Spending on experiences like recreational activities, dining, hotels, and travel is projected to exceed spending on physical goods in India between 2025 and 2030. The growth rate for experiential spending is expected to be 10.3% annually, outpacing the 9.1% growth rate for physical goods. Specifically, hotel accommodation spending is anticipated to increase at a faster rate of 10.6% annually.
India, with its lower lifestyle hotel presence compared to other markets, offers significant opportunities for developers and investors. The demand from Gen Z travelers for unique design environments, personalized services, and communal spaces hosting cultural events is reshaping the hospitality sector. Lifestyle hotels are emerging to cater to these preferences, combining independent property designs with the operational strengths of established brands.
The shift towards experiential spending has been accelerated by the COVID-19 pandemic and sustained by pent-up demand since 2022. Generation Z, the driving force behind this trend, is expected to increase its spending faster than any other demographic group in the Asia Pacific region. The report also notes that lifestyle hotels have shown remarkable growth, outpacing the broader hotel market in supply and revenue.
According to Anshuman Magazine, Chairman & CEO of CBRE for India, South-East Asia, Middle East & Africa, lifestyle hotels offer property owners and investors a dual advantage of higher revenue per available room (RevPAR) and average daily rate (ADR) premiums compared to standard assets. Upscale lifestyle hotels have demonstrated revenue premiums despite smaller room sizes, emphasizing the importance of food and beverage revenues and efficient operations.
