India's hotel operators plan to add over 70,000 rooms by 2030, fueled by a 2.5x YoY jump in investment to USD 456M in 2025. The market is projected to reach USD 31B by 2029, driven by domestic tourism and disciplined expansion.
Major Expansion and Investment Surge
Listed hotel operators in India are projected to add more than 70,000 keys by 2030 to leverage the country's strong growth potential, according to a report by CBRE.
The sector witnessed a significant surge in investment activity during 2025, with the total hotel deal value reaching approximately USD 456 million. This represents a 2.5-fold year-on-year increase from the USD 184 million recorded in 2024.
Market Maturity and Domestic Tourism Fuel Growth
The "India Alternate Sectors Outlook 2026" report by CBRE noted that the industry is moving from a post-pandemic recovery phase into a stage of structural maturity. This phase is defined by disciplined expansion and stable pricing. The report estimated that the hospitality market size will grow from roughly USD 24.6 billion in 2024 to nearly USD 31 billion by 2029. This trajectory is largely supported by domestic tourism, which saw visits rise 40 per cent year-on-year (YoY) 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," Anshuman added.
Strong Performance Metrics Despite Headwinds
Despite geopolitical tensions and aviation disruptions in late 2025, the sector maintained its growth momentum. Average occupancy levels reached approximately 64 per cent, while Revenue per available room (RevPAR) grew 11 per cent YoY. Average daily rates (ADR) also rose by 8.7 per cent. Supply trends shifted toward premium offerings, with the Upper Midscale, Upper Upscale, and Upscale categories accounting for around 60 per cent of all new openings during the year.
Shifting Investor Strategies and Asset-Light Models
"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," Kaushal noted.
Operators are increasingly using management contracts and franchise partnerships to strengthen balance sheets. This move toward asset-light models is expected to drive consolidation through 2026.
Government Initiatives and Infrastructure Boost Sector
Growth is also being fueled by government infrastructure projects, including high-speed rail corridors and aviation expansion. Furthermore, the GST rationalisation in September 2025 improved competitiveness across segments. The Union Budget FY2026-27 also outlined initiatives to enhance professional training, ensuring a stronger talent pipeline for the expanding ecosystem. (ANI)
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