Written By: Gouri Ghosh

The hotel and tourism sector in India is exploding! It is anticipated to reach $75 billion by 2025, driven by both domestic and foreign tourism. The demand for high-quality hospitality services continues to rise due to rising disposable incomes and urbanisation. In India, a hotel franchise are a great opportunity for prospective business owners. 

Strong brand support, tested business strategies, and reduced risks are all provided via franchising. It's a quick way to get into the lucrative hospitality industry and make a lot of money.

The best hotel franchise opportunities in India for 2025 are covered in detail in this blog. Based on industry trends, franchise support systems, and profitability, we will help investors make the best decision. Together, let's unleash the hotel industry's potential in India!

What Makes a Great Hotel Franchise?

While choosing the best hotel franchise in India, here are a few ingredients that differentiate the best from the rest. Let's break it down so you know what to look for.

Key Attributes of a Winning Hotel Franchise

• Brand Recognition and Reputation: A known brand attracts visitors. People believe in big brands due to consistency in quality. Reflect on brands like Marriott or Taj-they do not sell rooms; they sell experiences.
• Proven Business Model and Support System: A good franchise does not keep you guessing in the dark. They provide a tested business model and full support, from operations to marketing. Hence, you get to do less trial and error, and faster results.
• Profitability and Scalability: A good franchise makes money and expands; it doesn't just break even. Choose franchises with extremely high occupancy percentages and scope for expansion across cities or other markets.
• Training and Development Programs for the Franchisee: Though you may not know much about hospitality, a good franchise will take care of you. Strong training programs teach you to grasp the business, run the operation with staff, and deliver the greatest guest experience possible.
• Market Demand and Location Strategy: Location can make or break a hotel. The best hotel franchises in India have some ways to pick up high-demand areas, like tourist hubs or business districts, ensuring steady bookings.

India's Top 10 Hotel Franchise Opportunities for 2025

Now is the ideal time to invest in a hotel franchise because the Indian hotel sector is flourishing. The top hotel franchise options in India for 2025 will be discussed below, along with information on their costs, advantages, and value.

Taj Hotels

• Established: 1903
• Investment: ₹25–₹50 crore
• Franchise Fee: Negotiable (based on the management contract)
• Royalty Fees: Negotiable

Why Invest

• Legendary Heritage: Taj is India's oldest and most esteemed hospitality brand, symbolizing class and heritage
• International acclaim: The brand enjoys global recognition and operates a strong domestic and international high net worth travelers segment.
• High standards of premium services: These properties are known for distinctive customer experiences. Taj sets standards in luxury and quality service.
• High Occupancy Levels: Located in iconic tourist and business places, Taj Hotels have always maintained a high level of occupancy.

Marriott International

• Year Established: 1927
• Franchising since: 1960
• Initial Investment: ₹50–₹100 crore
• Franchise Fee: ₹50–₹75 lakh
• Royalty Fees: 5% of gross revenue

Why Invest

• Global Market Leader: Marriott is one of the most recognized and trusted hospitality brands across the globe.
• Wide Portfolio: The brand comes with an option across segments, from affordable Courtyard hotels to luxury Ritz-Carlton properties.
• Strong Loyalty Programs: Marriott Bonvoy boasts millions of members worldwide, which promotes higher repeat bookings.

Radisson Hotel Group

• Year Established: 1960
• Franchising since: 1980
• Initial Investment: ₹10–₹30 crore
• Franchise Fee: ₹35–₹45 lakh
• Royalty Fees: 4%–6% of gross revenue

Why Invest

• Renowned Brand: Radisson has a solid brand presence in India and more than 120 countries.
• Diverse Portfolios: Its portfolio varies from budget-friendly Park Inn to luxury Radisson Blu hotels.
• Mid-Tier and Luxury Focus: Mid-tier and luxury are high-growth areas in India and therefore offer good returns.

OYO Rooms

• Year Founded: 2013
• Franchise Since: 2014
• Initial Investment: ₹10–₹50 lakh
• Franchise Fee: ₹2–₹10 lakh
• Royalty Fees: 2%–3% of gross revenue

Why Invest

• Tech-First Approach: OYO utilizes AI and data analytics for dynamic room rate pricing to ensure maximum occupancy.
• Low Investment: As compared to the luxury brands, it has low entry costs, making an easy investment opportunity even for smaller investors.
• Wide Reach: It operates in over 800 cities, capturing budget as well as mid-tier travelers.

Lemon Tree Hotels

• Established: 2002
• Franchising since: 2010
• Initial Investment: ₹10–₹25 crore
• Franchise Fee: ₹20–₹30 lakh
• Royalty Fees: 4%–5% of gross revenue

Why Invest

• Rising Mid-Market Demand: Lemon Tree serves budget and mid-scale travelers, which remains the fastest-growing segment in India's hospitality market.
• Strong Brand Play: It is India's largest hotel chain in the mid-market category with over 8,500 rooms across 50+ locations.
• Eco-Friendly Approach: The brand has practices of sustainability making it attractive to the environment-conscious traveler and businessman.
• Comprehensive Support: Lemon Tree supports the franchisees by providing thorough training, marketing and operational support in ensuring guest experiences are homogenous and well regulated.

