New Delhi [India], December 26 : The year 2025 has been a year of renewed optimism for India's hospitality sector, with the spiritual tourism taking the lead, driven by the historic Maha Kumbh organised in Uttar Pradesh's Prayagraj district.
Leaders in the hospitality industry said the year was shaped by a powerful convergence of spiritual, cultural, and experiential travel, with spiritual tourism emerging as a key driver for hotels.
KB Kachru, President, Hotel Association of India and Chairman- South Asia, Radisson Hotel Group, said, "2025 has been a year of renewed optimism for India's hospitality sector, marked by sustained momentum and strong demand indicators. The year was shaped by a powerful convergence of spiritual, cultural, and experiential travel, with spiritual tourism emerging as a key driver for hotels. Destinations such as Ayodhya, Jammu, Varanasi, Puri, Amritsar, and Tirupati witnessed exceptional footfall. The historic Maha Kumbh further contributed to hotel occupancy and drove demand growth in Tier-II and Tier-III markets."
"International tourists saw a steady increase, especially on India's spiritual route,s creating opportunities to develop more such destination experiences. As per various industry reports, the Indian hospitality segment had achieved exceptional growth, with Revenue Per Available Room (RevPAR) surging to 12.9% in Q2," he added.
The Maha Kumbh Mela 2025, held from Jan 13 to Feb 26, in Prayagraj was a massive Hindu pilgrimage at the Triveni Sangam (Ganges, Yamuna, mythical Saraswati), featuring millions of devotees, ascetics (Sadhus), cultural displays (Tejas Pandal), drone shows, and extensive infrastructure like pontoon bridges, celebrating spiritual purity and unity with key bathing days like Mauni Amavasya.
"India also saw a new wave of youth-driven travel demand sparked by big-ticket concerts and global performances with major headliners by Coldplay, Alan Walker, and Ed Sheeran. Coldplay's concert in Ahmedabad resulted in an estimated economic impact of Rs 641 crore Rs 392 crore flowed directly into the city's economy, and the GST revenue collected was Rs 72 crore. This exemplifies how large-scale events can significantly boost local businesses, from hotels and restaurants to transport, retail, art and handicrafts," he said.
"The country's vibrant wedding season for 2025 is estimated at 4.6 million weddings, adding another strong layer of demand, reinforcing the sector's resilience and diversity. The Government of India expects these events to collectively generate around Rs 3,000 crore in revenue, underscoring their growing importance as a driver of tourism and economic activity."
As per reports, India's hospitality sector is expected to continue its rebound, with the broader branded-hotel pool seeing around 7-8% RevPAR growth in FY2026, with ARR rising to ~Rs 8,400-8,600, supported by robust domestic demand, expanding travel infrastructure, and growing organised-sector penetration.
"We look forward to a supportive budget and remain committed to working with industry stakeholders and policymakers to build a future-ready, sustainable, and globally competitive hospitality ecosystem," KB Kachru said.
Arjun Baljee, President, Royal Orchid Hotels, said, "2025's hospitality performance (~6% revenue growth) fell short of the 7-9% optimism, with aviation shocks erasing late-year momentum and exposing over-reliance on air travel. Yet, fundamentals remain solid: domestic demand resilience, supply-demand imbalance in premium segments, and digital booking booms (up 20%) signal durability."
Speaking on the outlook for the coming year 2026, Sanjay Sethi, MD & CEO, Chalet Hotels Ltd, said, "As we look ahead to 2026, the growth drivers for Indian hospitality are both clear and durable. Business travel has returned in depth and with predictability; domestic leisure continues to broaden and mature; and MICE and weddings remain powerful demand engines. Together, these segments are well-positioned to sustain double-digit RevPAR growth for the industry."
"What differentiates this cycle is the quality of demand, like longer stays, higher spend intensity and greater forward visibility, enabling asset-led hospitality platforms to plan and execute with far greater discipline. In this environment, scale, location and portfolio balance matter."
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