India’s hotel industry is entering a new phase defined by rapid expansion and bold strategic moves.
IPOs, rising room signings and strong investment flows are reshaping the landscape, as operators expand in domestic and international markets.
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The sector’s scale ambition reflects both growing travel demand and improved financial confidence.
Growth driven by IPO listings and chain expansion
The hospitality sector has seen a surge in public listings, underscoring investor confidence. Recently listed companies such as Juniper Hotels and Apeejay Surrendra Park Hotels have fuelled the momentum.
Schloss Bangalore, owner of The Leela brand, has filed a ₹50 billion IPO as part of plans to expand its luxury footprint by adding eight hotels by 2028.
Indian Hotels Company, which operates the Taj brand, aims to double its portfolio to over 700 properties by 2030, with at least 10% located overseas.
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By GlobalDataRecord hotel signings and room pipeline
India added a record 47,000 hotel rooms in the 2023‑24 fiscal year, a 62% increase in hotel signings.
That brings total chain-affiliated rooms to around 188,000 as of FY24, with projections reaching 219,000 by FY26 and 241,000 by FY27.
Despite this strong growth, experts warn India needs roughly 500,000 rooms by 2030 to meet burgeoning demand.
Sector outlook, occupancy and projected growth
The hospitality market in India is estimated at USD 281.8 billion in 2025, with a projected CAGR of 14% to 2030.
Occupancy nationwide reached 63–65% in 2023, and average daily rates rose to INR 7,400–7,600, pushing RevPAR to INR 4,662–4,940.
ICRA forecasts growth moderating to 6–8% in FY26, as the sector adjusts to higher bases and potential headwinds.
Expansion strategies and market dynamics
Major hotel chains are driving India’s hotel expansion with asset-light models and management agreements. International brands have announced plans to open between 100–300 hotels over the next five years.
Domestic players like IHCL are partnering with regional developers—such as the Ambuja Neotia Group—to launch 15 new hotels in eastern and northeastern India.
Homegrown boutique operators are also growing, emphasising uniquely local stays and personalised guest experiences.
Market challenges and structural constraints
Though growth remains robust, several challenges could impact momentum.
These include land pricing pressures, a shortage of trained hospitality staff, and operational complexities such as proposed linking of food and beverage taxation to room tariffs.
Infrastructure constraints in Tier II and III cities may also limit expansion pace.
Looking ahead
India’s hotel industry is evolving from fragmented growth to calculated scale.
With robust domestic travel demand, strong investor interest, and a growing pipeline of projects, the stage is set for rapid hotel industry expansion in India.
Yet, reaching its full potential will depend on addressing staffing, taxation and infrastructure challenges over the coming years.
