JLL Asks – Why Luxury Hotel Brands Are Hot in India?




  • Why Luxury Hotel Brands Are Hot in India?

Hotel operators are looking to ride the boom in domestic travel


JLL;

India is becoming a top destination for luxury and ultra luxury hotel companies, driven by a surge in domestic travel and the growing influence of the Indian middle and upper classes.

New ultra-luxury hotel openings are set for next year in cities across the country, including from notable operators like Waldorf Astoria and Raffles.

These luxury hotels get their “ultra” from elements such as exquisite design, personalized services, Michelin-starred restaurants, and high-end spas.

The emergence of India as an ultra-luxury hotel destination can be attributed largely to the domestic market. The country had the second-fastest growing high-net-worth population in the world globally in 2022 (10.5%) and is poised to see a surge of nearly 60% over the next five years, according to JLL data.

Rising disposable incomes are being spent on travel within the country. Prior to the pandemic, foreign travelers accounted for a large majority of the country’s ultra-luxury travelers. But this has seen a significant shift, with domestic travelers now accounting for up to 70% of travelers.

This isn’t just happening in India. Across the globe, people are traveling more within their own borders, says Jaideep Dang, Managing Director of Hotels & Hospitality Group at JLL India.

“Travelers are absolutely thrilled to explore nearby resorts and indulge in luxurious destinations right within their own country,” he says. “They don’t hold back when it comes to pampering themselves, going all out to secure top-tier accommodations and create unforgettable memories that will last a lifetime.”

This change has resulted in higher average room rates of up to 30% in luxury and upper upscale segments across India’s top 12 markets, and up to 40% in key leisure markets, JLL data shows.

With improved profit margins for existing luxury properties, investors’ interest is piqued for properties and new development.

Expanding Luxury Offerings

India-based Postcard Hotel, a boutique hotel renowned for its exceptional service, is set to open one of the country’s most expensive hotels next year. Located in Ranthambore, Rajasthan, and targeting discerning travelers, the Postcard Hotel offers rooms starting at Rs. 1.95 lakh per night (approximately $2,350).

International luxury brands are also making their mark. Singapore-based Raffles recently opened in Udaipur, and Waldorf Astoria signed its first property in Jaipur. Additionally, domestic luxury brand Oberoi has announced plans for three new hotels within the country and one in Kathmandu, Nepal.

“These developments highlight the growing interest in luxury tourism and the confidence in India’s market potential,” Dang says.

As the ultra-high net worth (HNW) population continues to grow, JLL’s Evolution of Global Luxury Hospitality report predicts a further increase in ultra-luxury hotels worldwide.

In the next ten years, an additional 46,000 ultra-luxury hotel rooms are expected to open globally. The Asia-Pacific region leads the way, driven by markets like Hangzhou and Mumbai. The report identifies India as a must-watch global growth market, considering it is the world’s most populous country.

Luxury hotel development is not limited to popular leisure destinations like Goa. Heritage-rich cities such as Jaipur, Udaipur, and Agra are also experiencing growth. These locations, known for their architectural beauty, cultural significance, and unique wildlife experiences, are now attracting luxury properties.

India’s infrastructure development

India’s luxury tourism market has seen significant growth thanks in large part to the government’s focus on infrastructure development, Dang says.

Improved airport facilities, expanded airports, and enhanced road connectivity have made it more convenient for luxury travelers to access premium destinations in the country. As a result, opportunities for luxury hotels to thrive have emerged not only in leisure destinations but also in heritage-rich cities such as Jaipur, Udaipur, and Agra.

“The combination of improved accessibility, government support, and the emergence of new luxury brands and properties has positioned India as a sought-after luxury destination,” says Dang. “With continued focus on infrastructure development and the growing demand for unique experiences, India’s ultra luxury sector is poised for sustained growth in the coming years.”

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