Hotel industry in India - statistics & facts
From guest houses in the Himalayas, palace hotels in Rajasthan, innovative, niche hotels in one of the megacities, beach resorts in Goa, to the houseboats in Kerala: India offers a large variety of hotels for all kinds of travelers from backpackers to wellness tourists or business travelers. During the last decade, the tourism sector accounted for a significant share in India’s economy. The main driver of the sector was the hotel industry, accompanied by tour operations and the restaurant segment in tourist areas.
Indicators across ARRs, occupancy, outlet expansion, and investor confidence all point toward a stable path towards growth. Investment in India’s hotel sector continues to gain momentum, with a strong pipeline of new properties, especially in emerging Tier II and III cities. Established players like Indian Hotels Company (Taj), ITC Hotels, and Oberoi are expanding alongside global chains such as Hyatt and Marriott, who are deepening their Indian footprint. Simultaneously, new entrants and boutique brands are capitalizing on niche segments and experiential travel trends.
Additionally, increasing awareness and the need for sustainability, as well as the boost for domestic travel has encouraged cultural exploration of the country’s historical landmarks through heritage hotels. The two-fold impact of preserving and modernizing these sites creates a unique position for the country’s travel and tourism market.
What makes the hotel market in India thrive?
Revenues in the hotel market were mostly steered by domestic tourism, supported by business events and the country’s trillion-rupee wedding market. With business travel back to pre-COVID levels, events including the annual cricket tournament Indian Premier League, occupancy rates saw a surge in average hotel room prices in key urban centers including New Delhi, Ahmedabad, and Mumbai. High profile events including concerts by Coldplay in early 2025 elevate urban centers and contribute to seasonal stability. Moreover, religious tourism is a reliable source of revenue for hotels in the country, aided by the government’s investment into tourism infrastructure in recent years. The Mahakumbh Mela in 2025 brought in hundreds of millions of tourists, boosting tourism around Prayagraj in Uttar Pradesh.Indicators across ARRs, occupancy, outlet expansion, and investor confidence all point toward a stable path towards growth. Investment in India’s hotel sector continues to gain momentum, with a strong pipeline of new properties, especially in emerging Tier II and III cities. Established players like Indian Hotels Company (Taj), ITC Hotels, and Oberoi are expanding alongside global chains such as Hyatt and Marriott, who are deepening their Indian footprint. Simultaneously, new entrants and boutique brands are capitalizing on niche segments and experiential travel trends.
Sustainability & luxurious travel
The pandemic accelerated the demand in the wellness industry across the country. This was especially the case for the urban middle class and their desire for a break from fast-paced city lives. Often, this involved travel to less crowded destinations with an indulgence for spa and wellness services.Additionally, increasing awareness and the need for sustainability, as well as the boost for domestic travel has encouraged cultural exploration of the country’s historical landmarks through heritage hotels. The two-fold impact of preserving and modernizing these sites creates a unique position for the country’s travel and tourism market.
