New Delhi [India], May 14 : The Indian hospitality industry is likely to witness a strong growth trajectory, despite renewed tensions in the subcontinent and broader geopolitical uncertainty, says a report by Rubix Data Sciences said.
The report projects a robust growth for India's hospitality sector, with the market expected to surpass Rs1.1 trillion in revenue by FY2027, growing at a CAGR of 10.5 per cent.
This surge is primarily attributed to the resurgence of domestic tourism, the increasing influx of Foreign Tourist Arrivals (FTAs), and the rapid expansion of the Meetings, Incentives, Conferences, and Exhibitions (MICE) segment." FTAs, being a key driver of premium hotel performance, are projected to reach 30.5 million by 2028.
"Rubix also highlights a shift in demand drivers, with domestic travellers contributing 50 per cent of incremental revenue growth, followed by foreign tourist arrivals at 30 per cent and the MICE segment at 20 per cent."
India's hospitality sector witnessed a remarkable recovery from the pandemic's impact, with occupancy rates rebounding from a low of 35 per cent to 68 per cent in FY2024. Branded and organized hotels have particularly excelled, achieving decade-high figures with an Average Daily Rate (ADR) of Rs7,500 and a Revenue Per Available Room (RevPAR) of Rs5,439.
The western part of India saw the highest RevPAR and maximum occupancy rate of 69.5 per cent. While destinations like Rishikesh, Udaipur, and Varanasi are emerging as high-yield markets.
"India's hospitality sector is no longer metro-centric; it is thriving in new routes driven by local demand, spiritual tourism, and mid-range experiences. With the industry set to cross $1 trillion by FY2027, the size of the opportunity is huge, but so is the need for risk-aware growth," said Mohan Ramaswamy, CEO and Co-Founder, Rubix Data Sciences.
"Supported by strong infrastructure spending, state-level tourism pushes, and digital-first travel behavior, India's hospitality industry is entering a structurally stronger phase," the report added.
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