Market Report

HVS Anarock India Hospitality Industry Overview 2025

May 8, 2026
This report highlights the key trends in the Indian hospitality industry in 2025 along with the sector performance metrics, brand signings, and brand openings during the year. It also provides our outlook for the sector for 2026.

Executive Summary

Calendar year 2025 marked an important turning point for global travel and tourism. With international travel volumes moving beyond pre-pandemic benchmarks, the sector has largely transitioned from recovery to growth. Yet, this next phase is proving more complex, shaped by geopolitical disruptions, aviation bottlenecks, inflationary pressures, and increasingly discerning travellers.
 
Regional momentum remained uneven during the year. Europe continued to benefit from its scale and diversified demand base, while the Middle East and Africa sustained strong traction through focused investment and aviation-led connectivity. Asia Pacific continued its upward climb as lagging markets normalized further. Yet renewed instability in the Middle East has introduced fresh uncertainty into travel patterns. Paradoxically, such disruptions may redirect demand toward stable alternatives, particularly across Asia Pacific and South Asia.
India’s Structural Advantage Becomes More Visible
Against this backdrop, India continued to strengthen its position as one of the world’s most compelling travel and hospitality growth markets. India’s ranking as the world’s 8th largest travel and tourism economy, as per WTTC, only hints at the sheer scale of its domestic demand engine.
 
Total air passenger traffic reached approximately 420 million in 2025, rising around 5% year-on-year, with domestic traffic of 338.9 million passengers continuing to anchor broader sector demand. While inbound tourism growth moderated, with Foreign Tourist Arrivals estimated at approximately 9.02 million, underlying demand trends remained resilient despite temporary weakness in select source markets.
 
Domestic tourism remains the cornerstone of India’s travel economy. Domestic Tourist Visits are estimated at approximately 4,548 million in 2025 and could exceed 9,500 million by 2030 if historical trends are sustained. Rising incomes, improving mobility, and expanding travel aspirations are widening the market beyond traditional seasonality and destination types.
 
This demand base is also becoming more diversified. Faith-based tourism remains a powerful engine, with the Maha Kumbh attracting over 663 million visitors and underlining the economic scale of religious travel. Weddings continue to generate significant seasonal demand, with destination weddings scaling rapidly across leisure markets.
 
Live entertainment has also emerged as a measurable hospitality catalyst, with concerts and marquee events driving intercity travel, hotel stays, and local spending. Together, these evolving demand drivers are creating a broader, more resilient travel ecosystem and reinforcing long-term hospitality growth across markets.
Hotel Performance Reflects Pricing Power and Discipline
India’s hotel sector closed CY2025 from a position of strength, with nationwide occupancy in the range of 63% to 65%, while Average Room Rate rose to approximately INR 8,500 to INR 8,700. RevPAR consequently reached INR 5,400 to INR 5,600, reflecting healthy growth over both the previous year and pre-pandemic benchmarks.
 
Pricing power remained the defining feature of the year, supported by disciplined supply growth, healthy demand depth, and consumers’ increasing willingness to pay for quality experiences. Notably, hotels largely held firm on pricing despite weather disruptions, geopolitical uncertainty, and aviation-related operational challenges during parts of the year.
Development Momentum Moves Beyond the Metros
Hotel development activity remained robust in 2025, with brand signings reaching a new high of approximately 64,118 keys across 586 properties, while new openings totalled approximately 14,199 rooms across 176 properties. The sustained pace of signings reflects continued investor confidence in India’s long-term hospitality story and growing conviction around the sector’s fundamentals.
Importantly, expansion is no longer centred only on the major metros. Tier 2, Tier 3, and increasingly Tier 4 markets are becoming central to the next phase of growth, supported by decentralising economic activity, improving connectivity, rising local demand, and relatively lower development costs. As branded supply expands deeper into these markets, the sector’s growth is becoming more broad-based and geographically diverse.
Outlook 2026
India’s hotel sector enters 2026 from a position of structural strength, even as the operating environment grows more complex. Domestic travel remains the sector’s most dependable demand anchor, while improving infrastructure and a widening tourism base continue to support long-term demand visibility.
 
The risks are real, but manageable. Geopolitical disruptions, aviation cost pressures driven by rising crude oil prices, and continued volatility across key inbound corridors will require the industry to remain agile. At the same time, India’s scale, domestic depth, accelerating infrastructure build-out, and the redirected global demand that instability elsewhere often creates continue to position the country as one of the world’s more compelling hospitality markets.
 
The next phase of growth, however, will require more than favourable demand trends. It will call for a more holistic partnership model, where government drives policy clarity, ease-of-doing-business reforms, destination development, and infrastructure creation, while the private sector continues to invest, innovate, professionalize, and scale responsibly. If both move in alignment, India can unlock the next era of hospitality growth.
 
