of capital flowing into Indian hospitality, as large developers increasingly view hotel assets as a core component of mixed-use and commercial portfolios.

Tier II and III Cities Drive Geographical Rebalancing

Tier II and III cities captured 60% of investment volumes in the first half, underscoring what the JLL report describes as a 'fundamental geographical rebalancing of capital deployment.' Destinations beyond the traditional metros are attracting capital as experiential leisure and emerging tourism hubs reshape investor priorities.

Gaurav Sharma, Managing Director, Hotels, India and Senior Director, Hotels Capital Markets, Asia at JLL, said: '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.'

IBC-Led Distressed Asset Sales Fuel Nearly 60% of Volumes

Transactions facilitated under the Insolvency and Bankruptcy Code (IBC) generated approximately $288 million, representing 58% of total H1 2026 transaction volume. Strong investor appetite for distressed hotel assets — unlocked through IBC resolution processes — has become a defining feature of the current investment cycle.

Nearly $445 million in strategic platform-level investments also contributed to the sector's momentum, alongside sustained signing activity of more than 29,000 keys in H1 alone.

Outlook: Competitive Bidding and Institutional Scale

Looking ahead, the JLL report projects that investor interest will concentrate on high-quality, branded assets with strong operating fundamentals in established business and leisure destinations. Institutional capital at the platform level is expected to gain further momentum as investors seek scale, operational efficiencies, and diversified market exposure.

Sharma added: '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 report frames the sector's broader appeal around India's evolving consumption story — where emerging destinations and experiential leisure are redefining investment theses for the decade ahead. With pipeline momentum and institutional conviction both strengthening, India's hospitality sector appears poised for a sustained multi-year growth trajectory.