Rising demand drives hotel expansion plans

India’s largest hotel chains are rapidly expanding their portfolios amid record-high room rates.

- Varuni Khosla

In the last week alone, half a dozen hotel companies across India have announced new development plans, including management contracts with independent owners and launching properties signed in the past few years, to capitalize on the soaring demand for hotel accommodations.

Buoyed by hotel demand outstripping supply, many top hotel operators are signing up new properties in the first quarter of FY24. Hospitality industry consultants estimate that between 100-150 hotels could have already been signed this year.

Many of these are new developments, led by the growth in tier 2 and 3 cities, and, in some cases, are conversion properties. Take Indian Hotels Co. Ltd (IHCL), which runs the Taj chain of hotels, for instance. In the first quarter of this fiscal, it signed 11 new hotels across Delhi, Gurgaon, Indore and Guwahati, compared to 29 signed in all of FY20.