India’s travel and tourism sector is set to enjoy strong growth over the coming years, becoming a major powerhouse of economic growth for the country.
Consultants Global Asset Solutions expect the country will see a compound annual growth rate of over 9.3%, a rate that will see the sector double in scale over the next five to seven years. By the end of the period, travel and tourism could be contributing more than USD550 billion to the country’s coffers.
Boosted by home market strength
In contrast with some other Asian markets, where populations are maturing, India has one major benefit. A strong population growth within the country means this growth in travel demand will be driven by domestic tourism, with international visitor numbers a further boost.
Hotel developers are responding to this optimistic outlook, by delivering new projects to meet demand. India has the second largest hotel pipeline in Asia Pacific, measured by advisors at 690 live projects, as of early 2025. Bearing in mind the challenge of researching detailed data across the country, the actual figure could be higher still.
In the Mumbai region alone, the Top Hotel Projects database lists over 35 live projects. Those already under construction include a Ritz-Carlton, St Regis and Marriott Marquis, all for the Marriott group. Local operator Indian Hotels is building its Taj Mahal Palace hotel, a SeleQtions hotel in Bandra, and a further Taj property at Delhi airport.
Hotel operational performance is improving, thanks to the growing market demand. In 2024-25, the market recorded occupancy at an average 68.5%, while average room rates were up 5.8% year on year, breaching the USD100 per night barrier.
“Revpar is expected to grow further in 2025 and beyond,” said Atul Bhalla, partner, India at Global Asset Solutions. “While India’s absolute revpar still trails the more mature markets of the US and Europe, we are seeing clear upside, particularly in Tier two and three cities, where infrastructure, weddings, spiritual tourism and wellness are expanding demand.”
For hotel operators, the challenge remains converting reservations into profits. Global Asset Solutions calculates the average net operating margin at Indian hotels at around 28-32%, sitting ahead of other Asian markets, but behind the performance achieved in European markets such as France and Italy.
Deal volume is growing
The consultants say India’s hotel market recorded USD340 million in deals in 2024. Several hotel groups have also tapped the public markets, drawing in investment to enable their growth. Juniper Hotels and Schloss Hotels, which both listed, between them pulled in over USD600 million of investment.
The country has spent the last decade substantially improving its transport infrastructure, making India easier to get to, and to get around. Notably India’s airport count went from 74 in 2014, to 159 a decade later, while better roads have helped, too.
