Indian Hospitality Industry’s RevPAR Set to Hit Decadal Highs by FY2025

Indian Hospitality Industry’s RevPAR Set to Hit Decadal Highs by FY2025

By Manu Vardhan Kannan

Published on January 8, 2025

The Indian hospitality industry is poised for robust growth, with Revenue Per Available Room (RevPAR) expected to hit decadal highs by FY2025, according to the latest ICRA report. The sector is projected to see a 7-9% YoY revenue growth in FY2025, followed by 6-8% YoY growth in FY2026, building on the strong base of FY2024.

ICRA forecasts that pan-India premium hotel occupancy will improve from 70-72% in FY2025 to 72-74% in FY2026. Meanwhile, the Average Room Rates (ARRs) for premium hotels are estimated to rise to ₹7,800-8,000 in FY2025 (an 8% YoY increase) and further to ₹8,000-8,400 in FY2026. Operating margins for leading hotel chains, sampled by ICRA, are expected to stay strong at 31-33% in FY2025 and FY2026.

Demand is being driven by sustained domestic leisure travel, MICE events, business travel, and weddings. Tier-II cities and spiritual tourism are also contributing to growth. However, foreign tourist arrivals (FTA) remain below pre-Covid levels, with recovery hinging on global macroeconomic conditions.

Market Dynamics and Drivers
Vinutaa S, Vice President and Sector Head – Corporate Ratings at ICRA, stated, “Domestic tourism will remain the prime driver, while gateway cities like Mumbai and NCR are likely to exceed 75% occupancy in FY2025 and FY2026. This surge in premium hotel ARRs will lead to a spillover of demand to mid-scale hotels.”

Healthy demand is supported by improved infrastructure, air connectivity, and a rise in large-scale MICE events, bolstered by new convention centers. Renovations and upgrades at several properties are expected to support ARRs further, while larger players benefit from asset-light expansions, management contracts, and operating leases.

Supply and Cost Trends
Supply growth is anticipated at a CAGR of 4.5-5% until FY2026, lagging behind demand, ensuring a revenue upcycle. Unlike the FY2009 downturn, which saw oversupply, the current scenario reflects cautious expansion. Land constraints in premium micro-markets have led to supply additions primarily through rebranding or upgradation, with greenfield projects concentrated in suburban areas.

On the cost side, the industry has maintained several cost-rationalization measures introduced during Covid, including a 15-20% reduction in staff-to-room ratios. Increased use of renewable power, stringent cost controls, and asset-light expansions have supported margins. However, rising employee costs and renovations could lead to variations in performance among companies.

Outlook
 The Indian hospitality industry's medium-term prospects remain optimistic, with sustained domestic demand, improving ARRs, and healthy operating margins. The sector's revival is underpinned by strategic supply management, infrastructure advancements, and evolving consumer preferences.


Taj Mussoorie Foothills Debuts in Dehradun

Taj Mussoorie Foothills Debuts in Dehradun

By Nishang Narayan

Published on February 22, 2025

Indian Hotels Company (IHCL), India’s largest hospitality company, has announced the opening of Taj Mussoorie Foothills, Dehradun. Speaking about the launch, Puneet Chhatwal, Managing Director & CEO, IHCL, said, "We are delighted to expand Taj’s presence in Uttarakhand with the opening of Taj Mussoorie Foothills in the capital city of Dehradun. IHCL will have a multi-brand presence in the city, and with the recently opened Delhi-Dehradun Expressway enhancing connectivity, Dehradun has evolved into a commercially significant hub. Its proximity to Mussoorie, Rishikesh, and Haridwar makes it an attractive destination for leisure, adventure, and spiritual tourism."

Located in the tranquil foothills of the Himalayas, Taj Mussoorie Foothills is a luxurious retreat that blends contemporary elegance with nature’s beauty. The 115-key hotel, including 16 exquisitely designed suites, provides a serene escape with breathtaking views.

image

The hotel features an array of dining options, including Vista, an all-day dining restaurant offering global and Indian flavors, House of Nomad, a sophisticated gastro pub, Tropics, a poolside dining venue, and Emperor Lounge, a space for high tea and handcrafted beverages.

With four versatile banqueting spaces ranging from 1,200 sq. ft. to 8,000 sq. ft., along with well-equipped meeting rooms, the property is an ideal venue for weddings, conferences, and social gatherings.

Guests can rejuvenate at the J Wellness Spa, which offers signature therapies. Additional facilities include dedicated pet-friendly amenities, a kids’ activity zone, a walking track with accessibility features, and EV charging stations. The hotel also offers exclusive curated experiences, such as the Malsi Nature Forest Walk, a trek to Shikhar Falls, and a wildlife safari at Rajaji National Park.

image

Naveen Tomar, General Manager, Taj Mussoorie Foothills, Dehradun, shared his excitement about the launch, stating, "Taj Mussoorie Foothills is designed to offer guests an immersive experience in the lap of nature. From curated experiences to bespoke services, we look forward to creating unforgettable stays for our guests."

Often called the ‘Doon Valley’, Dehradun is known for its scenic beauty and pleasant climate. While it serves as a gateway to Mussoorie, the city itself boasts attractions such as Robber’s Cave and Sahastradhara.

With this latest addition, IHCL now has 17 hotels in Uttarakhand, including 7 under development.

The Indian Hotels Company Limited (IHCL) brings together a portfolio of world-class brands, including Taj, SeleQtions, Vivanta, Ginger, and Tree of Life. The company, founded by Jamsetji Tata, opened its first hotel, The Taj Mahal Palace, Bombay, in 1903. Today, IHCL operates 362 hotels, with 125 under development, spanning 14 countries and over 150 locations worldwide.


