Spending on experiences to outpace physical goods in India: Report

Indian households are expected to increase spending on experiences faster than physical goods through 2030, with hotel accommodation emerging as the fastest-growing category

Indian households are projected to increase spending on experiences at a faster pace than on physical goods over the next five years, according to research by real estate consultant CBRE. Citing Oxford Economics data, the report estimates that expenditure on physical goods will grow at a compound annual growth rate (CAGR) of 9.1 per cent between 2025 and 2030, while spending on experiences is expected to expand at a higher CAGR of 10.3 per cent during the same period.

 

The findings highlighted in CBRE’s report “Gen Z Checks In: The Rise of the Lifestyle Hotel” underpin a shift in consumer preferences towards experience-led consumption. Among experiential categories, spending on hotel accommodation is forecast to register the strongest growth, rising at a 10.6 per cent CAGR through 2030.

 

 

“The contemporary consumer no longer just purchases lodging but wants unique, culturally immersive, and digitally shareable environments,” said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE.

 

The analysis further noted that the pandemic significantly accelerated the shift towards experience-led spending. Since 2022, pent-up demand and consumers' desire to make up for missed opportunities have fuelled spending on travel, dining, entertainment and other experiences.

 

The consultant further reported that the trend is being driven largely by Gen Z, at present the largest demographic cohort in the Asia-Pacific region. This demographic cohort, born between 1997 and 2012, is entering the workforce and attaining financial independence, boosting its spending, which is projected to grow faster than that of any other living generation.

 

According to the report, Gen Z travellers increasingly seek visually distinctive, curated spaces that serve as both immersive experiences and social media-friendly backdrops. They also value personalised service over standardised hospitality offerings, and favour communal spaces that host experiential activities such as wine tastings, live acoustic performances and local cultural events. Wellness has become a core expectation, while seamless technology is now considered a baseline requirement.

 

“This structural shift towards experiential consumption is an enduring macroeconomic trend. For property owners and institutional investors, the lifestyle hotel segment represents a compelling double-win: measurable RevPAR and ADR premiums over standardized assets, and a capital-efficient conversion pathway that maximizes long-term asset value,” Magazine added.

 

Ada Choi, CFA, Head of Research, Asia Pacific, CBRE, said, “The experience economy is not a trend but a structural reset. The hospitality sector in the APAC region is at an exciting point in this journey. In India specifically, rising incomes, a maturing Gen Z consumer base, and a significant undersupply of lifestyle hospitality products are converging to create one of the most attractive investment environments in the region.”

 

According to CBRE, a new category of property, the lifestyle hotel, has emerged as the industry’s answer to this generational demand. Unlike boutique hotels or global chains, these hotels occupy a middle ground, combining the design and local character of an independent property with the operational scale, distribution networks, and loyalty programmes of an institutional brand. In India, the penetration of lifestyle hotels remains low compared with markets such as Singapore and Hong Kong.

 

Between 2015 and 2025, overall hotel supply across the Asia-Pacific region expanded at a steady 5 per cent CAGR. On the other hand, lifestyle hotels recorded a much faster 19 per cent CAGR during the same period. The momentum is expected to continue through 2030, with lifestyle hotel supply projected to grow at 10 per cent annually compared with the broader hotel market.

 

Further, CBRE reported that developers are increasingly turning to existing properties rather than building from scratch, given rising land costs and construction expenses. Older, independent, unbranded hotels, of which India has a significant stock, are being converted and repositioned as lifestyle properties, often at a fraction of the cost of new development.

 

Assets valued under $100 million grew from 31 per cent of total hotel investment volume across Asia Pacific in 2020 to 42 per cent by 2025, with about 30 per cent of traded assets comprising independent hotels ripe for repositioning.

 

CBRE suggested that developers should capitalise on the opportunity through the adoption of a market-specific strategy, identification of local gaps, design flexibility, and the use of public spaces and food and beverage (F&B) offerings as key demand drivers.