India’s hotel industry is poised to grow significantly with the addition of more than 70,000 keys by 2030, transitioning from post-pandemic recovery to structural maturity, according to a report by CBRE South Asia Pvt. Ltd. The sector’s market size is projected to increase from $24.6 billion in 2024 to approximately $31 billion by 2029, driven by a 40% year-on-year surge in domestic tourism to 4.1 billion visits in 2025.
In 2025, the supply pipeline notably shifted towards premiumization to cater to the growing consumer demand for luxury experiences, with Upper Midscale, Upper Upscale, and Upscale categories collectively representing about 60% of new openings. The report highlights that the hospitality industry is moving towards structural maturity characterized by disciplined expansion and stable pricing.
The total value of hotel deals surged by 2.5 times year-on-year in 2025, reaching around $456 million. Over the past year, India’s hospitality sector has witnessed a substantial increase in investment activity, with institutional investors acquiring significant stakes. Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE, emphasized that India’s economic resilience, supported by rising disposable incomes and enhanced accessibility due to extensive infrastructure development, is reflected in the hospitality sector’s growth trajectory.
As the industry embraces experience-driven travel and taps into institutionalized demand at spiritual and cultural hubs, Magazine foresees strong and sustained growth in India’s hospitality ecosystem. Despite year-end challenges like geopolitical tensions and operational disruptions in the aviation sector, the sector maintained robust growth momentum throughout 2025. Occupancy rates averaged around 64% during the year, with revenue per available room increasing by 11% year-on-year and average daily rates rising by 8.7%, as per the report.
Rami Kaushal, Managing Director, Consulting & Valuations, India, Middle East & Africa, CBRE, noted a growing investor interest in diversifying into leisure destinations, pilgrimage centers, and emerging commercial cities with limited branded inventory.
