India’s listed hotel operators are projected to add over 70,000 keys by 2030 to capitalise on strong underlying growth potential, according to the India Alternate Sectors Outlook 2026, released by leading real estate consultancy and infrastructure company CBRE South Asia Pvt. Ltd. The report notes that the sector is transitioning from a phase of post-pandemic recovery into structural maturity, characterised by disciplined expansion and pricing stability.
According to the consultancy, the industry’s market size is projected to rise from approximately USD 24.6 billion in 2024 to ~USD 31 billion by 2029. Domestic tourism is likely to lead this growth, having posted a 40% year-on-year (YoY) rise in visits to 4.1 billion in 2025.
“The hospitality sector’s trajectory is a testament to India’s economic resilience, supported by rising disposable incomes and improving accessibility facilitated by large-scale infrastructure development,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE. “As the industry accelerates its transition towards experience-driven travel and captures institutionalised demand across spiritual and cultural centres, we anticipate robust and long-term expansion for the country’s hospitality ecosystem.”
The sector maintained strong growth momentum throughout 2025 despite year-end headwinds such as geopolitical tensions and operational disruptions in the aviation sector.
During the year, overall occupancy levels reached ~64%, providing a foundation for improved financial performance for operators. Revenue per available room (RevPAR) rose 11% year-over-year, surpassing the 9% growth recorded in 2024, while average daily rates (ADR) increased by 8.7%.
The supply pipeline in 2025 shifted decisively towards premiumisation, addressing the heightened consumer appetite for luxury experiences. The Upper Midscale, Upper Upscale, and Upscale categories cumulatively accounted for ~60% of new openings.
Since 2024, India’s hospitality sector has witnessed a substantial surge in investment activity, with institutional players aggressively acquiring large stakes. In 2025, the total hotel deal value reached approximately USD 456 million, representing a 2.5x Y-o-Y growth from USD 184 million in 2024.
This momentum is projected to continue over the next two years as investors actively explore portfolio-led investments and targeted asset acquisitions.
Major players also turned to public markets, using high-profile IPOs to raise capital, reduce debt, and accelerate regional expansion.
“Institutional players are aggressively acquiring large stakes in the hospitality sector,” said Rami Kaushal, Managing Director, Consulting & Valuations, India, Middle East & Africa, CBRE. “Investor interest is increasingly shifting towards diversification into leisure destinations, pilgrimage centres, and emerging commercial cities with a constrained supply of branded inventory. The strategic realignment towards asset-light expansion models is enhancing the sector’s institutional appeal, paving the way for sustained consolidation and M&A activity as operators look to scale their platforms.”
The sector is witnessing a realignment, with operators increasingly adopting asset-light expansion models such as management contracts and franchise partnerships to strengthen balance sheets and pursue more disciplined growth strategies. This is likely to enhance the sector’s institutional appeal, according to the report. As the industry expands, consolidation activity is expected to gain momentum in 2026.
Moreover, operators are increasingly exploring acquisition-led growth strategies to scale portfolios and broaden market presence. Major hospitality players are evaluating such opportunities across tier-II and tier-III cities, supported by improving connectivity and expanding tourism infrastructure. Additionally, the country’s extensive base of independent and unbranded hotels presents opportunities for asset aggregation and brand conversions.
Against this backdrop, investment activity in the hospitality sector is likely to remain active through 2026, supported by sustained travel demand and continued investor interest in scalable hospitality platforms.
Developers and operators are also transitioning towards higher-yield, experience-driven assets. They are increasingly focusing on integrated mixed-use hubs and residential-style luxury offerings to cater to high-net-worth individuals seeking a “hotel-at-home” lifestyle. Recent policy initiatives are expected to support the continued development of this ecosystem.
The spiritual and heritage landscape in the country is also evolving into a year-round institutional demand segment, supported by government investments and the overhaul of national transit networks. Infrastructure developments, such as the proposed high-speed rail corridors and the ongoing expansion of the national aviation sector, are enhancing accessibility and enabling premium operators to enter emerging markets with greater logistical confidence.
The GST rationalisation implemented in September 2025 streamlined taxation structures to improve sector competitiveness, supporting affordability across Midscale and Budget segments while lifting overall occupancy levels. Furthermore, the Union Budget FY2026-27 outlined several initiatives that could strengthen long-term sector fundamentals, including the proposed upgrade of the National Council for Hotel Management and Catering Technology into a National Institute of Hospitality to enhance professional training and build a stronger talent pipeline.
