India Hotel Market By Ownership (Independent, Chained), By Budget (Economy, Premium), By Services Offered (Accommodation, Dining, Meeting & Event Spaces, Others), By Target Audience (Business Travellers, Leisure Travellers, Couples, Families), By Booking Mode (Online, Offline), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

India Hotel Market was valued at USD 15.67 Billion in 2024 and is expected to reach USD 22.41 Billion by 2030 with a CAGR of 9.32% during the forecast period. The India Hotel market is witnessing robust growth, due to several key drivers. A surge in domestic and international tourism has increased demand for diverse accommodation options. Rising disposable incomes and the growing middle class are fueling travel across various segments, from budget to luxury. Business travel is also on the rise, driven by India’s growing economy and global business integration, particularly in sectors like IT, finance, and manufacturing. Also, government initiatives such as the "Incredible India" campaign and the easing of visa policies have further boosted tourism. The rapid development of infrastructure, including airports, highways, and metro networks, enhances connectivity, making travel more accessible. This combination of factors is propelling the growth of the hotel industry in India.

Key Market Drivers

Booming Tourism Sector Across the Region

The booming tourism sector is a significant driver of growth in the India hotel market. As a part of this, according to the Government of India, as of 2023, India registered 9.24 million foreign tourist arrivals (FTAs), marking a 43.5% increase from the 6.44 million recorded in 2022.With India becoming one of the world’s most sought-after travel destinations, both domestic and international tourism have seen substantial growth. The country’s rich cultural heritage, diverse landscapes, and vibrant cities attract millions of tourists each year. Popular regions like Rajasthan, Kerala, Goa, and the Himalayan states have become key tourist hubs, driving the demand for a wide range of accommodation options, from budget hotels to luxury resorts. The government’s efforts to promote tourism, such as the "Incredible India" campaign and improved visa facilities, have further bolstered the sector. Also, the development of new tourist destinations, coupled with better infrastructure such as improved airports, highways, and regional transport networks, has made travel more accessible. The rise in the middle class, increased disposable incomes, and evolving travel preferences have led to more Indians traveling both domestically and internationally, further fuelling hotel demand. Also, India’s growing appeal as a business destination, particularly in cities like Mumbai, Delhi, and Bengaluru, has also led to higher demand for business hotels and event spaces. As tourism continues to thrive, the Indian hotel market is expected to experience continued growth, with new hotels and resorts opening in various regions, catering to the diverse needs of both leisure and business travelers.

Expansion of Key Players

The expansion of key players is a major driver of growth in the India hotel market. Leading hotel chains, both domestic and international, are increasingly expanding their presence across India to capitalize on the growing demand for accommodation driven by tourism, business travel, and domestic tourism. As a part of this, as of November 2024, Hyatt Hotels has set forth an ambitious plan to expand its presence in India to 100 properties within the next 5-6 years. Hyatt, which currently runs 41 hotels in the country, aims to take advantage of the rising demand for tourism and business travel in India's fast-expanding hospitality market. This strategy for expansion targets both luxury and mid-tier brands, such as Hyatt Place and Hyatt Regency, that have shown a strong appeal in Indian cities. Major hotel groups such as Taj Hotels, Oberoi Hotels, Marriott, Hilton, and Hyatt have significantly increased their footprints, opening new properties in both established and emerging tourist destinations. Domestic players are also investing in expanding their portfolios to tap into regional markets, catering to the diverse needs of India’s varied customer base. These expansions include the development of budget hotels, mid-scale accommodations, and luxury resorts, providing consumers with a wide range of options. Also, global hotel brands are entering Tier 2 and Tier 3 cities, where tourism and business activities are steadily increasing, further driving the demand for hotel rooms. The introduction of new hotel formats such as boutique hotels, serviced apartments, and luxury resorts is also contributing to the sector’s growth. Many hotel chains are focusing on enhancing their offerings by incorporating modern amenities, personalized services, and eco-friendly practices to attract the growing number of health-conscious and environmentally aware travelers. With the expanding network of both established and emerging brands, the India hotel market is poised for continued growth as these key players drive innovation, competition, and development throughout the country.

Technological Advancment Enhancing Guest Experience

Technological advances are significantly enhancing the guest experience in the India hotel market, driving both customer satisfaction and operational efficiency. With the rise of digital transformation, hotels are adopting innovative technologies to offer personalized, seamless, and convenient services to guests. Self-check-in kiosks, mobile apps, and digital key systems are allowing guests to check-in and access their rooms without waiting in long queues, making the check-in process faster and more convenient. Also, the integration of AI-driven tools enables personalized services, such as tailored recommendations for dining, entertainment, and local attractions. Chatbots and virtual assistants are also being deployed to provide 24/7 customer support, answering queries, making reservations, and fulfilling requests. These technologies improve guest engagement and streamline communication, enhancing overall satisfaction. Smart room technologies, such as voice-controlled lighting, temperature, and entertainment systems, are gaining popularity, offering guests greater comfort and control over their environment. Hotels are also investing in high-speed internet, providing guests with a better digital experience, whether for business or leisure purposes. Also, contactless payment options and enhanced hygiene technologies, like UV sanitation and smart cleaning systems, have become increasingly important in the post-pandemic era, ensuring both guest safety and convenience. As these technological advancements continue to evolve, they will play a crucial role in shaping the future of the Indian hotel market, improving guest experiences, and driving industry growth.