ITC Hotels

• Established: 1975
• Franchised since: Runs under management contract not traditional franchising
• Initial Investment: ₹50–₹75 crore
• Franchise Fee: Negotiable (as per terms of management contract)
• Royalty Fees: Negotiable

Why Invest

• Luxury and Sustainability: ITC Hotels symbolize luxury and provide eco-friendly and sustainable hospitality under the "Responsible Luxury" ethos.
• Premium Brand Appeal: The hotels have a top position in the rich list of affluent travelers, which automatically ensures constant demand in premium markets.
• Exclusive Culinary Reputation: Award winning dining experience is a very strong reputation of ITC Hotels that gives a competitive advantage to its offerings.
• Robust Market Support: Franchise partners are granted help from ITC's large and excellent experience in branding, marketing, and operational efficiency.

Sarovar Hotels & Resorts

• Established in the year: 1994
• Franchising since: 2000
• Initial Investment: ₹10–₹25 crore
• Franchise Fee: ₹20–₹30 lakh
• Royalty Fees: 4%–5% of gross revenue

Why Invest

• Widespread Presence: Sarovar operates 95+ properties across India, making it one of the largest hotel chains in the country.
• Strong Mid-Market Focus: It targets mid-tier and business travelers, aligning with the growing demand for affordable and quality hotels in India.
• High growth potential: Sarovar aims to open over 15 hotels each year, that would create many expansion opportunities for its franchisees.
• Low franchise cost: Hyatt hotel franchise cost in India is moderate and would suit a beginner investor or a regional player looking to expand.

Hyatt Hotels Corporation

• Established in: 1957
• Franchising since: 1980
• Institutional investment: ₹15–₹50 crore
• Franchise fee: ₹40–₹60 lakh
• Royalties: 5%–6% of gross revenue

Why Invest

• International Acceptance: Hyatt operates in over 70 countries, hence providing franchisees with a brand that can be used globally for attracting both international and domestic guests.
• Affluence and Business Markets: Hyatt is beneficial to the affluent and business class markets, providing access to high-end profitability.
• Customer Loyalty: The World of Hyatt loyalty program for franchisees allows access to loyal customers and repeat bookings.
• Expansion in India: Hyatt is aggressively expanding in India, with plans to open 24 more hotels by 2025; what a good franchise playground.

The Leela Palaces, Hotels, and Resorts

• Established: 1987
• Franchising since: The company operates through management contracts instead of traditional franchising
• Initial Investment: ₹50 – ₹100 crore
• Franchise Fee: Negotiable as per the contract
• Royalty Fees: Negotiable

Why Invest

• Ultra-Luxury Leader: Leela addresses India's elite and high-net-worth travelers with properties that epitomize luxury and exclusivity.
• The brand value is growing as Brookfield Asset Management took over the brand in the year 2019. In fact, Leela has been expanding rapidly across the cities.
• Prime Locals: Leela properties are situated in demand tourist and business places, hence guaranteeing steady occupancy.
• High ROI: While the cost of franchise for any hotel in India is charged at a high rate from Leela, returns are hefty because of premium pricing and high occupancy rates.

Ibis Hotels 

• Established: 1974
• Available for franchising: 1990
• Initial investment: ₹15–₹30 crore
• Franchise fee: ₹20–₹40 lakh
• Royalty fees: 4%–5% of gross revenue

Why Invest

• Economy Hotel Leader: Ibis leads the economy yet chic segment, which attracts price-sensitive travelers.
• Accor Association: Franchisees receive access to Accor's international marketing, technological, and operational knowledge.
• Best suited for cities: Ibis operates effectively in metros and top city-based destinations
• Eco-Friendly: It showcases environment-friendly practices making it more attractive to eco-friendly visitors.

India's Hotel Franchise Market Trends

India's hotel franchise market is expanding quickly in 2025 as a result of increased travel, growing incomes, and changing customer demands. Here is a brief overview of the main trends:

• Hospitality Industry Growth: India's hospitality market is predicted to reach $75 billion by 2025, with further growth in domestic and international tourism.
• Emerging Regions & Segments: Tier-2 and Tier-3 cities are now becoming very popular for hotel franchises. Budget and mid-tier segments are booming especially amongst young travellers.
• Tourism & Business Travel Impact: India received more than 10 million foreign tourists in 2023, with good business travel levels, hence commercial demand for hotels is strong.
• Digital Transformation: Tech solutions, such as mobile check-ins and AI-driven bookings, allow hotels to meet the ever-growing demands for convenient and personalized experiences.

Conclusion

India’s hotel franchise market in 2025 offers a variety of opportunities, from luxury brands like Taj and ITC to budget-friendly options like OYO and Lemon Tree. When selecting a franchise, consider brand reputation, investment cost, growth potential, and market demand. With India's booming tourism and business travel, hotel franchises present strong investment potential. In relation to more digital and sustainable trends, 2025 would be an excellent time to invest in the hotel franchise business in India for great returns.

FAQs

What is the best hotel franchise?

Best hotel franchise for your investment capacity and market goals would depend upon several factors, although the popular ones in India include Taj Hotels, OYO, and Lemon Tree. All of them offer excellent brand recognition with rich growth potential.

What is a hotel franchise fee?

It pertains to the brand right, training access, and facilitation in marketing. This is one of the critical inputs that should be used at the establishment stage of any franchise business.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.