India will require 1.9 lakh to 2.1 lakh additional hotel rooms by 2035, translating into 120–125 million sq ft of hospitality real estate, as demand from business, leisure and spiritual tourism drives sectoral growth, according to a report by CBRE.
India’s organised hospitality sector had around 4.5 lakh rooms, with hotel occupancy at nearly 64% at the end of 2025. Revenue per available room (RevPAR) rose 11% in 2025 to approximately INR 5,500, the report said.
The additional supply requirement spans economy, midscale, upscale and luxury hotels. The upscale segment is projected to need around 43,000 rooms by 2035, while midscale hotels could require another 42,000 rooms. Luxury hotels are expected to account for demand for approximately 29,000 additional rooms.
Demand is being supported by rising incomes, infrastructure development and changing travel preferences, alongside growing interest in premium stays and experience-led travel. Limited supply additions in the upscale and luxury categories have also supported room rates and occupancy, CBRE said.
The report identified opportunities in emerging leisure and cultural destinations, supported by improved connectivity and demand for spiritual tourism, wellness retreats and experiential travel. Major gateway markets are expected to offer scope for luxury and upper-upscale hotels, backed by corporate travel, meetings, incentives, conferences and exhibitions (MICE), and international demand.
India’s hospitality sector attracted around USD 905 million in real estate investments between 2024 and the first half of 2026. Hotel operators are increasingly using management contracts and franchise partnerships to expand with lower capital commitments, while investors are exploring larger platforms and strategic joint ventures, the report added.
