India’s hotel boom is no longer being driven by large chains with marquee assets. A quieter shift is underway in the country’s vast unbranded hotel market.
Vikramjit Singh, founder of Ananta Capital-backed Alivaa Hotels and Resorts, is building the company's playbook around this concept and is now looking to raise $4 million to expand.
Less than two years since starting operations, Alivaa Hotels has expanded by franchising its brands to small, owner-run hotels that struggle with distribution rather than cost or quality. In about a year, the company added 30 hotels, taking its portfolio to 32 properties across 22 cities and two countries, including Bhutan. Its upcoming hotels are in Udaipur, Mumbai and Corbett Tiger Reserve in Uttarakhand, among others.
“We are betting on growing demand and an asset-light model where we lease properties, much like renting a home,” he said in an exclusive conversation with Mint.
Last year, Singh told Mint that the plan was to have 50 operational hotels by 2030, a target he expects to surpass, with the immediate goal of 80 operational hotels by the end of the current fiscal.
The company is preparing for its next funding round, targeting a 5 to 7 times jump in valuation from its initial raise of an undisclosed sum from Ananta Capital. It is looking to raise about $4 million, Singh said.
At the core of this expansion is a differentiated model. Unlike hotel chains that charge fixed fees or take a share of revenue, Alivaa aligns its earnings directly with the revenue it helps generate for the small, owner-run hotels.
“We are branding unbranded hotels run by owners themselves. They do a fine job on operations and customer experience, but they lack demand,” Singh said. “We are probably the only franchise player in this industry who take co-ownership for revenue and a very large part of the fee is based on our performance rather than the traditional fee structure.”
Strong momentum
Alivaa’s network has a gross merchandise value of about ₹100 crore across its properties, though its own top line is based on the fees it collects, which Singh did not disclose.
Romesh Koul, who runs Delhi-based Naaz Hotel Consultants Private Ltd, said Alivaa Hotels has built strong early momentum.
“It started with a small base of around eight hotels a year and a half ago and has scaled rapidly since. Albeit smaller inventory, the company is targeting very interesting locations like Srinagar. Once you build reach, adding 10 properties in a year is quite achievable. The only caution is around selecting the right hotels and locations, since this is not a management-led portfolio, and more lease and franchise-based,” Koul said.
India’s unorganized hotel base is at the core of Alivaa’s strategy.
“The unbranded supply in this country is at least 14-15 lakh rooms, so even a small percentage of that is a very large opportunity,” Singh told Mint.
Most of Alivaa’s franchise-led properties are small, with 40-50 rooms. Larger assets such as a 150-room hotel in Gurugram, a 100-room hotel close to Mumbai airport and a 200-room greenfield property in Pune are taken on lease. All properties operate under the Alivaa and The Hoften brands.
The company is positioning itself in the economy to the upper mid-scale segment.
“There is a big gap in this segment and the scale is massive, so we are not looking at luxury at all,” said Singh, who was previously president of Lemon Tree Hotels.
India has roughly 220,000 branded hotel rooms. In contrast, Singh estimates the unbranded market is much larger, at about 1.4 million rooms.
“We are targeting an inventory of 100,000 rooms in the next five to seven years,” he said.
West, south expansion
The company follows a hub-and-spoke expansion strategy, building density in a region before moving to new markets. It currently has a strong presence in north India, including eight hotels in Gurugram, and plans to expand west and south as it scales up.
India’s hotel sector is entering a phase where demand is expected to outpace supply, particularly in smaller cities and emerging travel markets, as room additions remain constrained by long project timelines, high capital costs and approval delays. According to the HVS Anarock-Gleeds Consulting 2025 Hotel Development Cost Report, the country’s total hotel room supply is projected to grow from 220,000 rooms currently to 350,400 by 2030.
Ratings company Icra estimates demand for branded hotel rooms will rise at a compounded annual rate of 8-10% during FY25-28, outpacing the 5-6% growth likely in premium hotel supply. Against this, companies such as Sarovar Hotels & Resorts are expanding selectively in tier II and III markets, balancing growth opportunities with a sharper focus on project viability and operational execution.
Singh sees the current demand surge in hospitality as structural rather than cyclical.
“This is not a cycle – this is a structural shift. People are simply consuming more hotel rooms, period. New aircraft are coming every week, roads are being built, and travel is becoming easier, so people are moving more,” he said.
Singh expects India’s branded hotel inventory to double over the next five years as demand outpaces supply.