​


Sources: UN Tourism World Tourism Barometer (March 2025), Oxford Economics, Booking.com How India Travels 2025, Grand View Research, Ministry of Tourism India, AAI, EY, BookMyShow, HVS ANAROCK Research
 
Market Report

HVS Anarock India Hospitality Industry Overview 2025

May 8, 2026
This report highlights the key trends in the Indian hospitality industry in 2025 along with the sector performance metrics, brand signings, and brand openings during the year. It also provides our outlook for the sector for 2026.

Executive Summary

Calendar year 2025 marked an important turning point for global travel and tourism. With international travel volumes moving beyond pre-pandemic benchmarks, the sector has largely transitioned from recovery to growth. Yet, this next phase is proving more complex, shaped by geopolitical disruptions, aviation bottlenecks, inflationary pressures, and increasingly discerning travellers.
 
Regional momentum remained uneven during the year. Europe continued to benefit from its scale and diversified demand base, while the Middle East and Africa sustained strong traction through focused investment and aviation-led connectivity. Asia Pacific continued its upward climb as lagging markets normalized further. Yet renewed instability in the Middle East has introduced fresh uncertainty into travel patterns. Paradoxically, such disruptions may redirect demand toward stable alternatives, particularly across Asia Pacific and South Asia.
India’s Structural Advantage Becomes More Visible
Against this backdrop, India continued to strengthen its position as one of the world’s most compelling travel and hospitality growth markets. India’s ranking as the world’s 8th largest travel and tourism economy, as per WTTC, only hints at the sheer scale of its domestic demand engine.
 
Total air passenger traffic reached approximately 420 million in 2025, rising around 5% year-on-year, with domestic traffic of 338.9 million passengers continuing to anchor broader sector demand. While inbound tourism growth moderated, with Foreign Tourist Arrivals estimated at approximately 9.02 million, underlying demand trends remained resilient despite temporary weakness in select source markets.
 
Domestic tourism remains the cornerstone of India’s travel economy. Domestic Tourist Visits are estimated at approximately 4,548 million in 2025 and could exceed 9,500 million by 2030 if historical trends are sustained. Rising incomes, improving mobility, and expanding travel aspirations are widening the market beyond traditional seasonality and destination types.
 
This demand base is also becoming more diversified. Faith-based tourism remains a powerful engine, with the Maha Kumbh attracting over 663 million visitors and underlining the economic scale of religious travel. Weddings continue to generate significant seasonal demand, with destination weddings scaling rapidly across leisure markets.
 
Live entertainment has also emerged as a measurable hospitality catalyst, with concerts and marquee events driving intercity travel, hotel stays, and local spending. Together, these evolving demand drivers are creating a broader, more resilient travel ecosystem and reinforcing long-term hospitality growth across markets.
Hotel Performance Reflects Pricing Power and Discipline
India’s hotel sector closed CY2025 from a position of strength, with nationwide occupancy in the range of 63% to 65%, while Average Room Rate rose to approximately INR 8,500 to INR 8,700. RevPAR consequently reached INR 5,400 to INR 5,600, reflecting healthy growth over both the previous year and pre-pandemic benchmarks.
 
Pricing power remained the defining feature of the year, supported by disciplined supply growth, healthy demand depth, and consumers’ increasing willingness to pay for quality experiences. Notably, hotels largely held firm on pricing despite weather disruptions, geopolitical uncertainty, and aviation-related operational challenges during parts of the year.
Development Momentum Moves Beyond the Metros
Hotel development activity remained robust in 2025, with brand signings reaching a new high of approximately 64,118 keys across 586 properties, while new openings totalled approximately 14,199 rooms across 176 properties. The sustained pace of signings reflects continued investor confidence in India’s long-term hospitality story and growing conviction around the sector’s fundamentals.
Importantly, expansion is no longer centred only on the major metros. Tier 2, Tier 3, and increasingly Tier 4 markets are becoming central to the next phase of growth, supported by decentralising economic activity, improving connectivity, rising local demand, and relatively lower development costs. As branded supply expands deeper into these markets, the sector’s growth is becoming more broad-based and geographically diverse.
Outlook 2026
India’s hotel sector enters 2026 from a position of structural strength, even as the operating environment grows more complex. Domestic travel remains the sector’s most dependable demand anchor, while improving infrastructure and a widening tourism base continue to support long-term demand visibility.
 
The risks are real, but manageable. Geopolitical disruptions, aviation cost pressures driven by rising crude oil prices, and continued volatility across key inbound corridors will require the industry to remain agile. At the same time, India’s scale, domestic depth, accelerating infrastructure build-out, and the redirected global demand that instability elsewhere often creates continue to position the country as one of the world’s more compelling hospitality markets.
 
The next phase of growth, however, will require more than favourable demand trends. It will call for a more holistic partnership model, where government drives policy clarity, ease-of-doing-business reforms, destination development, and infrastructure creation, while the private sector continues to invest, innovate, professionalize, and scale responsibly. If both move in alignment, India can unlock the next era of hospitality growth.
 
​


Sources: UN Tourism World Tourism Barometer (March 2025), Oxford Economics, Booking.com How India Travels 2025, Grand View Research, Ministry of Tourism India, AAI, EY, BookMyShow, HVS ANAROCK Research