Hotel industry in India - statistics & facts
In recent years, both foreign tourist arrivals as well as domestic tourism in India was on the rise. The latter offers consistent sustenance for the country’s hotel industry. From guest houses in the Himalayas, palace hotels in Rajasthan, innovative, niche hotels in one of the megacities, beach resorts in Goa, to the houseboats in Kerala: India offers a large variety of hotels for all kinds of travelers from backpackers to wellness tourists or business travelers.
During the last decade, the tourism sector accounted for a significant share in India’s economy. The main driver of the sector was the hotel industry, accompanied by tour operations and the restaurant segment in tourist areas. Hotels were estimated to be valued at over 50 billion U.S. dollars by 2027, driven largely by star hotels in terms of category.
Additionally, increasing awareness and the need for sustainability, as well as the boost for domestic travel has encouraged cultural exploration of the country’s historical landmarks through heritage hotels. The two-fold impact of preserving and modernizing these sites creates a unique position for the country’s travel and tourism market.
What makes the hotel market in India thrive?
Revenues in the hotel market were mostly steered by business events and the country’s trillion-rupee wedding market. While business travel resurged after nearly three-years of travel restrictions following the pandemic, events hosted across the country in 2023 were an important catalyst. The G20 summit in Delhi, along with the ICC Men’s Cricket World Cup propelled occupancy rates and caused a surge in average hotel room prices in key urban centers including New Delhi, Mumbai, and Chennai. Religious tourism is a reliable source of revenue for hotels in the country, aided by the government’s investment into tourism infrastructure in recent years.Impact from the domestic tourism boost
To increase India’s competitiveness the government had reduced the goods and services tax (GST) for hotels in 2019. Other governmental measures during the pandemic included the webinar-series “Dekho Apna Desh” to boost domestic travel as well as initiating the assessment and awareness program SAATHI (System for Assessment, Awareness and Training for Hospitality Industry).Sustainability & luxurious travel
The pandemic accelerated the demand in the wellness industry across the country. This was especially the case for the urban middle class and their desire for a break from fast-paced city lives. Often, this involved travel to less crowded destinations with an indulgence for spa and wellness services.Additionally, increasing awareness and the need for sustainability, as well as the boost for domestic travel has encouraged cultural exploration of the country’s historical landmarks through heritage hotels. The two-fold impact of preserving and modernizing these sites creates a unique position for the country’s travel and tourism market.
