The Indian hospitality industry is on track for steady growth, with revenues projected to surpass INR1.1 trillion (approximately USD12.8 billion) by the 2027 financial year, according to a report by Rubix Data Sciences. The sector is expected to grow at a compound annual growth rate (CAGR) of 10.5%, driven by domestic tourism, foreign arrivals, and the rapid expansion of the Meetings, Incentives, Conferences, and Exhibitions (MICE) segment.
Rubix CEO Mohan Ramaswamy noted that hospitality is thriving beyond metro cities, fueled by demand for local travel, spiritual tourism, and mid-range experiences. “The opportunity is vast, but so is the need for risk-aware growth,” he said. Domestic travelers contribute 50% of incremental revenue, followed by foreign tourists at 30% and MICE at 20%.
The industry’s recovery from the pandemic has been remarkable, with occupancy rates rising from 35% to 68% in FY 2024. Branded hotels reported decade-high metrics, with an average daily rate (ADR) of INR7,500 and revenue per available room (RevPAR) of INR5,439.
Western India led the resurgence, recording the highest RevPAR and occupancy rates, with high-growth markets like Rishikesh, Udaipur, and Varanasi emerging. Infrastructure investment and digital-first travel behaviors are further solidifying the sector’s strength.
However, the report also highlighted challenges, including mass cancellations following “Operation Sindoor,” which disrupted travel bookings in major cities.
Despite these hurdles, the Indian hospitality sector is poised for a transformative phase, leveraging its structural resilience and untapped opportunities.
