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Tamil Nadu’s luxury hospitality sector is witnessing a strong growth phase, driven by robust economic expansion, industrial growth, and rising travel demand. Chennai, in particular, has emerged as one of the country’s top-performing hotel markets with industry experts projecting the addition of over 2,000 new rooms in the next two to three years. “Several major hotel projects are in the pipeline for Chennai, including new properties by Marriott and Ritz-Carlton. There are also strong indications that the Singapore-based luxury brand Raffles may enter the city. Over the next three to four years, Chennai is expected to see an addition of approximately 1,500 to 2,000 new luxury hotel keys,” said V.S. Sridhar, executive managing director, Cushman and Wakefield, Chennai. He said demand was coming from strong growth in the office and manufacturing segment. He also pointed out that room rates had increased by around 15%-20%. “The Average Room Rate (ARR) witnessed strong growth, rising close to 11% year-on-year to ₹7,800-8,000,” said Mandeep S. Lamba, President & CEO (South Asia), HVS ANAROCK. “As of August 2025, Tamil Nadu had over 13,600 branded hotel keys, with a healthy pipeline of nearly 3,900 additional keys expected by 2030. Chennai leads the upcoming supply with over 2,600 keys, followed by Hosur, Salem, and Coimbatore,” he said, adding that: “Chennai, in particular, has been a standout performer. In January-September 2025, the city clocked one of the highest occupancy levels among major hotel markets in the country. It recorded an occupancy rate in the range 74%-76% during this period, a year-on-year increase of over 3% points.” Developers are responding with renewed focus, and leading hotel brands such as IHCL, Marriott, Hyatt, IHG, and Radisson are actively exploring new projects across the State, Mr. Lamba pointed out. Brigade Hotel Ventures Limited (BHVL) is currently developing three properties in Chennai — Grand Hyatt Chennai ECR (200 rooms), JW Marriott Chennai OMR (250 rooms), and Courtyard by Marriott Chennai World Trade Centre (45 rooms). “While Courtyard by Marriott Chennai World Trade Centre is in interior fit-out stage, and we are expecting to launch the hotel before the end of next year. The other two hotels are currently under design development stage and progressing steadily,” said Manoj Agarwal, COO, Hospitality, Brigade Hotel Ventures Limited. Currently, BHVL operates one hotel in Tamil Nadu — the Holiday Inn Chennai OMR IT Expressway, which features 202 rooms. Suma Venkatesh, executive vice-president-real estate and development, IHCL, said: “For over five decades, IHCL has had a strong presence in Tamil Nadu, starting with Taj Coromandel, the State’s first luxury hotel. Today, our portfolio stands at 32 hotels including 15 in the pipeline across our brandscape, addressing the heterogeneous market segments.” Recently, IHCL announced the signing of a Taj hotel on ECR in Chennai, Tamil Nadu. This is a greenfield development. The group is partnering with MGM Healthcare for this project.
