The luxury hotel sector is thriving in India due to increased demand from high-income households. Leading hotel chains like Lemon Tree, Hilton, and Radisson are expanding their portfolios to cater to this trend. Lemon Tree recently opened the country's largest hotel, Aurika Mumbai Skycity, and is planning on many other projects in the next 3-5 years. Hilton is introducing its iconic Waldorf Astoria brand in Jaipur by 2027 and is considering further expansion. Radisson is debuting its Collection luxury hotel and aims to grow its footprint in India, with a focus on tier II-IV markets. Luxury properties contributed 14% of overall brand signings by keys in 2022, up from 9% in 2018.
From frequent travellers to holidaymakers and even for family vacations- luxury hotel check-in is the new flavour of the season. Luxury hotels are experiencing a surge in demand from high-income households, prompting expansions by chains like Lemon Tree, Hilton, and Radisson in India. Lemon Tree is launching luxury hotels in Kasauli and Rishikesh, focusing on an asset-light model. Hilton is introducing its iconic Waldorf Astoria brand in Jaipur by 2027, while Radisson debuts its Collection luxury hotel and eyes multiple markets.
This shift is fuelled by rising consumption among India's affluent sections, evident in other segments like the increased demand for high-end homes and SUV sales, which accounted for half of all passenger vehicle sales in September.
Lemon Tree Hotels, under an asset-light strategy, recently unveiled its Aurika Mumbai Skycity, the country's largest hotel by room count, with 669 keys. The property in Kasauli and Rishikesh, along with two more planned in South India, will add 400-500 rooms over the next three to five years under the Lemon Tree brand.
Hilton, confident in India's market, plans to bring Waldorf Astoria to Jaipur by 2027. Manish Tolani, Hilton’s Vice President & Commercial Director in India, expresses confidence in expanding Hilton's luxury portfolio, leveraging strategic partnerships.
Radisson debuted its Collection luxury hotel in India, aiming to enter various gateway markets. Managing Director Zubin Saxena outlines Radisson's ambitious plan to grow from operating in 70 markets at present to 130-140 markets in the next five to ten years. This expansion aligns with Radisson's focus on tier II-IV markets, which currently constitutes half of its portfolio. He also said that 85% of demand in their hotels is domestically driven and thus boosts their confidence for making greater investments.
Luxury hotel development in India was mostly focused on popular destinations like Goa and Rajasthan till now. Hoteliers are now exploring less-charted territories such as the Andamans, Lakshadweep, and north-eastern India, aiming to replicate the success of global luxury destinations like Bali and Maldives.
The Indian luxury hotel segment currently constitutes 10-11% of total quality hotel supply. Mandeep S. Lamba of HVS Anarock notes the untapped potential of the Indian luxury segment, contributing 14% of overall brand signings by keys in 2022, up from 9% in 2018. The increased developer interest in the luxury segment is due to this potential.
In conclusion, the luxury hotel segment in India is witnessing a significant boost, driven by increased demand from high-income households. Chains like Lemon Tree, Hilton, and Radisson are strategically expanding their portfolios and entering untapped markets, reflecting the sector's immense potential and evolving consumer preferences.
This story was earlier published in Business Standard
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