Rising travel demand is expected to drive significant expansion in India’s hospitality real estate market, creating fresh opportunities for hotel developers, investors and institutional property owners.
By The Realty Times | Real Estate News Services
Mumbai : India’s organised
hospitality sector is projected to require an additional 120 million to 125
million square feet of real estate capacity by 2035 to meet rising travel
demand, according to a report by real estate consultancy CBRE.
The anticipated expansion highlights the growing
importance of hospitality as a real estate asset class in India. Increasing
domestic tourism, business travel, leisure tourism and demand for organised
accommodation are expected to support the development of new hotels and
hospitality infrastructure across the country.
The projected requirement also presents opportunities
for real estate developers and investors to expand their presence in hotel
projects, resorts, serviced accommodation and other hospitality-related assets.
New Opportunities for Real Estate
Developers
The estimated requirement of 120 million to 125
million square feet of additional capacity by 2035 could create a substantial
development opportunity for India's real estate industry.
Developers may explore partnerships with established
hotel operators to build properties that combine real estate ownership with
professional hospitality management. Such arrangements can help developers
enter the hospitality segment while leveraging the operational expertise of
established brands.
Potential areas of expansion include business hotels
near commercial districts, hotels around airports and transport hubs, resorts
in tourism destinations, and accommodation facilities in emerging economic
centres.
The growing integration of hospitality with mixed-use
developments could also support demand for hotel space in projects combining
offices, retail, entertainment and residential facilities.
nstitutional Investors Eye Hospitality
Assets
India's organised hospitality market is becoming
increasingly relevant to institutional investors seeking exposure to
income-generating real estate assets.
Hotels can offer revenue opportunities linked to room
occupancy, average room rates, food and beverage services, and other guest
facilities. However, returns depend on factors such as location, operating
costs, management quality and prevailing market conditions.
Investors are likely to focus on professionally
managed properties with established brands, sustainable demand and strong
operational fundamentals. Partnerships between property developers, hotel
operators and institutional capital providers could support the delivery of new
hospitality projects.
Infrastructure and Execution Will Be Key
Meeting the projected demand will require more than
the construction of additional hotel buildings. Developers will need to
consider land availability, construction costs, financing, regulatory
approvals, workforce requirements and the availability of supporting
infrastructure.
The timing of new supply will also be important. An
imbalance between hotel room additions and actual travel demand could put
pressure on occupancy levels and room rates in certain markets.
Careful market research and a clear understanding of
local demand will therefore be essential for ensuring the long-term viability
of hospitality developments.
Hospitality Emerges as a Growth Avenue for
Real Estate
CBRE's projection of 120 million to 125 million square
feet of additional real estate capacity by 2035 underlines the potential scale
of India's organised hospitality expansion.
As travel demand continues to evolve, hospitality is
expected to create opportunities across hotel development, resort projects,
mixed-use properties and institutional real estate investment.
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