Tamara Hospitality Expands Strategy Around Midscale Hotels
Tamara Leisure Experiences is sharpening its focus on India’s rapidly growing midscale hotel segment, betting that the next phase of the country’s hospitality growth will be driven less by luxury resorts and more by efficient, scalable urban hotels.
The Bengaluru-based hospitality group—known for its luxury resort brand The Tamara Resorts—is increasingly positioning its midmarket and business hotel brands to tap into India’s expanding domestic travel market.
Industry experts note that the midscale segment is emerging as one of the most promising categories in the Indian hospitality industry as travel demand widens beyond luxury tourism to include business travel, religious tourism and weekend leisure trips.
Midscale Hotels Emerging as India’s Fastest Growing Hospitality Segment
Across India’s hotel development pipeline, midscale properties are expected to account for a significant share of future supply. The segment currently represents about 37% of existing branded hotel rooms and roughly 39% of the upcoming hotel pipeline, highlighting strong developer interest in this category.
Hospitality analysts say this growth is being driven by rising domestic travel demand, which increasingly favours quality accommodation at accessible price points.
Unlike luxury hotels that require high capital investments and depend heavily on international travellers, midscale properties provide developers with a more efficient model due to lower construction costs and faster stabilisation.
The cost of developing a midscale hotel in India typically ranges between ₹48 lakh and ₹69 lakh per room, significantly lower than upscale or luxury hotel developments that can exceed ₹1 crore per key.
As a result, hospitality groups are increasingly deploying capital into midscale formats that can operate across both metro cities and emerging tier-2 markets.
Tamara Hospitality’s Multi-Brand Growth Strategy
Tamara Leisure Experiences operates a diversified hospitality portfolio spanning luxury resorts, business hotels and mid-segment properties.
The group’s flagship luxury brand includes properties such as The Tamara Coorg and The Tamara Kodai, which focus on experiential travel and destination-driven hospitality.
Alongside these luxury properties, the company is expanding two other key brands:
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O by Tamara – positioned as a contemporary business hotel format for urban travellers
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Lilac Hotels – designed as a functional mid-segment hospitality offering
The Lilac brand in particular is aimed at destinations such as pilgrimage centres and industrial towns where travellers require practical accommodation rather than luxury experiences.
This multi-brand approach allows the group to target different traveller segments while maintaining operational flexibility.
Midscale Hotel Expansion Targeting Emerging Markets
One of the key pillars of Tamara Hospitality’s strategy is geographic diversification beyond major metropolitan cities.
While India’s largest hotel markets—including Mumbai, Delhi and Bengaluru—continue to dominate the country’s hospitality supply, developers are increasingly exploring opportunities in tier-2 and tier-3 cities.
Markets such as Pune, Jaipur, Kochi, Ahmedabad and Lucknow are seeing growing hotel development as infrastructure improves and domestic tourism rises.
For hotel developers, these cities offer advantages including lower land costs, faster approvals and strong demand from both business and leisure travellers.
Tamara Hospitality is aligning its expansion plans with these emerging travel corridors, where midscale hotels can achieve faster occupancy ramp-up compared with luxury projects.
Rising Costs and Competitive Pressures in Midscale Hospitality
Despite strong demand, the midscale hotel segment is not without challenges.
Construction costs across India’s hospitality sector have risen 8–12% annually due to material inflation, skilled labour shortages and regulatory complexities.
At the same time, the pricing flexibility of midscale hotels remains limited because they must remain accessible to a wider base of travellers.
Industry analysts warn that developers must carefully manage capital deployment and operating costs to ensure long-term profitability in this segment.
However, strong demand fundamentals continue to support the sector. Nationwide hotel occupancy in India recently climbed to around 68%, while average room rates and revenue per available room have also shown steady growth.
India’s Hospitality Growth Story Moves Beyond Luxury
India’s hospitality sector has traditionally been dominated by luxury hotels in major metropolitan areas and leisure destinations. But the next wave of growth is expected to come from midscale and upper-midscale formats that cater to the country’s expanding middle class.
With domestic tourism rising, business travel returning and infrastructure development opening up new destinations, midscale hotels are increasingly viewed as the most scalable growth model.
For Tamara Hospitality, this shift represents a strategic opportunity to expand its presence across multiple travel segments while maintaining its focus on experiential hospitality and responsible tourism.
As the company continues to scale its midmarket brands alongside its luxury resorts, it is positioning itself to capture a larger share of India’s evolving hospitality landscape.
