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Smaller Cities Driving Lodge Increase in India



Skift Take

Because the Indian traveler drives demand to lesser explored home locations, main manufacturers are discovering alternatives to develop within the Indian hinterlands.

The hospitality business in India is present process a fast growth. In line with information from actual property providers agency JLL, a complete of 131 motels opened within the nation between January and September 2023, with one other 182 properties signed. That’s over 8,200 keys, with greater than 16,000 within the pipeline. 


This increase within the hospitality business in India has moved past tier 1 cities. The JLL information reveals that in 2023, as many as 217 new motels in tier 2 cities and 176 motels in tier 3 cities have been opened and signed, whereas this determine stood at solely 61 in tier 1 cities. 

Latest openings in tier 1 cities embrace Taj The Timber, Mumbai; Moxy Bengaluru Airport Status Tech Cloud; and Fortune Park East Delhi. 

In much less explored tier 2 markets, there have been a number of openings, together with: 

  • InterContinental Jaipur Tonk Highway in Jaipur, Rajasthan
  • Radisson Blu Pune Hinjawadi in Pune, Maharashtra
  • Le Méridien Amritsar in Amritsar, Punjab
  • Vivanta Jammu Metropolis Centre in Jammu, Jammu and Kashmir
  • Vacation Inn Guwahati in Guwahati, Assam
  • Grand Mercure Agra Fatehabad Highway in Agra, Uttar Pradesh
  • Lemon Tree Lodge in Bhopal, Madhya Pradesh

Smaller locations witnessed the openings of: 

  • Ginger in Durgapur, West Bengal
  • Gorbandh Palace, an IHCL SeleQtions resort in Jaisalmer, Rajasthan
  • Park Inn by Radisson in Ayodhya, Uttar Pradesh
  • Fortune Park in Aligarh, Uttar Pradesh
  • Lemon Tree Lodge in Dapoli, Maharashtra

Motion In the direction of Distant Areas

Tier 1 cities in India have a major stage of penetration for all manufacturers and throughout all resort classes from finances to luxurious. Smaller cities have been catered to by non-uniform and unbranded motels. 

Nevertheless, as much less explored smaller cities start getting fast infrastructure upgrades, manufacturers see a chance for enterprise. This has been enhanced by federal schemes corresponding to ‘Dekho Apna Desh’ (Discover Your Nation) that target highlighting distinctive experiences of the Indian hinterlands. 

In an earlier interview with Skift, Ranju Alex, space vp for South Asia, Marriott Worldwide, stated Marriott is increasing into tier 2 and three cities in response to the altering habits of shoppers.

Final 12 months, on the signing of IHG Lodges and Resorts’ voco Amritsar Airport, Sudeep Jain, managing director for South West Asia, stated the corporate is strategically increasing in secondary markets throughout India.


The expansion in distant components of the nation has additionally been pushed by a increase in spiritual tourism in locations corresponding to Ayodhya, Katra, and Sirmaur, and elevated infrastructural concentrate on the Northeastern states.

Tailoring Choices to Mass Market

This growth into smaller cities corresponds with the resort class seeing probably the most exercise – midscale. This fashioned greater than 55% of each newly opened in addition to signed motels throughout 2023, JLL information revealed.

The Lodge Affiliation of India has famous in its report, Imaginative and prescient 2047, that between 2012 and 2019, there was an inflow of round 20 midscale manufacturers. 


KB Kachru, chairman emeritus and principal advisor, Radisson Lodge Group, South Asia, stated, “The rising demand for branded lodging in rising markets, significantly in tier 2 and three cities, highlights the nation’s urge for food for high quality hospitality experiences.” He added that about 50% of the group’s portfolio is in these markets. 

In November 2022, Radisson launched India-specific midscale model Park Inn and Suites by Radisson to scale the model in tier 2 to tier 5 areas. 

Indian Lodges Firm (IHCL) can also be developing with a full-service model particularly tailor-made to the mass market in tier 2 and three cities. 


Throughout a current convention name, Giridhar Sanjeevi, IHCL’s govt vp and chief monetary officer, talked concerning the potential of untapped markets. “Given the scale of India, the alternatives are immense. Now we have opened in Tawang, for instance. These are all virgin territories. This has occurred due to the expansion of infrastructure growth in India,” he stated. 

The Skift India Summit in Delhi-NCR from March 19-20 will shine a lightweight on the hospitality increase in India.

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Discounted value of $495 (Solo) and $445 (Group) for a restricted time solely. Full-price tickets are $745 (Solo) and $695 (Group).


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