India Hotel Industry to Reach $31 Billion by 2029, Driven by Domestic Travel

India’s hotel industry is expected to witness steady market expansion over the medium term, according to a recent report by real estate consultant CBRE. The sector’s market size is estimated to rise from nearly USD 24.6 billion in 2024 to around USD 31 billion by 2029.

Growth is expected to be supported primarily by domestic travel demand across leisure and business segments. The report also highlights continued operational resilience despite global and domestic challenges during 2025.

Market Size Growth Projections

CBRE estimates that India’s hotel industry market size stood at approximately USD 24.6 billion in 2024. This figure is projected to increase to about USD 31 billion by 2029, reflecting sustained demand growth across regions.

Domestic tourism is identified as the leading contributor to this expansion. The data indicates a multi-year growth trajectory supported by improving travel infrastructure and hotel penetration.

Role of Domestic Tourism Demand

Domestic tourism recorded a significant year-on-year rise of 40% in 2025, reaching nearly 4.1 billion visits. This sharp increase has been a key growth driver for hotel occupancies across urban and leisure destinations.

CBRE noted that domestic travellers increasingly supported demand during periods of international travel volatility. The report suggests that this trend has strengthened the sector’s revenue base.

Room Addition Plans by Listed Operators

CBRE stated that India’s listed hotel operators are projected to add more than 70,000 keys by 2030. These additions are expected to be spread across metro cities, tier 2 markets, and emerging tourism hubs.

The report did not disclose the current operational room inventory of listed hotel companies. Expansion plans are aimed at meeting rising demand and improving market coverage.

Operational Performance Indicators

In 2025, overall hotel occupancy levels reached around 64%, reflecting healthy capacity utilisation. Revenue per available room increased by 11% on a year-on-year basis during the period.

Average daily rates also rose by 8.7%, indicating pricing strength across key markets. CBRE noted that these gains were achieved despite challenges such as geopolitical tensions and aviation sector disruptions.

Read More: Airlines Must Offer 60% Seats Free, Seat Families Together.

Conclusion

CBRE’s outlook points to continued growth momentum for India’s hotel industry over the next few years. Rising domestic tourism, steady occupancy levels, and improving room rates are supporting revenue expansion.

Planned capacity additions by listed hotel operators indicate long-term confidence in the sector. Investment activity is expected to remain active through 2026, backed by sustained travel demand and interest in scalable hospitality platforms.

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