Listed hotel operators in India may add 70,000 keys by 2030: CBRE

India’s listed hotel operators are expected to add over 70,000 keys by 2030 to capitalise on strong underlying growth potential, according to the India Alternate Sectors Outlook 2026 released by CBRE today.

The report highlights that the sector is transitioning from a post-pandemic recovery phase to one of structural maturity, marked by disciplined expansion and pricing stability.

As per the report, the industry’s market size is projected to grow from approximately $24.6 billion in 2024 to around $31 billion by 2029. Domestic tourism is likely to drive this expansion, having recorded a 40% year-on-year rise in visits to 4.1 billion in 2025.

“The hospitality sector’s trajectory reflects India’s economic resilience, supported by rising disposable incomes and improving accessibility through large-scale infrastructure development,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa at CBRE.

“As the industry shifts towards experience-driven travel and captures institutional demand across spiritual and cultural centres, we expect robust, long-term growth for India’s hospitality ecosystem,” he added.

Momentum sustained despite year-end headwinds

The sector sustained strong momentum through 2025 despite year-end headwinds, including geopolitical tensions and disruptions in the aviation sector.

The report highlighted that occupancy levels averaged around 64% during the year, supporting improved financial performance. Revenue per available room (RevPAR) rose 11% year-on-year, outpacing the 9% growth seen in 2024, while average daily rates (ADR) increased by 8.7%.

The supply pipeline in 2025 showed a clear tilt towards premiumisation, reflecting rising consumer demand for luxury experiences. The upper midscale, upper upscale and upscale segments together accounted for nearly 60% of new hotel openings, it added.

Hotel deal value grows 2.5X YoY in 2025

On the investment front, activity has also accelerated significantly since 2024, with institutional players actively acquiring large stakes. In 2025, total hotel deal value reached approximately $456 million, marking a 2.5x increase from $184 million in 2024.

Going forward, this momentum is expected to continue over the next two years, as investors explore portfolio-led investments and targeted asset acquisitions. Several major players have also tapped public markets through IPOs to raise capital, deleverage balance sheets, and expand regionally.

“Institutional players are increasingly acquiring large stakes in the hospitality sector,” said Rami Kaushal, Managing Director, Consulting & Valuations, India, Middle East & Africa at CBRE.

“Investor interest is shifting towards leisure destinations, pilgrimage centres, and emerging commercial cities with limited branded inventory. The move towards asset-light expansion models is enhancing the sector’s institutional appeal and is likely to drive consolidation and M&A activity,” Kaushal added.

Adoption of asset light models

The industry is undergoing a strategic realignment, with operators increasingly adopting asset light models such as management contracts and franchise partnerships to strengthen balance sheets and ensure disciplined growth. This shift is expected to further enhance institutional interest and accelerate consolidation trends in 2026.

Operators are also exploring acquisition-led growth strategies to scale their portfolios and expand market presence, particularly across tier-II and tier-III cities. Improving connectivity and expanding tourism infrastructure are supporting this trend, while the large base of independent and unbranded hotels offers significant opportunities for aggregation and brand conversion.

Against this backdrop, investment activity in the sector is expected to remain robust through 2026, supported by sustained travel demand and continued investor interest in scalable hospitality platforms.

The report also noted that policy support has also strengthened sector fundamentals. GST rationalisation in September 2025 streamlined taxation, improving affordability in the Midscale and Budget segments while supporting occupancy levels. Meanwhile, the Union Budget FY2026-27 proposed upgrading the National Council for Hotel Management and Catering Technology into a National Institute of Hospitality, aimed at enhancing professional training and building a stronger talent pipeline.