India Hotel Market to Hit $31Bn by 2029, 70,000 Keys Added
India’s hotel industry is projected to reach $31 billion by 2029, with over 70,000 new keys expected by 2030, driven by domestic tourism growth.
nishathapa 
New Delhi, April 14, 2026: India’s hotel industry is projected to expand to approximately USD 31 billion by 2029 from nearly USD 24.6 billion in 2024, supported by strong domestic tourism demand and improving travel infrastructure, according to a report by CBRE. The sector is also expected to see the addition of over 70,000 hotel keys by 2030.
Market size to grow to $31 billion by 2029
The report highlights a steady upward trajectory for India’s hospitality sector as it transitions from post-pandemic recovery into a more structured growth phase. The market size, estimated at around USD 24.6 billion in 2024, is expected to reach approximately USD 31 billion by 2029, reflecting sustained expansion across both leisure and business travel segments.
This growth is largely attributed to the strengthening of domestic tourism, which continues to drive occupancy and revenue across hotel categories. The sector is also benefiting from rising disposable incomes and improved accessibility to key destinations through infrastructure development.
According to CBRE, the industry is witnessing a shift toward experience-driven travel, with hotels increasingly aligning offerings to evolving consumer preferences, particularly in leisure, cultural, and spiritual tourism segments.
Domestic tourism drives demand surge
Domestic travel remains the primary growth engine for the hospitality sector. The report notes that domestic tourism recorded a 40 per cent year-on-year increase, reaching 4.1 billion visits in 2025. This surge has significantly contributed to higher demand for accommodation across urban, leisure, and pilgrimage destinations.
The rise in domestic travel has led to a broader distribution of demand beyond traditional metro cities, with increased activity in tier II and tier III locations. This shift is encouraging hotel operators to expand their footprint in emerging markets where branded supply remains limited.
Demand is also becoming more diversified, with travellers seeking tailored experiences rather than standardised offerings. This trend is influencing hotel development strategies and service models across the sector.
70,000 new hotel keys expected by 2030
India’s listed hotel operators are expected to add more than 70,000 new rooms by 2030, reflecting a strong pipeline of development activity. The expansion is being driven by a combination of new projects, asset conversions, and management contract-based growth models.
The report does not specify the current total room inventory of listed operators but indicates that supply growth is being aligned with demand trends, particularly in high-growth travel corridors and underserved markets.
The increase in room supply is also expected to support the sector’s long-term growth by addressing capacity constraints in key destinations and enabling operators to capture rising demand more effectively.
Operational performance strengthens in 2025
The hospitality sector maintained strong performance indicators throughout 2025 despite external challenges such as geopolitical tensions and disruptions in the aviation sector. Overall occupancy levels reached approximately 64 per cent during the year, indicating stable demand recovery.
Revenue per available room (RevPAR) recorded an 11 per cent year-on-year increase, surpassing the 9 per cent growth seen in 2024. Average daily rates (ADR) also rose by 8.7 per cent, reflecting improved pricing power among hotel operators.
These performance metrics suggest that the sector is entering a phase of pricing stability and operational efficiency, supported by consistent demand and disciplined supply additions.
Investment activity to remain strong through 2026
CBRE expects investment activity in India’s hospitality sector to remain active through 2026, driven by sustained travel demand and growing investor interest in scalable hospitality platforms. Institutional investors are increasingly exploring opportunities in both operational assets and development projects.
The sector is also witnessing a strategic shift toward asset-light expansion models, including management contracts and franchise agreements, which allow operators to scale while maintaining capital efficiency.
According to Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa at CBRE, the industry’s growth reflects broader economic resilience and structural changes within the travel ecosystem. He noted that the sector’s expansion is supported by rising incomes, improved connectivity, and increasing demand for experience-led travel.
The report indicates that as the industry continues to mature, it is likely to see sustained expansion supported by domestic demand, infrastructure development, and evolving consumer expectations, positioning hospitality as a key component of India’s broader economic growth.
