Tourism and Hospitality Industry in India: Growth & Outlook

Investments/Developments

• Based on the India Tourism Data Compendium 2025 by the Ministry of Tourism, the sector contributes 5.22% to India’s GDP (total impact), with a direct share of 2.72%. It also supports 13.34% of total employment, with a direct employment share of 5.82%, reflecting its strong role in livelihood generation and inclusive development.
• As per provisional National Accounts Statistics 2025 estimates, the tourism sector contributed Rs. 1,19,747 crore (US$ 18.76 billion) to India's GDP. This reflects the sector's strong economic role in India.
• India's tourism and hospitality sector is poised to reach nearly US$ 60 billion by 2028, driven by domestic and international traveler spending expected to triple by 2034. Domestic air travel is projected to more than double by 2030, increasing demand for quality accommodations.
• Goa’s tourism sector witnessed strong momentum in 2025, driven by domestic tourist arrivals crossing 1 crore and pushing total visitor numbers close to 1.1 crore. The steady inflow of Indian travellers continues to strengthen the state’s tourism economy while supporting overall recovery and growth across key destinations.
• India recorded 5.34 lakh foreign tourist arrivals in April 2026. Domestic tourism is also strong, with over 303 crore domestic tourist visits. Various thematic circuits developed under government schemes like 'Swadesh Darshan' are enhancing leisure tourism options such as cultural, coastal, and tribal circuits.
• Indian overseas travel data shows a sharp uptick in leisure travel by Indians abroad, with leisure travel making up 42.52% of foreign departures by Indians in 2024. This underscores leisure travel as a growing segment both inbound and outbound for India.
• Domestic tourism has become the cornerstone of India's hospitality growth, contributing nearly 88% of total tourism spending. Urban Indians increasingly prefer shorter, experience-led breaks like wellness and adventure tourism. This regional travel focus is expanding new markets in Tier-II and Tier-III cities and driving infrastructure development.
• A joint report by the Ministry of Tourism and NITI Aayog estimates wellness tourism alone could contribute US$ 18 billion to India's GDP by 2030, highlighting growth in specialized tourism segments.
• As per JLL’s Hotel Investment Trends in India 2025 report, hotel investment activity in India increased by 67% year-on-year to Rs. 4,933 crore (US$ 567 million) across 28 transactions in CY2025, reflecting strong investor confidence in the hospitality sector. Institutional investors and private equity firms accounted for 35% of hotel transaction volume in CY2025, driving investment activity worth approximately Rs. 1,727 crore (US$ 198.5 million).
• As per redBus India BusTrack Report 2026, India’s intercity bus industry recorded 147.19 million passenger journeys and a gross ticketing value of Rs. 142.16 billion (US$ 1.63 billion) during October 2025–March 2026, reflecting strong travel demand across the country. The intercity bus market grew by 24% year-on-year in terms of passengers travelled during October 2025–March 2026, highlighting the continued expansion of road-based travel in India.
• As per JLL’s Hotel Investment Trends in India 2025 report, India recorded branded hotel openings of approximately 8,990 keys across 103 hotels in CY2025, with 64% of the new inventory added in tier-II and tier-III cities.
• India's hotel market is shifting to rate-led growth supported by infrastructure expansion and growing domestic tourism. The sector attracted US$ 340 million in hotel transactions in 2024, making India the second-largest hotel investment market in Asia Pacific, with over 690 new hotel projects underway.
• India’s medical tourism market, valued at US$ 7.7 billion in 2024, is projected to reach US$ 16 billion by 2030. The sector has seen significant private investment inflows and plans to add 34,000 new hospital beds by 2029, enhancing capacity for international patients.
• OYO announced in January 2025 plans to add 500 new hotels in India's religious tourism hubs by the end of the year, including destinations like Ayodhya, Varanasi, and Haridwar, to meet the rising demand from pilgrims.
• Sarovar Hotels is set to launch Nepal's largest hotel, featuring 304 rooms under the Royal Tulip brand, in the first half of CY25.
• India’s Union Budget FY27 has allocated Rs. 2,335 crore (US$ 253.8 million) to boost its tourism sector, focusing on improving infrastructure, skill development, and travel facilitation through measures like developing 50 top tourist destinations, offering MUDRA loans for homestays, enhancing connectivity, and introducing e-visa facilities.
