Luxury Sector Set for a Strong Year as Investment Grows Exponentially

During the same period last year, investment in the luxury hotel sector increased by around 200% this year, reaching approximately USD 497 million across 11 hotel deals. Property investors accounted for the largest share of buyers at 58%, followed by major hotel companies at around 31%.

Tier 2 and Tier 3 cities accounted for 60% of total hotel investments. Investors are increasingly targeting luxury resorts in destinations such as Kerala, Coorg, Agra and Udaipur. Luxury hotels accounted for 51% of investments, followed by upscale hotels at 35%. Meanwhile, around 70% of the investment went towards acquiring existing, operational hotels.

Forecasts suggest that total investment could reach USD 1.1 billion, nearly double the amount recorded last year. Legal debt resolution drove 58% of investment deals in early 2026, accounting for approximately USD 288 million.

New hotel projects are also gaining momentum. By June 2026, hotel brands had signed agreements covering nearly 29,360 new rooms. Most of these rooms are expected to be developed in Tier 1 and Tier 3 cities. In early 2026, approximately 5,048 new hotel rooms officially opened to guests.