India’s Hotel Sector Set to Add Over 70,000 Keys by 2030: CBRE

India’s hospitality sector is poised for sustained expansion, with listed hotel operators expected to add over 70,000 rooms by 2030, according to CBRE’s India Alternate Sectors Outlook 2026. The projection reflects a shift from post-pandemic recovery to a more structured growth phase marked by disciplined expansion and stable pricing.

Market Growth Driven by Domestic Demand

The sector’s market size is projected to grow from approximately $24.6 billion in 2024 to nearly $31 billion by 2029, supported largely by domestic travel demand. A sharp rise in internal tourism, which recorded around 4.1 billion visits in 2025, continues to underpin this growth trajectory.

Improved infrastructure, rising disposable incomes, and enhanced connectivity are contributing to increased travel frequency, positioning India as a high-growth hospitality market.

Operational Performance Strengthens in 2025

Hotel performance indicators remained strong through 2025 despite external challenges. Industry-wide occupancy levels averaged around 64%, while revenue per available room (RevPAR) grew by 11% year-on-year, outpacing the previous year’s growth. Average daily rates (ADR) also rose by 8.7%, indicating sustained pricing power across segments.

These metrics highlight improving profitability and operational resilience across the sector.

Premiumisation Shapes New Supply

A clear shift toward premium offerings is shaping new hotel supply in India. Upper midscale, upper upscale, and upscale segments accounted for nearly 60% of new openings in 2025, reflecting changing consumer preferences toward higher-quality experiences.

This trend aligns with the growing demand for experiential travel, particularly in leisure, cultural, and spiritual destinations.

Investment Activity Gains Momentum

Investment in India’s hospitality sector has accelerated significantly, with total hotel deal value reaching approximately $456 million in 2025—marking a 2.5x increase year-on-year.

Institutional investors are increasingly active, exploring portfolio acquisitions and strategic stakes in hospitality platforms. At the same time, hotel companies are leveraging capital markets through IPOs to fund expansion and reduce leverage.

Shift Towards Asset-Light Expansion

Operators are increasingly adopting asset-light models, including management contracts and franchise agreements, to drive scalable growth while maintaining capital efficiency.

This strategic shift is expected to enhance the sector’s attractiveness to investors and support consolidation through mergers and acquisitions in the coming years.

Emerging Markets and New Growth Clusters

Expansion is extending beyond traditional metro markets into tier-II and tier-III cities, supported by infrastructure development and improved accessibility. These regions, along with leisure and pilgrimage destinations, are attracting heightened interest due to limited branded hotel supply.

Additionally, opportunities for converting independent hotels into branded assets are creating new avenues for portfolio expansion.

Evolving Development and Investment Strategies

Developers are focusing on experience-driven and high-yield assets, including mixed-use developments and residential-style hospitality offerings targeting affluent travellers. The rise of “hotel-at-home” concepts reflects evolving consumer expectations and long-stay demand patterns.

Investment activity is expected to remain robust through 2026, supported by sustained travel demand and institutional participation.

Policy Support and Long-Term Outlook

Government initiatives and policy measures are further strengthening the sector’s foundation. GST rationalisation has improved affordability and competitiveness, while budgetary proposals aim to enhance hospitality education and workforce development.

Infrastructure projects, including airport expansion and improved transit networks, are also enabling deeper market penetration and supporting long-term growth.

Strategic Significance

The projected addition of over 70,000 keys by 2030 underscores India’s transition into a structurally mature hospitality market. With strong domestic demand, rising investment inflows, and evolving business models, the sector is positioned for sustained, long-term expansion across both established and emerging destinations.