Luxury rush: Hospitality industry may add 100,000 keys in 5 years

Ascott aims to double rooms to 12,000 by 2028; Hilton Hotels plans to grow operations by 10x in the next 10 years

The country’s hospitality industry is expected to record one of its fastest growth rates in investment and expansion between 2024 and 2026, sector executives told Business Standard. 

The industry is expected to add over 100,000 rooms in five years, said Manav Thadani, chairman, Hotelivate, at the Hotel Investment Conference — South Asia (Hicsa) 2025. This is an increase of 20-30 per cent over 2024. He added earlier 7,000-8,000 rooms used to be added each year, and now the pace had increased to 12,000-15,000 for the branded hotel supply.  

Executives stated this growth was driven by the fast-growing middle-income segment, a surge in domestic tourism, and a demand-supply gap in the Indian market. 

K B Kachru, chairman, South Asia, Radisson Hotel group, and president, Hotel Association of India, said this fast pace was due to low inventories in the market (less than 200,000 rooms at present). He added last year investment in hospitality increased, anticipating the trend to continue till next year. 

There is a growth opportunity for upscale and upper-upscale segments in India, he said. 

Ajay Bakaya, chairman, Sarovar Hotels, and director, Louvre Hotels, India, said this period was among the busiest with similar expansion being observed during India’s economic liberalisation. 

A top executive at a hotel asset-management firm said the period 2004-06 had been one the of the busiest for the sector, and it was followed by a period of lull for almost a decade but again in 2024-26, the industry was observing its busiest period (in terms of deals and investment). 

Last year, more than 200 hotels were opened (operational hotels) with over 13,800 keys being added to the market, according to the data given by HVS Anarock. In December, the industry had over 190,000 keys. 

The India Hotel Market Review 2024, by Horwath Hotel, Tourism and Leisure, notes the industry is expected to surpass 300,000 rooms by 2029. 

Ascott, a wholly owned subsidiary of CapitaLand Investment, is aiming to double its portfolio in India to 12,000 rooms by 2028 as against about 5,500 rooms at the end of 2024. 

“India is an important inbound and outbound market for Ascott, with strong growth potential, as it continues to evolve into one of the world’s largest economies,” said Kevin Goh, chief executive officer (CEO), Ascott in a statement. 

“With a rapidly growing middle class, increasing disposable incomes and improving infrastructure, India’s economic landscape is unlocking opportunities for its travel and hospitality sectors. Despite promising prospects, the supply of branded hotel rooms in India remains limited, creating a significant demand-supply gap that opens up tremendous potential for Ascott to contribute to the country’s hospitality growth.” 

Ranju Alex, regional vice-president, South Asia, Marriott International, said at a panel discussion (Hicsa) about 70 per cent of the hotel’s signings in India had been in the luxury segment, while 20 per cent were for resort and leisure. She said India was on the threshold of becoming the third-largest market globally for Marriott International, noting that the chain had crossed ₹10,000 crore in top line in 2024. 

At the same panel discussion, Nikhil Sharma, managing director and chief operating officer, South Asia, Radisson Hotel group, said last year had been a “golden” period for hotel signings in India, with most hotels observing record numbers. Last year the group had 36 signings with the international hotel brand crossing 20 this year.  

On the other hand, Vilas Pawar, CEO, managed and franchise division, Lemon Tree Hotels, said his group had 50 signings in 2024 with the firm’s revenue growing 15-20 per cent year-on-year since Covid.  He anticipates similar growth in the coming years.  

Zubin Saxena, senior vice-president and regional head, South Asia, Hilton Hotels, said: “The services sector is a huge growth story for India,” adding Hilton’s strategy in India was to have 10 times growth in 10 years.