Indian Hospitality Sector Poised for Stable Growth by 2026
The Indian hospitality industry is on track for a 6-8% revenue growth in 2026, with steady domestic demand driving the sector. Despite subdued foreign arrivals, infrastructure improvements and MICE events bolster growth. Supply additions lag demand due to land scarcity in urban areas, with management contracts leading expansion.
- Country:
- India
The Indian hospitality sector is expected to witness revenue growth of 6-8% by fiscal year 2026, according to a report by ICRA (Investment Information and Credit Rating Agency).
ICRA, after observing three years of robust growth, revised its industry outlook from 'Positive' to 'Stable'. During this period, premium hotel occupancy in India is anticipated to remain strong at 72-74% in FY2026, slightly up from 70-72% in FY2024 and FY2025. Average room rates for premium hotels are projected to rise, driven by limited supply and continued renovations.
Jitin Makkar, Senior Vice President and Group Head of Corporate Ratings at ICRA, noted stable growth prospects in the sector after significant domestic and business travel demand. While foreign tourist arrivals remain low due to recent global events, domestic tourism continues to be a key driver, supported by enhanced infrastructure and air connectivity. The supply of hotel rooms is expected to fall short of demand in the short term, as challenges in urban land availability persist, with future hotel supply expected to stem from rebranding and suburban projects.
(With inputs from agencies.)
Google News