Suba Group Expands with Click Hotel MIDC in Andheri, Mumbai

Suba Group Expands with Click Hotel MIDC in Andheri, Mumbai

By Manu Vardhan Kannan

Published on February 22, 2025

Suba Group of Hotels has expanded its presence in Mumbai with the launch of Click Hotel MIDC, a modern 3-star property located in Andheri’s thriving business district. This marks Click Hotels’ fourth property in Mumbai and its 29th across India. Situated in the heart of Andheri MIDC, the hotel is strategically positioned near over 1,000 Micro, Small, and Medium Enterprises (MSMEs) and Small and Medium Enterprises (SMEs), making it an ideal choice for corporate and leisure travelers. It also enjoys proximity to key attractions like Mahakali Caves, Bombay Exhibition Centre, Juhu Joggers Park, ISKCON Temple, Powai Lake, and BKC, with Mumbai’s domestic and international airports just 10 minutes away.

“We are excited to introduce Click Hotel MIDC in Mumbai, catering to the growing demand for smart, efficient, and budget-friendly accommodations,” said Mansur Mehta, Chairman and Managing Director, Suba Group of Hotels. “Our focus remains on delivering comfortable and affordable stays without compromising quality, and we look forward to expanding further across India.”

image

image

The hotel features 45 well-designed rooms, including 36 fully furnished standard rooms and 9 innovative pod rooms, ensuring a comfortable stay with modern amenities. Guests can enjoy dining at Cinnamon, the in-house multi-cuisine restaurant known for its inviting ambiance and diverse menu. For corporate events and social gatherings, the hotel offers versatile event spaces, including the Senate Banquet and conference facilities designed for meetings, seminars, and celebrations.

“Mumbai continues to be a crucial market for us, and Click Hotel MIDC is a significant addition to our expanding portfolio,” said Mubeen Mehta, CEO, Suba Group of Hotels. “With this launch, we reinforce our commitment to offering smart and affordable hospitality solutions.”

Guests at Click Hotel MIDC can avail themselves of key amenities such as Wi-Fi, laundry services, car parking, and 24/7 guest assistance, ensuring a seamless stay experience. The property’s strategic location, contemporary design, and well-equipped event spaces make it an excellent choice for both business and leisure travelers.

image

“Click Hotel MIDC is thoughtfully designed to provide a high-quality stay at an affordable price. Our prime location near the airport and major business hubs makes it a convenient option for travelers,” said Chandrakant Shetty, Chief Operating Officer, Suba Group of Hotels.

With this new addition, Suba Group strengthens its presence in India’s hospitality landscape. The group currently operates 125+ hotels across 70 destinations, spanning upscale, midscale, and economy segments. Committed to providing exceptional guest experiences, Suba Group continues its expansion, redefining budget-friendly hospitality.


Pullman Hotels & Resorts Expands in South India with Chennai Launch

Pullman Hotels & Resorts Expands in South India with Chennai Launch

By Manu Vardhan Kannan

Published on February 21, 2025

Pullman Hotels & Resorts has officially launched Pullman Chennai Anna Salai, marking its debut in South India. This new addition to the global hospitality brand offers a seamless blend of business, leisure, and cultural experiences in Chennai’s prime business district, Anna Salai.

A Landmark in Premium Hospitality   

Strategically located in the heart of the city, the 232-room Pullman Chennai Anna Salai provides easy access to corporate hubs, government offices, and major consulates. With state-of-the-art amenities, the hotel aims to redefine hospitality for modern business and leisure travelers.

image

image

"India remains a key market for Accor, and the launch of Pullman Chennai Anna Salai underscores our commitment to pioneering premium hospitality experiences," said Garth Simmons, Chief Operating Officer, Premium, Midscale & Economy Division, Accor Asia. "Pullman’s dynamic design, immersive social spaces, and forward-thinking approach make it an ideal destination for contemporary travelers seeking both purpose and connection."

Event Spaces & Modern Amenities 

The hotel spans 5,000 square metres and features 1,700 square metres of versatile event and banquet spaces, equipped with cutting-edge technology. Designed for conferences, corporate events, and grand social gatherings, Pullman Chennai Anna Salai ensures an unmatched experience with seamless connectivity and a premium service ethos.

Sustainability & Innovation   

Pullman Chennai Anna Salai has earned the prestigious Gold-level sustainability certification under the Leadership in Energy and Environmental Design (LEED) program. The hotel’s eco-conscious design and energy-efficient operations align with Accor’s vision for sustainable hospitality.

"We are proud to launch the first Pullman in South India, a landmark for the Ceebros Group," said C Subba Reddy, Managing Director of Ceebros Group. "Our vision was to craft a space where modern sophistication meets the vibrant spirit of Chennai, seamlessly blending business, leisure, and culture."

A New Era for Chennai’s Luxury Hospitality   

 As Pullman Chennai Anna Salai opens its doors, it establishes itself as a premier destination for global professionals and local residents. With its commitment to luxury, innovation, and sustainability, the hotel is poised to set new benchmarks in the region’s hospitality landscape.

Stay up-to-date with the latest Hospitality news and trends in the Hospitality industry!

Subscribe to Hospitality news e-magazine for free and never miss an issue.

By clicking subscribe for free you agree to the Terms & Conditions and acknowledge our Privacy Policy.

Advertise With Us

We have various options to advertise with us including Events, Advertorials, Banners, Mailers, etc.