South India emerges as key hub for hospitality industry

New Delhi: South India is emerging as a major hotspot for the hospitality and tourism industry, buoyed by rising travel demand, especially to emerging destinations and religious sites, and tourism-friendly policies of states such as Andhra Pradesh.

The acquisition of Zuri resort in Kumarakom, Kerala, by ITC Hotels, and Leela's takeover of a luxury resort in Coorg, Karnataka, this year are instances of robust industry focus on this market.

Sattva Group, which is targeting a soft launch of its Taj-branded resort in North Bengaluru, in partnership with Indian Hotels & Company Ltd in early 2027, is “actively” evaluating opportunities across Chennai, Hyderabad, and Visakhapatnam.

The company is also exploring select luxury boutique properties in smaller hill stations across South India, where experiential travel is seeing increasing demand, said Adrija Agarwal, president, Sattva Group. It is also developing a Trident hotel at BIAL aerospace park, close to the Bengaluru airport, to serve the rapidly expanding aerospace and business ecosystem in the region.

Agarwal said travel is no longer limited to solely for business or annual holidays. “People are travelling more frequently, spending more on experiences and celebrating life's milestones in increasingly meaningful ways,” she said. “Weddings, wellness, entertainment, weekend getaways and curated experiences are becoming major demand drivers.”


Amusement and theme park operator Wonderla Holidays opened boutique resort Isle by Wonderla last year, besides revamping an existing property. “Hospitality is an adjacent business to running theme parks,” said Arun K Chittilappily, executive chairman and MD, Wonderla Holidays. “Post Covid-19, the rise of staycations, frequent and shorter breaks, and social media has led to a greater interest in resorts.”

Chittilappily said the company wants to stay in its realm of leisure resorts located around theme parks and will consider other markets such as Hyderabad and Chennai.

Bengaluru is the single largest hotel development market in South India by a wide margin, with over 5,000 rooms in the pipeline, driven by the airport corridor, North Bengaluru and the GCC office boom, according to NOESIS Hotel Advisors. Bengaluru is followed by Hyderabad and Chennai.

“But Tirupati, Coorg, Mysuru, Kodaikanal, and the Kochi belt are seeing branded signings that would have been unthinkable a decade ago,” said Nandivardhan Jain, MD and CEO at NOESIS Hotel Advisors. “Spiritual tourism, weddings and drive-to leisure have converted seasonal markets into year-round markets.”

Jain termed Andhra Pradesh as the most-aggressive state in India currently, providing industry status to tourism, capital subsidies, SGST reimbursements, stamp duty exemptions, and a dedicated Tourism Land Allotment Policy.

“Industry status matters because it changes the cost of debt, and the land policy compresses approval timelines,” he said. “Those two variables kill more hotel projects in India than weak demand ever does. The result is that nearly every major chain, from Taj and Marriott to Hyatt, Oberoi and Hilton, is preparing projects in the state.”

Accelerated hotel development activity in south India is also due to enhanced connectivity with major cities across the country, a growing inclination towards religious retreats, rise in wellness getaways and industrial growth, said Deepak Jain, founder of Mayfair Consultants. Jain said he is in advanced negotiations with both international and domestic brands for new hotels in Tirupati, Varkala (Kerala), Tiruvannamalai, and Tiruchirappalli in Tamil Nadu, and other destinations in Karnataka and Andhra Pradesh.

South India is a market of 'strategic priority' for Radisson Hotel Group, said Nikhil Sharma, MD and CEO (South Asia) at the chain. “In 2026, we have signed 10 hotels across the region,” said Sharma. “The region’s diversified economy driven by technology, manufacturing, global capability centres, combined with significant infrastructure investments continue to create a favourable environment for branded hotel development.”