India to Lead APAC in New Hotel Openings Until 2026
GRI Club India
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India's hotel industry has experienced a remarkable resurgence in recent years, recovering from the pandemic-induced lull. This growth is driven by both leisure and business travel, along with the rising popularity of spiritual tourism, which is fueling demand in several emerging cities across the country.
🏨 According to the Q2 2024 Asia Pacific, excluding China (APEC) Hotel Construction Pipeline Trend Report by Lodging Econometrics, India is set to drive 25% of hotel openings in the region this year and sustain its lead in new developments through 2026. Closing the quarter with a record 610 projects and 75,280 rooms in development, the country now accounts for 30% of the total hotel pipeline in the APEC region.
JLL’s Hotel Momentum India (HMI) Q2 2024 report highlights a 4.8% growth in RevPAR, primarily driven by an increase in Average Daily Rate (ADR). Despite this growth, occupancy levels dipped in the second quarter, attributed to summer vacations and a slowdown in corporate travel.
🔹 The sector’s booming status prompted major real estate developers to diversify into hotel projects, leading to over Rs 10,000 crore in total investments in the industry.
The Indian Hotels Company Limited (IHCL) continues to lead the sector, signing 16 new hotels and opening six properties in Q1 FY25, spanning luxury, upscale, and mid-market segments, reflecting growing demand for diverse hospitality offerings nationwide.
🛎️ Investment momentum is also strong, with JV Ventures partnering with Terminus for a USD 200 million hotel development, while Atmosphere Living plans to invest Rs 500 crore in ultra-luxury real estate.
Strategic partnerships remain crucial, as seen in Brigade Group and Accor’s launch of their fourth hotel, Ibis Styles Mysuru, aimed at capturing the expanding mid-market segment.
🚀 Meanwhile, Embassy Group’s hospitality arm Olive is raising USD 20 million to fuel growth and plans to introduce a franchise model by 2025, further expanding its footprint.
The rapidly evolving hospitality sector will be one of the focal points at India GRI 2024, the leading real estate gathering in the country, taking place on October 16th in Mumbai. Don’t miss this exclusive chance to connect with top industry leaders and participate in high-level discussions shaping the future of the industry!
NEW Report: Europe & APAC Cross-Border Capital Opportunities
The scenario for cross-border real estate investment between Europe and the Asia-Pacific region is full of potential. This is driven by improving economic conditions in Europe and APAC’s burgeoning market fueled by urbanisation and new initiatives that offer lucrative opportunities for foreign investors.
🔹 The first edition of "Europe & APAC: Cross Border Capital Opportunities," hosted by GRI Club Europe and GRI Club India, and co-hosted by the Apex Group, explored capital flow trends between these major regions.
GRI Club’s latest report was compiled following discussions among senior investors, lenders, operators, and real estate leaders, covering global capital allocation prospects, fund management strategies for overcoming challenges, and much more.
Q2 Real Estate Sentiment Index Shows Cautious Optimism
Knight Frank and NAREDCO have just released the Q2 2024 edition of the Real Estate Sentiment Index, highlighting the evolving perspectives of key industry stakeholders. The report reveals that the Current Sentiment Score dropped from 72 in Q1 2024 to 65 in Q2 2024, reflecting a more cautious standpoint in response to global economic uncertainties and potential policy shifts.
Similarly, the Future Sentiment Score decreased from 73 to 65. Despite this dip, both scores remain within positive territory, driven by solid fundamentals and continued growth in the residential and office sectors.
🏘️ The residential market outlook remains favourable, with 51% of stakeholders anticipating an increase in sales and 61% expecting more residential launches. Price expectations are largely hopeful, with 63% predicting increases. However, 36% expect stable prices, and 25% foresee a potential sales decline.
🏢 The office market is similarly stable and positive, with 63% of respondents expecting increased leasing activity and 67% predicting rental growth. Confidence in the sector’s expansion is further supported by 47% of respondents projecting an increase in new office supply.
The report also emphasises a balanced economic perspective, with 59% of respondents expressing optimism. Funding availability is expected to rise, with 51% predicting growth, driven by the belief in the financial sector’s sustained support for real estate investments.
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Although the sentiment index reflects a decline from earlier highs, the market’s resilience is clear, underpinned by strong performance across key sectors and sustained confidence in India’s future prospects.
Foreign Partnerships with Gaurav Karnik
“India is in a very good spot. It's got a very strong economy,” stated Gaurav Karnik, Partner & National Leader Real Estate at EY, when addressing foreign investment attractiveness. He expressed hope that, going forward, foreign investors coming through funds will start taking direct equity or debt exposure in India.
🔹 In a discussion with Gustavo Favaron, CEO & Managing Partner of GRI Club, at the GRI Funding Opportunities India 2024, Gaurav highlighted the significant impact of regulatory changes, particularly REITs and RERA, in transforming India's real estate landscape and improving investor confidence.
“Indian developers will be happy to partner with foreign capital” Gaurav says, talking about the readiness of domestic companies to attend to the needs of international players, emphasising that developers have modernised over the years and have become more professional.
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