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Skift
21-05-2025
- Business
- Skift
Indian Hotel Industry to Reach $13 Billion by 2027: What's Driving This Growth
Domestic and inbound tourism, along with a growing MICE segment, are the Indian hotel industry's biggest bets, as demand continues to outpace supply. The Indian hotel sector is expected to cross INR 1 trillion ($11.7 billion) by the end of the current financial year and touch INR 1.1 trillion ($13 billion) by 2026-27, according to risk management and monitoring platform Rubix Data Sciences. This figure stood at INR 820 billion ($9.6 billion) at the end of the 2024 fiscal year. In its recent industry report, the firm projected that the country's hospitality sector will grow 10.5% annually till March 2027. Three key factors are expected to drive this growth: domestic travelers, foreign arrivals, and MICE (meetings, incentives, conferences, and exhibitions) segment. Rubix estimates that domestic travelers will contribute 50% of the incremental growth in revenue, while foreign tourists are projected to account for a 30% revenue share. The MICE segment is expected to account for the remaining 20% increase in revenue, the report said. 'These drivers are expected to remain sustainable over the next three years and will significantly fuel the sector's expansion,' it said. On foreign tourist arrivals (FTAs), the report said that there was a positive correlation between foreign tourists and the average daily rates (ADRs) in the premium hotel segment. 'For businesses like Chalet Hotels, which derive 35%-40% of their revenue from foreign guests, FTAs are a key driver of ADR performance. Foreign tourists, with higher spending power and a preference for luxury services, are vital contributors to the demand for premium rooms.' It added that by 2028, foreign tourist arrivals in India are expected to reach nearly 30.5 million, up from 9.6 million in 2024. However, India is still struggling with low inbound numbers exacerbated by a low global tourism promotion budget. Growing Occupancy: According to the report, the occupancy rates of hotels is expected to reach 73% by 2026-27, up from 68% in 2024 financial year and the all-time low of 35% during the pandemic. This is expected as demand is projected to continue outstripping supply. 'Demand is projected to grow at a 10.5% annual rate, while supply is expected to increase by only 8% annually. This supply-demand imbalance is likely to reduce vacancy rates and drive higher occupancy levels, as hotels face increased pressure to meet the rising demand,' it said. This higher demand is driving more hotel companies into India. In April, six international hotel brands announced deals in India within a span of four days. Singapore-based The Ascott Limited announced its expansion plans with a focus on Tier-2 and 3 cities. Its Chief Operating Officer for EMEA & South Asia, Lee Ngor Houai said that there is a 'significant under-penetration of branded hotels' in smaller cities. For Accor's chairman and CEO Sébastien Bazin, India is 'one of the world's most exciting travel markets.' India also continues to be a cornerstone of Marriott International's future growth, with the company projecting that the country will become its third-largest market. Inside Radisson's Expansion Plans, Marketing Strategy Radisson Hotel Group's portfolio in India has expanded to 200 operational and developing properties. The chain has been present in the country for 26 years. Indians relate to Radisson as an Indian brand, Nikhil Sharma, managing director and chief operating officer for South Asia at Radisson Hotel Group told Skift. 'As an international brand, we are very local and nationalistic in our approach. We continue to grow because more than 50% of our portfolio is in smaller cities.' He said that over the next 5-7 years, India could go from 185,000 branded hotel rooms to 1 million operating rooms. The company is working on a program that aims to prepare its properties across the world for Indian travelers. The program, called Welcome India, is currently in the works, he said. Competition is intensifying in India as the brands present in India are increasing their inventory and more brands are entering. He said Radisson is counting on word of mouth and loyalty to help distinguish itself among an increasingly discerning customer base. Radisson is also upping its experiential offerings for sports enthusiasts, readers, and couples looking to get married soon. Indian Railways Unveils its SuperApp The Indian Railway Catering and Tourism Corporation (IRCTC) has unveiled its new mobile application SwaRail. The app is meant to be a unified platform for all railway-related services. SwaRail allows users to check their booking status, book meals, explore facilities on stations, and access tourist services. It also provides real-time train tracking service and eliminates the need for frequent logins. Last November, a report by Accenture revealed that Indians are dissatisfied with the existing travel planning options and are seeking a travel superapp. It added that travelers feel the booking process is the most complicated stage of a journey. Indian online travel agency MakeMyTrip is eventually planning to launch a travel superapp, while Skyscanner is also preparing to launch a new marketplace within its app offering a range of additional services. U.S. Imposes Restrictions on Indian Travel Agents The U.S. on Monday said it was imposing restrictions on the owners, executives, and senior officials of India-based travel agencies for knowingly facilitating illegal immigrants to the North American nation. It added that its India Mission was working 'actively' to identify and target individuals and agencies involved in facilitating illegal immigration and human smuggling operations. 'Our immigration policy aims not only to inform foreign nationals about the dangers of illegal immigration to the United States but also to hold accountable individuals who violate our laws, including facilitators of illegal immigration,' the U.S. Mission in India said in a statement. This comes just days after the U.S. warned Indian citizens against overstaying in the country. 'If you remain in the United States beyond your authorized period of stay, you could be deported and could face a permanent ban on traveling to the United States in the future,' the India mission of the U.S. said on Saturday. Delhi Airport Operator Divests in Aviation Services Company for $1.5 Million Delhi Airport operator DIAL has sold its entire 50% stake in Delhi Aviation Services (DASPL) for INR 130 million ($1.5 million). The stake has been sold to Bird Flight Services, which already held a 25% share in the company. Delhi Aviation Services was given the concession to run the operations of bridge-mounted equipment, including ground power units, pre-conditioned air units and supply of potable water to aircraft at Terminal 3 of the Delhi Airport. However, according to a regulatory filing, the company is currently not carrying any business operations. Evoke Experiences Announces New Experiential Hotels Experiential hotels company Evoke Experiences is undertaking a strategic expansion to grow its presence in the hospitality landscape. The company said Monday that the expansion would mark a shift in its operating model, which currently focused on immersive glamping retreats and cultural tent cities. Now, the company will widen its experiential properties portfolio and will look for asset leasing and management collaborations. Currently, it operates 750 keys and plans to expand this figure to 1,000 by the end of the year. It also said that while it has a property coming up in Ayodhya, the company is preparing to launch a new site in Gujarat's Gir.
Times
13-05-2025
- Business
- Times
Foreign tourists scared away as US ‘puts up closed sign'
The United States is expected to lose $12.5 billion in international travel spending by the end of the year, according to a report. Analysts said foreign holidaymakers felt discouraged from visiting America, the most powerful travel economy in the world, because of the heated political climate. Reports of tourists being stopped at the border, visa detentions, a tariff war waged by the Trump administration and a higher exchange rate were factors in a decline in spending by international travellers, said the World Travel and Tourism Council (WTTC). It estimated that foreign tourists would spend $169 billion on holidays to the US this year, down 7 per cent from $181 billion last year and 22 per cent from the peak before the pandemic. 'While other
