Tamil Nadu Emerges as a Fast-Growing Luxury Hotel Market

Tamil Nadu’s luxury hospitality sector is entering a new growth cycle, driven by the state’s strong industrial ecosystem, rapid office expansion, and rising business and leisure travel.

Chennai has emerged as one of India’s most attractive hotel markets, supported by increased corporate activity, IT corridor expansion, and improving connectivity.

Over the next two to three years, the city is expected to add nearly 2,000 new rooms, reflecting accelerated investment from leading global and Indian hospitality brands.

Key Highlights

• Chennai set to add nearly 2,000 luxury hotel rooms in 2–3 years
• Major global and Indian brands accelerate expansion across Tamil Nadu
• Strong industrial growth and rising travel demand fuel hospitality boom

Major players—including IHCL, Marriott, Hyatt, IHG, and Radisson—are strengthening their footprint across Tamil Nadu to tap into surging demand from corporate travellers, MICE (Meetings, Incentives, Conferences, Exhibitions), and domestic leisure segments. Brigade Hotel Ventures Limited (BHVL) is spearheading some of the biggest new developments, with three upcoming Chennai properties: Grand Hyatt Chennai ECR (200 rooms), JW Marriott Chennai OMR (250 rooms), and Courtyard by Marriott Chennai World Trade Centre (45 rooms). These additions will deepen Chennai’s position as a fast-evolving luxury hospitality hub.

Mandeep S. Lamba, President & CEO (South Asia), HVS ANAROCK, noted that Tamil Nadu currently has over 13,600 branded hotel keys, with around 3,900 more expected by 2030. “Chennai alone accounts for over 2,600 of these upcoming keys, followed by Hosur, Salem, and Coimbatore,” he said. “The city has been one of India’s top performers, maintaining occupancy levels of 74–76% in January–September 2025, up more than three percentage points year-on-year. Average Room Rates have climbed nearly 11% to INR 7,800–INR 8,000.”

“The Courtyard by Marriott Chennai World Trade Centre is in the fit-out stage and expected to launch by the end of next year, while the other two projects are in design development,” said Manoj Agarwal, COO – Hospitality, BHVL. The group currently operates the Holiday Inn Chennai OMR IT Expressway with 202 rooms.

IHCL continues to expand its legacy footprint in the state. “For over five decades, IHCL has been synonymous with Tamil Nadu’s hospitality story, starting with Taj Coromandel—the state’s first luxury hotel,” said Suma Venkatesh, Executive Vice President – Real Estate and Development, IHCL. “Today, we have 32 hotels, including 15 in the pipeline across our brands.” IHCL recently announced a new Taj hotel on ECR in Chennai, a greenfield project developed in partnership with MGM Healthcare.

According to V.S. Sridhar, Executive Managing Director, Cushman and Wakefield, Chennai, “Several major projects are underway, including new properties by Marriott and Ritz-Carlton. There are also indications that the Singapore-based Raffles brand may soon enter the market. Over the next three to four years, Chennai is likely to see an addition of 1,500–2,000 luxury hotel keys.” He added that the surge in demand is being driven by strong corporate, manufacturing, and MICE segments, with room rates rising by 15–20 percent.

The broader state is benefiting from escalating industrial investment, expanding manufacturing clusters, airport upgrades, and improved highway connectivity, all contributing to rising hotel occupancy and a premiumisation trend across leisure destinations. Tamil Nadu’s strong cultural tourism base—from heritage circuits to temple towns—further complements luxury growth, allowing brands to blend business and leisure markets.

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As Tamil Nadu consolidates its position, it is poised to become one of India’s most influential luxury hospitality markets, powered by sustained economic momentum, infrastructure progress, and evolving traveller preferences.