India's Hotel Industry

How India's hotel industry is structured, from luxury chains to budget and unbranded hotels, and what drives demand from business, leisure and domestic travellers.

India’s hotel industry ranges from five-star palaces to small lodges.

Segments

Luxury and upper upscale: Taj, Oberoi, ITC, Marriott and others.
Midscale: brands like Lemon Tree and Ginger.
Budget and economy.
Unbranded hotels and lodges: the majority of rooms.

Branded vs unbranded

Only a minority of India’s hotel rooms belong to branded chains, much lower than in the US or China. Unbranded hotels dominate small towns.

Demand drivers

Domestic tourism: Indians made billions of domestic trips a year, far outnumbering foreign tourists.
Business travel.
Weddings and events.
Pilgrimages.
Foreign tourists, whose arrivals were around 9 to 10 million a year before and after the pandemic.

Post-pandemic boom

After COVID-19, hotel demand surged. Room rates and occupancy reached record levels in 2023-24, boosted by domestic travel and events like G20 meetings.

Economic role

Hotels create jobs, support local suppliers and earn foreign exchange.

The pilgrimage town hotel

In a pilgrimage town, dozens of small unbranded hotels fill up during festivals, while a single branded hotel caters to wealthier visitors.

Thinking foreign tourists drive Indian hotels

Domestic travellers are the main source of demand.

Key takeaways

India's hotels range from luxury to unbranded lodges.
Branded hotels are a minority of rooms.
Domestic travel drives most demand.
Demand hit records after the pandemic.