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Hotels and Hospitality in India

The Future of Indian Hospitality

Where India's hotel industry is heading - new cities, spiritual tourism, technology and sustainability - and a recap of the module.

India’s hospitality industry has strong growth prospects.

  • Tier-2 and pilgrimage towns: Ayodhya, Varanasi and others attract new hotels.
  • Domestic tourism growth with rising incomes.
  • New airports opening destinations.
  • Technology: digital check-in, dynamic pricing and AI.
  • Sustainability: water and energy efficiency, local sourcing.
  • Experiential travel and wellness retreats.

Challenges

  • Room shortages in key cities.
  • Staff shortages and training.
  • High taxes and approvals.
  • Infrastructure in tourist areas.

Module recap

  • India’s hotels range from luxury to unbranded, with domestic demand dominant.
  • Occupancy, ADR and RevPAR measure performance.
  • Asset-light models dominate brand expansion.
  • The Taj began in 1903 and became India’s largest hotel group.
  • OYO grew fast, stumbled and recovered.
  • Homestays add supply and rural income.
  • India has too few branded rooms.
  • Weddings and events drive revenue.
  • Hotels are labour-intensive employers.
  • GST varies by room tariff.
  • OTAs charge high commissions.
The new airport town

When a new airport opens near a hill town, three hotel chains announce properties within a year, anticipating a surge of visitors.

Thinking hotels depend only on foreign tourists

Domestic travel, weddings and events drive growth.

Key takeaways
  • Tier-2 and pilgrimage towns are growing hotel markets.
  • Technology and sustainability are reshaping hotels.
  • Room shortages and staffing are challenges.
  • Domestic demand underpins growth.
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