India is emerging as a central force in the Asia Pacific hospitality sector, driving domestic growth and outbound travel to key regional destinations. Despite a 19% drop in regional investment in the first quarter of 2025, India’s role is reshaping the landscape and supporting valuations.
According to Nikhil Shah, Managing Director for Hospitality and Alternatives at Colliers India, “India is driving a structural shift in Asia Pacific’s hospitality landscape, with resilient domestic growth while emerging as a powerful outbound force.” The Indian hospitality sector outlook remains strong, with tier II cities set to drive future growth, particularly in spiritual tourism destinations like Ayodhya, Dwarka, Puri, Shirdi, Tirupati, and Varanasi.
Puneet Chhatwal, Managing Director and CEO of Indian Hotels Co. Ltd, noted that high tax rates remain a major barrier to building global hospitality brands. “If you are the highest taxed sector in every possible way—GST, excise, paying all charges during COVID when your business was shut—with the least budget for promotion or marketing the destination and just relying on what we have, then how are you going to create those kinds of global brands on your own?”
The growing Indian outbound travel market is fueling hospitality in destinations like Thailand, Vietnam, and South Korea. Rising incomes and demand for experience-based travel provide steady, year-round demand, supporting room rates and changing regional hospitality dynamics.
