2025 became a year of highs and headwinds for Indian travel industry

India’s travel year began on a high-decibel note. British rock band Coldplay’s five sold-out concerts across Mumbai and Ahmedabad sent airfares, train tickets, and hotel prices soaring by nearly 20 per cent. Soon after came the Maha Kumbh in Prayagraj, Uttar Pradesh, drawing more than 660 million visitors over 45 days to take a dip in the Ganga. 

“Increasingly, we are seeing people lean towards experiences,” says Amit Damani, cofounder of luxury villa rental firm StayVista. “That explains why they are willing to fly across the country for a concert like Coldplay or congregate at a mela.” In the coming year, too, he expects events such as the cricket World Cup, concerts, and wellness activities to drive travel demand, and, in turn, demand for quality accommodation. 

Next year will open with concerts by American rock band Linkin Park and singer John Mayer in January in Bengaluru and Mumbai, followed by the month-long ICC Men’s T20 cricket World Cup starting in February. 

“As we look ahead to 2026, travel and hospitality in India are moving into a more mature, experience-led phase,” says Anuraag Bhatnagar, chief executive officer at The Leela Palaces, Hotels and Resorts. “There is greater emphasis on quality, differentiation, and long-term value  creation.” Travellers, he adds, are increasingly prioritising cultural depth, wellness, sustainability, and meaningful connection, and these expectations are shaping how luxury hospitality is delivered.

The setbacks

Yet, the year was not without disruption. India found itself caught in a geopolitical crossfire that dented travel sentiment. In April, at the peak of the tourism season in Jammu and Kashmir, a terror attack in Pahalgam claimed the lives of 26 civilians. A week-long conflict between India and Pakistan followed, with Operation Sindoor unfolding along the northwestern frontier, disrupting not only tourism but daily life in the region. 

The conflict also prompted a wave of travel advisories from embassies including the United States, United Kingdom, and Canada, negatively impacting foreign tourist arrivals, which is yet to return to its pre-pandemic peak of 10.93 million in 2019.

Tourism ministry data shows foreign tourist arrivals rebounded to 6.44 million in 2022, rose to 9.52 million in 2023, and reached 9.95 million in 2024. As of August 2025, this number stood at 5.6 million, lower than the 6.3 million recorded during the same period last year.

Looking homeward

While the pace of foreign tourist recovery remains a concern, domestic tourism has surged ahead, exacerbating a long-standing demand-supply imbalance in the hospitality sector. 

“Domestic travel and tourism in India is expected to remain a strong growth engine through 2026,” says Zubin Saxena, senior vice president and regional head for South Asia at Hilton Hotels Corporate.  “This is supported by rising disposable incomes, an expanding middle class, and improved connectivity and infrastructure.” Domestic visitor spending has already moved well above pre-pandemic levels and continues to expand, driving demand across hotels, transport, experiential travel, and destination-led offerings, he adds. Industry forecasts suggest domestic visitor volumes could nearly double from 2.5 billion trips in 2024 to around 5.2 billion by 2030, “pointing to a sustained annual growth trajectory,” Saxena says. 

A depreciating rupee is expected to further bolster domestic travel. “While outbound travel from India — especially to emerging hubs like Vietnam and Thailand — has been very strong, the falling rupee will have an impact on volumes,” says Damani. “It doesn’t mean (international) travel will stop, but Indians will increasingly gravitate towards domestic destinations.” As a result, destinations such as Rajasthan, Kerala, and Goa — traditionally reliant on foreign tourists — are now seeing a shift towards domestic demand, he adds.

Building capacity

However, sustaining travel momentum will require stronger support systems. While new airports and highways have improved connectivity, supply-side constraints continue to hamper the experience.

 

Earlier this month, India’s largest airline, IndiGo, cancelled over 5,000 flights after new Directorate General of Civil Aviation rules on pilot rest and duty hours came into effect. The disruption rippled across the sector, altering travel plans and triggering a wave of cancellations for hospitality companies. 

While the episode also brought into sharp focus the duopolistic nature of Indian aviation, dominated by just two major players, the supply constraints extend beyond the skies. 

According to hospitality consultancy firms Hotelivate and Horwath, India’s branded hotel room inventory stood at about 200,000 rooms in 2024 and is projected to reach 300,000 by 2030 — still short of demand. 

That gap, however, has fuelled record growth for hotel companies this year, while paving the way for new brands. 

Taj Hotels parent Indian Hotels reported its 14th consecutive quarter of record performance in September, closing the first half of the year with a 21 per cent rise in revenue from operations at ₹4,081 crore. ITC Hotels also announced the launch of a new brand, ‘Epiq Collection’, targeting the addition of about 1,000 keys over the medium term. 

 

NYSE-listed Hilton has also lined up eight new hotel openings in India over the coming year.