New Delhi: India's hospitality sector sustained its growth momentum in 2025 despite geopolitical challenges such as Operation Sindoor and the West Asia conflict, besides adverse weather conditions and the IndiGo airline crisis.Hotels performed strongly across the key benchmarks of occupancy growth, average daily rates, and revenue per available room growth, showed the India Hotel Market Review 2025 report by industry tracker Horwath HTL.The year saw the largest-ever supply addition, with openings and conversions crossing 19,000 rooms, and net inventory growth of 15,500 rooms. Occupancy rate increased by 1.1 percentage points to 64%, while average daily rate rose 8.6% to ₹8,624, giving revenue per available room growth of ₹5,522, up 10.8%.128127626As per report, 45% of branded room inventory is currently owned or managed by companies listed in India. "2025 was also a qualitatively better year as we had challenges coming up every quarter, but the hospitality industry demonstrated the confidence, strength and resilience to handle them," said Vijay Thacker, MD of Horwath HTL India. Existing announcements by chains peg the supply addition at 25,000-28,000 rooms in 2026, though, Thacker said, realistically, it should be in the range of around 20,000. Average occupancies are expected to remain in the mid-to-high 60s for the coming several years."When you look at the big business cities, occupancies can go up to 80-85%," said Thacker. "But, a lot of new supply is coming into tier-2 and tier-3 markets, and other leisure markets. They are seasonal, and often, weekday dependent business markets."Shwetank Singh, MD at Chalet Hotels, said India's GDP growth, demographic dividend, the demand supply gap, and a mindset shift of travellers that leads them to taking more frequent breaks bodes well for the sector.Greater participation by listed firms is a healthy development as it implies higher governance standards, capital discipline, and transparency, said Ranjit Batra, CEO of Ventive Hospitality. Domestic travel will continue to be the primary demand engine, led by leisure, meetings, incentives, conferences, and exhibitions (MICE), and weddings, while supply is expected to remain below demand levels in key markets, enabling strong pricing power, said Nikhil Sharma, MD and COO (South Asia) at Radisson Hotel Group."With rising household incomes, improved connectivity and corporate decentralisation, emerging cities are also expected to see stronger revenue per available room growth compared to metros," he said. Parveen Chander Kumar, EVP, commercial, at IHCL, said domestic travel sustained the momentum last year and the current quarter has been going well considering high-profile visits, summits and weddings.
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