India Hotel Sector to Add 70,000 Keys by 2030: CBRE

NEW DELHI – April 14, 2026 – India’s hotel sector is projected to add more than 70,000 keys by 2030, as listed hotel operators accelerate expansion to capitalise on sustained demand growth, according to the India Alternate Sectors Outlook 2026 report released by CBRE South Asia Pvt. Ltd.

The sector is entering a phase of structural maturity following its post-pandemic recovery, supported by disciplined expansion strategies, stable pricing, and increasing investor participation. The report highlights a shift towards long-term growth fundamentals driven by domestic travel and evolving consumer preferences.

Market size and demand fundamentals strengthen outlook

India’s hospitality market is expected to grow from approximately USD 24.6 billion in 2024 to around USD 31 billion by 2029, reflecting steady expansion backed by strong demand fundamentals. Domestic tourism continues to be the primary growth driver, recording a 40 percent year-on-year increase to 4.1 billion visits in 2025.

The rise in domestic travel is supported by higher disposable incomes, improved infrastructure, and enhanced connectivity across regions. According to CBRE, the sector is increasingly benefiting from diversified demand across leisure, religious, and business travel segments.

Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa at CBRE, said the industry’s trajectory reflects economic resilience and a shift toward experience-driven travel, with institutional demand expanding across cultural and spiritual destinations.

Performance indicators show sustained growth momentum

The sector maintained strong operational performance in 2025 despite external challenges such as geopolitical uncertainties and aviation disruptions. Average occupancy levels reached approximately 64 percent, supporting improved financial outcomes for hotel operators.

Revenue per available room (RevPAR) increased by 11 percent year-on-year, exceeding the 9 percent growth recorded in 2024, while average daily rates (ADR) rose by 8.7 percent. These indicators point to strengthening pricing power and stable demand across key markets.

The performance reflects a more balanced recovery phase transitioning into sustained growth, with operators focusing on profitability and operational efficiency alongside expansion.

Premiumisation drives supply pipeline shift

The supply pipeline in 2025 showed a clear shift toward premium segments, with upper midscale, upscale, and upper upscale categories accounting for approximately 60 percent of new hotel openings. This trend aligns with changing consumer preferences, as travellers increasingly seek higher-quality and experience-led accommodations.

Developers and operators are also focusing on integrated and lifestyle-oriented assets, including mixed-use developments and residential-style hospitality offerings, targeting high-net-worth individuals and long-stay segments.

This move toward premiumisation indicates a strategic repositioning of supply to capture higher-yield opportunities in both urban and leisure markets.

Investment activity accelerates with institutional interest

Investment activity in the hospitality sector has gained momentum since 2024, driven by increased participation from institutional investors. Hotel transaction volumes reached USD 456 million in 2025, marking a 2.5-fold increase compared to USD 184 million in the previous year.

The report highlights a growing preference for portfolio-led investments and strategic acquisitions, with operators also exploring capital markets through initial public offerings to fund expansion plans.

Rami Kaushal, Managing Director, Consulting and Valuations at CBRE, noted that investor focus is shifting toward diversification into leisure destinations, pilgrimage centres, and emerging commercial hubs with limited branded supply.

This trend is expected to support consolidation activity and mergers and acquisitions as companies seek to scale their platforms.

Asset-light models and expansion into emerging markets

Hotel operators are increasingly adopting asset-light growth strategies, including management contracts and franchise agreements, to expand their footprint while maintaining capital efficiency. This approach is enhancing balance sheet flexibility and strengthening the sector’s attractiveness to institutional investors.

Expansion is also extending into tier II and tier III cities, where improving infrastructure and connectivity are unlocking new opportunities. These markets, along with pilgrimage and heritage destinations, are emerging as key demand drivers due to year-round travel activity.

The large base of independent and unbranded hotels in India presents additional opportunities for brand conversions and portfolio aggregation, further supporting sector growth.

Policy measures, including GST rationalisation in September 2025 and initiatives outlined in the Union Budget FY2026–27, are expected to improve competitiveness and support long-term development through enhanced training and infrastructure.

With sustained travel demand, increasing investor confidence, and a shift toward structured expansion strategies, India’s hotel sector is positioned for continued growth, with the addition of over 70,000 keys by 2030 reflecting the scale of upcoming development across the country.