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Key Market Challenges

High Operational Cost

High operational costs are a significant challenge in the India hotel market. The hospitality industry is labour-intensive, and wages for skilled workers have been rising, contributing to increased operational expenses. Also, the cost of utilities, such as electricity, water, and gas, can be high, especially in energy-demanding operations like large hotels and resorts. These expenses are often further exacerbated by inflation and increasing prices for raw materials and supplies. Another key factor in operational costs is maintenance, as maintaining high standards of service and infrastructure requires constant investment. From the upkeep of luxury amenities to ensuring that rooms and common areas meet guest expectations, these costs add up quickly. Also, the need to comply with strict hygiene and safety regulations, particularly in the post-pandemic era, requires hotels to invest in cleaning equipment and technology, further increasing operational expenses. For smaller and mid-range hotels, managing these high costs while maintaining affordable pricing for guests can be especially challenging. Many hotels are also faced with the rising cost of technology integration, from providing high-speed internet to adopting advanced systems for booking and customer service. Balancing these rising costs with maintaining competitive pricing and quality service is a constant struggle for hotel operators in India, making efficient cost management a key factor for long-term success in the market.

Intense Competition Among Players

Intense competition among players is a significant challenge in the India hotel market. With the rapid growth of both domestic and international hotel chains, the market is becoming increasingly saturated. Established global brands like Marriott, Hilton, and Accor, as well as strong domestic players such as Taj and Oberoi, have expanded their presence in key tourist and business cities, making it difficult for smaller or newer players to compete. These established brands benefit from brand recognition, loyalty programs, and extensive resources, giving them a competitive edge in attracting guests. Also, the emergence of budget and mid-market hotel chains, along with the rise of online travel agents (OTAs) and home-sharing platforms like Airbnb, further intensifies competition. Hotels are now not only competing with other traditional hotel brands but also with alternative lodging options, which offer unique experiences and often lower price points. This forces hotels to differentiate themselves through superior customer service, innovative offerings, and competitive pricing. To stay relevant, hotel operators must continually invest in enhancing guest experiences, upgrading facilities, and adopting new technologies to streamline operations and improve service quality. The competition is also pushing hotels to offer attractive promotions and deals to attract price-sensitive customers, which can impact profitability. As the competition continues to grow, maintaining a competitive advantage will require a strategic focus on service quality, technology, and innovation.

Key Market Trends

Surging Domestic Travel Across the Region

Surging domestic travel is a key trend in the India hotel market, driving significant growth in both the leisure and business travel segments. As a part of this, as of 2023, the quantity of domestic tourists has seen a remarkable growth of 95.64%. It is worth mentioning that India recorded 2,509 million domestic tourist visits (DTV), with further growth expected. As disposable incomes rise, a growing middle class is increasingly exploring domestic tourism options, with more Indian travelers opting to visit regional destinations and iconic cultural sites within the country. This surge in domestic travel is particularly evident during festivals, long weekends, and holiday seasons, where both urban and rural areas see an influx of tourists. The convenience, affordability, and growing interest in exploring one’s own country have fuelled the demand for a wide range of accommodations, from budget hotels to luxury resorts. Also, with improved road, rail, and air connectivity, traveling to previously less-accessible destinations have become easier, further supporting this trend. Domestic travel is also being influenced by evolving consumer preferences, as more Indians are opting for off-the-beaten-path experiences, eco-tourism, and wellness retreats. Hotels are responding by developing unique offerings, such as experiential stays and tailored services that cater to Indian travellers’ growing interest in personalized experiences. Also, post-pandemic, many individuals and families are prioritizing domestic travel over international trips, leading to a greater focus on regional tourism. As a result, the domestic travel boom is not only boosting hotel occupancy rates but also encouraging further investment and expansion in the Indian hospitality sector.

Increased Focus on Sustainable Practices

Increased focus on sustainable practices is a prominent trend in the India hotel market as both consumers and operators prioritize environmental responsibility. With growing awareness about climate change and sustainability, more Indian hotels are adopting eco-friendly practices to meet the expectations of environmentally conscious travelers. This includes using energy-efficient systems, such as LED lighting and renewable energy sources, reducing water consumption with advanced technologies like low-flow fixtures, and implementing waste management strategies that minimize landfill contributions. Also, many hotels are opting for sustainable building materials, promoting recycling, and reducing single-use plastics by offering alternatives like biodegradable amenities and reusable containers. Some establishments are also focusing on sourcing locally produced food and ingredients, supporting regional farmers while reducing the carbon footprint associated with transportation. In addition to eco-friendly operations, Indian hotels are increasingly obtaining certifications such as Green Globe or EarthCheck, signaling their commitment to sustainability. Consumers are more likely to choose accommodations that align with their values, which has pushed hotel operators to make sustainable practices a key part of their branding and offerings. This trend not only responds to consumer demand but also helps hotels reduce operational costs in the long term. As sustainability continues to gain importance, the adoption of green practices will likely become a competitive differentiator for hotels in India, particularly as the market matures and travelers become more discerning about their environmental impact.

