Inside Indian Hotels’ Bold ₹2 Billion Mid-Scale Hotel Takeover

There is an old line in the hospitality industry that the business is about making guests feel at home, even if you wish they were. Trainers apparently use it to remind interns what the business is about. Yet in today’s market, charm and patience are no longer enough. It is about securing the right customer segment. If that segment is not too fussy and still willing to pay, it is the sweetest spot in the industry.

That is why The Indian Hotels Company’s acquisition of a major stake in Clarks Hotel & Resorts for a little over ₹2 billion stands out. It could be one of the savviest market captures in Indian hospitality.

While some competitors continue to chase luxury, which demands massive capital for marginal gains, Indian Hotels has chosen a different approach. India’s 500 million aspirational consumers want hotels that are affordable, reliable and repeatable. Mid-scale hotels fill this need with 65% occupancy at fair tariffs, while luxury requires exponential investment for only slightly better returns. Indian Hotels did not just buy properties, it bought scale in the most profitable tier of hospitality.

Indian Hotels has the advantage of operating across the full spectrum, from Taj in luxury to Vivanta and SeleQtions in upscale, Ginger in mid-scale and Ama in homestays. That spread allows it to place each brand where it fits best while doubling down on Ginger as the volume driver.

With the deal, Indian Hotels has acquired 135 hotels across 110 locations, taking Ginger from 100 properties to nearly 240 in one stroke and achieving the kind of expansion that would have otherwise taken decades. The real story is about reach, with 70% of the properties located in markets where Ginger had no presence, the acquisition gives coverage that competitors cannot easily replicate without deploying massive capital.

The timing also reflects financial muscle rather than opportunism. Indian Hotels has delivered 13 consecutive quarters of record performance, with revenue rising 32% to ₹21.02 billion in the April–June quarter despite headwinds from geopolitics and increased operating costs. Gross cash reserves of ₹30.73 billion allowed the company to fund this acquisition while still committing ₹12 billion to expansion in 2025-26.

The acquisition also directly integrates with Indian Hotels’ digital platform. Its Tata Neu loyalty base has grown from 2.2 million to 11 million active users in three years.  This scale matters more in mid-scale than in luxury because customers at this level value loyalty points as much as service. Points-linked revenue rose 17% to ₹5.45 billion, while app sales surged 46% to ₹750 million, providing Indian Hotels with the digital infrastructure to monetise the enlarged Ginger network immediately.

With Clarks, Indian Hotels added 6,800 rooms in the mid-tier segment, placing it well ahead of Accor, the closest operator in this space.

The move shifts the competitive landscape, with the mid-scale segment rising from 39% of branded supply in 2014 to 43% today and projected to reach 50% by 2030. With Clarks folded in, Indian Hotels has turned Ginger from an aspiration into an empire in waiting, making the stated target of 1,000 Ginger properties look increasingly realistic.

Rivals are also moving, with Accor and InterGlobe aiming to reach 300 hotels in India by 2030, leveraging ibis, Mercure, and Novotel to capture smaller towns, while a partnership with Treebo adds further reach. 

Catching up will be difficult because opportunities to buy assets of the size and spread of Clarks no longer exist in India’s fragmented hospitality market, and Indian Hotels has already taken the prize.

The strategic effects extend beyond the number of rooms. A wider network enables Indian Hotels to optimise yields, balance occupancy across regions, and run dynamic pricing. Meanwhile corporate clients benefit from standardised service across cities, which increases retention and strengthens pricing power, thereby deepening the moat.

Geography matters just as much, with the expansion covering tier two and tier three cities that are becoming the new centres of Indian business. As companies expand beyond metros, Indian Hotels is ready to accommodate them. For the rising middle class in these towns, branded hotels at mid-scale prices are what is called paisa vasool, in local parlance.

This is why the deal matters, because the mid-scale market is no longer a stepping stone to luxury but the engine of sustainable profit, generating cash flows without the capital drag of luxury or the razor-thin margins of budget stays. For investors who want a pure play on India’s domestic consumption, this could be a ticket to sustainable gains.