New Delhi [India], October 22 (ANI): India will need an estimated 1.9 lakh to 2.1 lakh additional hotel rooms by 2035, translating into 120-125 million square feet of new hospitality real estate, as rising domestic tourism, business travel and demand for premium experiences drive sectoral expansion, according to a report by CBRE.
The report said India's hospitality sector had moved beyond post-pandemic recovery into a more sustained growth phase, supported by rising incomes, infrastructure development and changing travel preferences.
“India’s hospitality sector has transitioned from a period of post -pandemic recovery to a more sustained phase of growth, positioning itself as one of the most resilient alternative real estate sectors,” CBRE said.
The report added that demand was expanding across corporate, leisure, experiential and spiritual tourism, while a preference for premium stays and relatively limited supply additions in upscale and luxury segments had supported hotel room rates and occupancy.
India's organised hospitality sector had around 4.5 lakh rooms, with overall hotel occupancy reaching nearly 64 per cent at the end of 2025, according to the report. Revenue per available room (RevPAR), a measure of hotel performance, grew around 11 per cent in 2025 to approximately Rs 5,500.
CBRE said the additional room requirement would span multiple categories, including economy, midscale, upscale and luxury hotels. The upscale segment is projected to require around 43,000 additional rooms by 2035, while midscale hotels could need another 42,000 rooms. Luxury hotels are expected to require approximately 29,000 additional rooms.
The report also pointed to opportunities beyond established hotel markets, as operators increasingly look at smaller leisure and cultural destinations. Improved connectivity and rising interest in spiritual tourism, wellness retreats and experience-led travel are supporting demand in emerging locations.
"Gateway markets offer pricing-led upside for luxury and upper-upscale additions, backed by strong corporate, MICE, and international demand," the report said, adding that other destinations offered scope for resort-led, experience-driven formats.
Investment activity is also expanding. The hospitality sector attracted around USD 905 million in real estate investments between 2024 and the first half of 2026, according to CBRE.
The report noted that hotel operators were increasingly using management contracts and franchise partnerships to expand with lower capital requirements, while investors were moving towards larger platforms and strategic joint ventures.
CBRE said the sector's growth outlook would depend on demand trends, asset quality, location and operators' ability to deliver experiences suited to changing consumer preferences. (ANI)
India's hotel capacity needs major expansion, up to 2.1 lakh rooms required by 2035: Report
