Indian hospitality sector to see 10-15 pc growth in 2025: Skye

4,830 premium & upscale hotels rooms added in India in 2024

India’s hospitality sector added 4,830 premium and upscale rooms in 2024, with occupancy expected to rise to 70–75 pc in 2025, up from 68–72 pc last year, according to Skye Hospitality. The report also highlights 36,790 sqm of new meeting space, rising medical and wellness tourism.

Skye Hospitality has released its latest study on the dynamics, trends and outlook for the Indian hospitality industry in 2025.

The report says that the hospitality industry in India will continue to enjoy high occupancy in the range of 70- 75 pc, inching up from 2024 levels of 68-72 pc, backed by domestic leisure and business travel. According to a report by ICRA, report RevPAR (Revenue per average room) will be INR 5,500-5,800, rising up from INR 5,000-5,300 in 2024.

The ICRA report also adds that India’s leading hospitality chains are expected to gain a revenue growth of 10-15 pc in 2025. The numbers also supported by an ICRA study that suggested 7-9 pc revenue growth for hospitality sector in 2025.

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In calendar year 2024, a total of 4,830 new rooms entered the premium and upscale hotel segment in India, with 2,124 of these added in the second half of the year. Of the new room supply, 31 pc is located in the North, followed by 28 pc in the South. The premium and upscale segment is nearly evenly divided, with 52 pc of rooms classified as premium and 48 pc as upscale. Alongside this growth, 36,790 sqm of hotel-based meeting and banquet space was introduced during the year, including 14,186 sqm in the second half alone, says the report by Skye.

“The Hospitality sector in India looks resilient for 2025 with an expected 10-15 pc rise in occupancy in major hospitality business chains. Meanwhile the growth will not be just about the numbers but also depth of offerings. Indian travellers are evolving with more focus on authentic stays and customised experiences that can match individual tastes. This means hotels will have to recalibrate services, relook positioning and be open towards more customisation.” says Ankit Kansal, MD, Skye Hospitality.

The Skye report also adds that medical tourism market is set to reach USD 13 billion in 2025, from USD 1.8 billion in 2015, growing at a CAGR of 21.9 pc. Annually 2 million patients come to India from around 80 countries all over the world. This will unlock opportunities for new hotels, resorts and service apartments, especially in city centre, near major hospitals and healthcare centres.

“The traditional boundaries between wellness, vacation and tourism is blurring. Urban households increasingly want to take frequent/ extended breaks to rejuvenate mind & body, detoxify and enrol for mindfulness & yoga retreats. As lifestyle related diseases are proliferating, people now want to heal the root cause rather than quick fixes. This is unfolding new opportunities in the wellness tourism value chain,” says Taran Chhabra, Director, Skye Hospitality.

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According to the report, multiple luxury and other hospitality brands are planning huge investments and expansion in the country. Some of these include Adani, who is planning to invest USD 2 billion to develop a large convention centre in Vile Parle, near the international airport in Mumbai. The project will have a built-up area of approximately 1,11,484 sqm. As part of the Sabarmati riverfront development, a new business-cum-cultural centre has also been proposed, with a built-up area of around 39,948 sqm.

Meanwhile, HSVP is constructing a new convention centre in Sector 78, Faridabad, covering 33,184 sqm and offering a built-up area of 47,752 sqm. In addition, IHCL has announced plans to expand its portfolio to 700 projects by 2030, with a focus on improving margins, monetising assets, and enhancing operational efficiency.

“In the coming time, Indian hospitality will continue to grow fast at a sustained pace. Growth will be visible in both mainstay tourism as well as other alternate forms The former will be the dominant market force. Yet we will see the latter ramping up in the form of boutique resorts, private villas with bespoke services, branded homes and nature resorts,” adds Kansal.