• In May 2026, Radisson Hotel Group announced plans to expand its portfolio in India to 157-160 hotels with up to 19,500 keys by the end of 2026. The expansion reflects the group’s continued focus on India’s growing hospitality market, supported by strong development activity across metro as well as tier-II and tier-III cities.
• In May 2026, Hotel Palacio launched its second property in Guwahati and announced an expansion roadmap of Rs. 800 crore (US$ 87.0 million) to develop 10 new properties over the next decade. The investment is aimed at strengthening hospitality infrastructure in Northeast India and supporting the region’s growing tourism and business travel demand.
• In May 2026, IHG Hotels & Resorts signed a strategic agreement with Adani Airport Holdings to develop five hotels with nearly 1,500 keys across key airport-led destinations in India.
• In April 2026, Nomura stated that India’s hospitality sector has entered a “golden cycle”, supported by sustained growth in average room rates, strong investment returns and attractive valuations.
• In March 2026, MakeMyTrip announced the acquisition of a majority stake in regional tour operator Flamingo Transworld to strengthen its holiday packages business and expand its presence across key regional markets in India.
• In February 2026, MakeMyTrip announced a collaboration with OpenAI to enhance AI-led travel discovery through new features integrated into its Myra interface. The initiative enables travelers to move seamlessly from conversational planning to booking, strengthening AI-driven travel planning and personalized user experiences.
• In February 2026, Chalet Hotels approved an investment of Rs. 632.8 crore (US$ 69.7 million) to develop a new ~330-room luxury hotel along with commercial and retail space in Hyderabad. The project is expected to be operational by FY29. The development aims to strengthen premium hospitality capacity in the city while creating diversified revenue opportunities through integrated commercial infrastructure.
• In February 3, 2026, Indian Hotels Company Ltd. (IHCL) signed a framework agreement with Rajdarbar Group to develop seven new Ginger hotels across North India. The expansion targets key Tier-2 and pilgrimage destinations, including Jaipur, Agra, and Mathura, adding over 1,000 keys. The move strengthens IHCL’s presence in the growing midscale hospitality segment, driven by rising aspirational travel demand.
• In January 2026, EaseMyTrip partnered with ProXpense to launch an AI-driven corporate travel and expense management ecosystem. The collaboration integrates automated expense workflows with travel booking services, enabling enterprises to streamline planning, compliance and real-time travel spend management.
• Radisson Hotel Group and MBD Group signed a long-term Master Franchise Agreement to expand luxury and lifestyle brands Radisson Collection and Radisson RED across India. The partnership aims to strengthen premium hospitality offerings, including the upgrade of Radisson Blu MBD Hotel Noida into Radisson Collection MBD.
• India has emerged as Marriott International’s hotspot in the Asia Pacific region excluding China (APEC), as it celebrated a milestone year in 2025 with 99 hotel signings and over 12,000 rooms added.
• OYO invests Rs. 86.69 crore (US$ 10 million) to enhance G6 Hospitality’s digital assets, aiming to boost direct bookings and expand its US footprint with 150+ new hotels by 2025.
• The Maha Kumbh 2025 has become one of the largest religious gatherings in history, with over 450 million (45 crore) devotees participating in the bathing rituals as of February 11, 2025.
• In April 2024, EaseMyTrip.com launches its first franchise store in Karnal, Haryana, as part of its expansion via the franchise model, reinforcing its dedication to offering superior experiences across offline and online channels.
• As of February 2024, Ayodhya is anticipated to host between 50 to 100 hotels over the next 3 to 4 years. The city, acclaimed as a global religious destination, is primed for substantial development, with Taj Hotels poised to establish its fourth property in the area.
• In March 2024, MakeMyTrip revealed a partnership with the Department of Tourism, Madhya Pradesh, and redBus to boost tourism in the region, aiming for sustainable development and positioning Madhya Pradesh as a premier destination.
• In March 2024, Indian Hotels Corporation Ltd (IHCL) has announced plans to recruit 2,000-2,500 employees in the fiscal year 2025. This expansion of the workforce aligns with IHCL's ambitious plans, which include a pipeline of 85 hotels.