India hotel growth shifts to demand-led, asset-light strategy, says Radisson Hotel Group executive

India’s hotel sector is shifting from capital-led expansion to a demand-driven, asset-light growth model in 2026, a senior executive at Radisson Hotel Group said, citing evolving market conditions, investor preferences and operational efficiency as key drivers behind the transition across major and emerging markets.

Shift toward demand-led expansion

Nikhil Sharma, a senior executive at Radisson Hotel Group, said the company is aligning its India growth strategy with demand patterns rather than pursuing aggressive capital-intensive expansion. He noted that hotel development decisions are increasingly based on location-specific demand, occupancy potential and revenue visibility.

The executive stated that operators are focusing on markets with proven demand fundamentals, including business hubs, pilgrimage destinations and leisure corridors. This approach aims to reduce financial risk and improve long-term sustainability of hotel assets.

He added that developers and operators are prioritising performance metrics such as average room rates and occupancy levels before committing to new projects.

Adoption of asset-light model

The company highlighted a growing preference for asset-light models, including management contracts and franchise agreements, instead of owning hotel properties. This allows hotel brands to expand their footprint without significant capital deployment.

Sharma said this model provides flexibility and scalability, enabling faster expansion across multiple locations. It also aligns with investor expectations for reduced capital exposure and quicker returns.

He noted that partnerships with local developers and property owners have become central to expansion strategies in India’s hospitality sector.

Market dynamics influencing strategy

The shift in strategy comes amid changing market dynamics, including fluctuations in construction costs, land prices and financing conditions. Industry participants have been reassessing expansion plans in response to these factors.

Sharma said that demand recovery in both domestic and international travel has encouraged operators to focus on optimising existing assets and selectively expanding into high-performing markets.

He added that secondary and tertiary cities are increasingly being evaluated for new hotel projects due to improving connectivity and rising travel demand.

Operational focus and efficiency

The executive emphasised that operational efficiency is a key component of the new growth approach. Hotel operators are investing in technology, revenue management systems and cost optimisation measures to enhance profitability.

He said that improving guest experience while maintaining cost discipline remains a priority, particularly in competitive urban markets. Brands are also standardising operations across properties to ensure consistent service delivery.

According to Sharma, asset-light expansion supports better allocation of resources toward operations and brand development.

Industry outlook and current status

Industry stakeholders expect the demand-led, asset-light model to continue shaping hotel development in India over the coming years. The approach is being adopted by multiple domestic and international operators seeking sustainable growth.

Radisson Hotel Group said it will continue to evaluate opportunities in India using this framework, focusing on strategic partnerships and market-driven expansion decisions.

The company indicated that its current pipeline reflects this shift, with several projects under management or franchise agreements rather than direct ownership as of 2026.