Rise of Remote Work

The rise of remote work is a significant trend shaping the India hotel market. With the global shift toward flexible working arrangements and hybrid work models, many professionals are seeking alternative workspaces outside their homes, leading to an increased demand for hotels that cater to remote workers. As a part of this, according to a recent study, as of 2023, 12.7% of full-time employees in India were working from home, and 28.2% were using a hybrid model, reflecting a major change towards remote work. This trend has given rise to the popularity of “workation” packages, where hotels offer extended stays with dedicated workspaces, high-speed internet, and office amenities, allowing guests to balance work and leisure in scenic locations. Hotels are adapting by creating business-friendly environments with comfortable desks, ergonomic chairs, and meeting rooms equipped with modern technology for virtual collaboration. Also, many properties are offering packages designed for longer stays, providing greater flexibility and competitive pricing for remote workers looking for a change of scenery while maintaining productivity. This shift is also boosting the demand for hotels in non-traditional business destinations, such as hill stations, beaches, and smaller towns, where remote workers can escape the hustle of urban life. The flexibility to work from anywhere, combined with the ability to explore new destinations, is encouraging professionals to extend their stays, increasing hotel occupancy and revenue. As remote work continues to evolve, the India hotel market is expected to witness sustained growth in the segment catering to digital nomads and remote workers, pushing hotels to further innovate and adapt to this new demand.

Segmental Insights

Booking Mode Insights

Offline dominated the India Hotel market, as many travelers still prefer to make reservations through traditional channels, such as travel agents, hotel call centers, and direct bookings at hotel reception desks. This is particularly true for older generations or those less familiar with digital platforms. Also, offline bookings offer personalized customer service, which some consumers find more reassuring when planning travel. In rural or less digitally connected areas, offline booking remains a crucial method due to limited internet access. Also, many travelers opt for offline booking to take advantage of last-minute deals, negotiate better rates, or ensure personalized accommodation, especially for group or family bookings. Despite the rise of digital channels, offline booking remains a significant segment of the Indian hotel market.

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Regional Insights

The North region dominated the India Hotel market, driven by its prominent cities like Delhi, Jaipur, Chandigarh, and Agra, which attract both domestic and international tourists. Delhi, as the national capital, serves as a major business and leisure destination, contributing significantly to hotel demand. Also, cities in Rajasthan, such as Jaipur and Udaipur, are popular tourist hotspots known for their heritage, attracting a steady flow of visitors. The region’s well-established infrastructure, including airports, highways, and rail networks, enhances connectivity and supports the growth of the hotel industry. As a result, the North region leads the market, with a diverse range of hotels catering to both leisure and business travelers.

Recent Developments

• In February 2025, Hilton has made a groundbreaking announcement, revealing plans for an extraordinary expansion in India that will see the hotel giant quadruple its room count over the next five years. This strategic move follows the company’s exceptional financial performance, surpassing expectations and reinforcing its leadership position in the global luxury travel market.
• In May 2024, Minor Hotels, a global operator with over 540 properties across 56 countries, is set to strengthen its footprint in India's dynamic hospitality market, targeting 50 new openings over the next decade. The group plans to focus on the upper-upscale and luxury segments, expecting strong demand from property owners for its renowned brands, including Anantara, Avani, and NH Collection.
• In November 2024, the Indian Hotels Company Limited, which owns The Taj, announced its expansion initiative called the 'Accelerate 2030 strategy'. This plan aims to add 700 hotels to its portfolio over the next five years. IHCL has exceeded its guidance by building a portfolio of 350 hotels, operating more than 200 hotels, and achieving record financial results for ten straight quarters.
• In December 2024, Sayaji Hotels, a hospitality group based in India, has announced plans to broaden its luxury and leisure services nationwide.New properties with 8,700 rooms will be opened in all key regions of the country as part of this growth initiative, including Tier II and Tier III cities, which are expected to play a significant role in Sayaji’s development.

Key Market Players

• The Indian Hotels Company Limited
• ITC Hotels Limited
• EIH Limited
• The Bharat Hotel
• Lemon Tree Hotels Limited
• The Leela Palaces, Hotels and Resorts
• Marriott International, Inc
• Hilton Worldwide Holdings Inc.
• Radisson Hotel Group
• Accor SA

Report Scope:

In this report, the India Hotel Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• India Hotel Market, By Ownership:

o   Independent

o   Chaine

• India Hotel Market, By Budget:

o   Economy

o   Luxury

• India Hotel Market, By Services Offered:

o   Accommodation

o   Dining

o   Meeting & Event Spaces

o   Others

• India Hotel Market, By Target Audience:

o   Business Travellers

o   Leisure Travellers

o   Couples

o   Families

• India Hotel Market, By Booking Mode:

o   Online

o   Offline

• India Hotel Market, By Region:

o   North

o   South

o   East

o   West

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the India Hotel Market.

Available Customizations:

India Hotel Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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