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 Chandigarh Secures EarthCheck Platinum for 13 Years

Taj Chandigarh Secures EarthCheck Platinum for 13 Years

By Manu Vardhan Kannan

Published on April 27, 2026

Taj Chandigarh has marked a major milestone by achieving the EarthCheck Platinum Certification for 13 consecutive years. This recognition highlights the hotel’s consistent efforts towards sustainability and responsible operations, setting it apart as a leader in eco-conscious hospitality.

The certification is awarded by EarthCheck, a globally recognised scientific benchmarking and certification body for the travel and tourism sector. Earning Platinum status is a significant achievement, given that it requires at least 10 continuous years of verified performance across key sustainability measures. By maintaining this level for 13 years, Taj Chandigarh has gone beyond the standard and strengthened its position in responsible hospitality.

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This achievement also reflects the larger vision of The Indian Hotels Company Limited (IHCL), under which Taj Chandigarh operates. Across its portfolio, IHCL has focused on reducing energy use, conserving water, and cutting down waste, all while ensuring a high-quality guest experience. The EarthCheck framework also aligns with global sustainability goals, including the United Nations Sustainable Development Goals (SDGs), making these efforts part of a broader purpose.

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Speaking on the milestone, Surinder Singh, Area Director – Operations & General Manager, Taj Chandigarh, said,

“Achieving EarthCheck Platinum Certification for 13 consecutive years is a proud milestone for us. It reflects our deep-rooted commitment to sustainability and responsible hospitality. At Taj Chandigarh, we believe that luxury and environmental responsibility must go hand in hand and this recognition reinforces our continued efforts towards creating a greener future.”

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Ankur Sharma, Chief Engineer, Taj Chandigarh, added, “This achievement is the result of consistent efforts, innovation and a strong focus on resource efficiency. From energy conservation to water management and waste reduction, our teams work tirelessly to ensure that sustainability is embedded in every aspect of our operations. We remain committed to enhancing our practices and setting new benchmarks in environmental performance.”

With travellers increasingly looking for responsible and sustainable choices, recognitions like this build trust and confidence. Taj Chandigarh’s continued success with EarthCheck Platinum not only celebrates a long-standing achievement but also sets a strong example for the hospitality industry, showing that luxury and sustainability can go hand in hand.


The Leela Gandhinagar Introduces E-Cycle Experience to Promote Sustainable Luxury

The Leela Gandhinagar Introduces E-Cycle Experience to Promote Sustainable Luxury

By Hariharan U

Published on April 26, 2026

Marking Earth Day, The Leela Gandhinagar has introduced an immersive e-cycle experience in collaboration with Svitch, reinforcing its focus on sustainability-led luxury.

The initiative is designed to offer guests a low-impact, mindful way to explore Gandhinagar, encouraging slower, more conscious travel while reducing carbon footprint. By integrating eco-friendly mobility into the guest journey, the hotel continues to position sustainability as a core element of its hospitality experience.

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Set against the city’s serene surroundings, the e-cycle experience allows guests to engage more deeply with their environment, blending wellbeing, exploration, and environmental responsibility. The offering reflects a broader shift in luxury travel, where guests are increasingly seeking experiences that are both meaningful and sustainable.

Commenting on the initiative, Vikas Sood, General Manager, highlighted the hotel’s commitment to creating experiences that are enriching while embedding responsible practices into everyday operations.

The launch was complemented by an Earth Day cyclethon, bringing together guests, hotel associates, and members of the local community. The activity aimed to foster a shared sense of responsibility towards sustainable living, while encouraging active participation in eco-conscious initiatives.

Following the ride, guests experienced the hotel’s signature Aujasya breakfast, aligning the sustainability narrative with wellness-focused dining.

Through initiatives like this, The Leela Gandhinagar continues to evolve the concept of responsible luxury, where sustainability is seamlessly integrated into the guest experience, enhancing both comfort and awareness.


WelcomHeritage Parv Vilas Resort & Spa Elevates Luxury Escapes in Kasauli

WelcomHeritage Parv Vilas Resort & Spa Elevates Luxury Escapes in Kasauli

By Hariharan U

Published on April 25, 2026

WelcomHeritage Parv Vilas Resort & Spa is redefining luxury getaways in the hills with its expansive offering set amidst the scenic Kasauli Hills.

Perched in the lush Shivalik range, the resort blends natural beauty with refined hospitality, offering guests a tranquil escape marked by panoramic views, fresh mountain air, and a thoughtfully curated luxury experience. Designed as a sanctuary for relaxation, the property combines modern amenities with a serene setting that encourages guests to unwind at a leisurely pace.

Operated under the WelcomHeritage umbrella since December 2022, the resort has positioned itself as a full-scale five-star destination in Solan. With 93 well-appointed rooms, the property caters to a wide range of travellers, offering accommodation options that include deluxe rooms, suites, family-friendly cottages, and an exclusive four-bedroom luxury villa.

The resort is equipped with a comprehensive range of amenities, including a luxury spa and salon, wellness centre, and an all-weather heated indoor swimming pool, along with a dedicated children’s pool. These features ensure a seamless and comfortable experience for guests across seasons.

Beyond leisure stays, the property has also emerged as a preferred venue for destination weddings, corporate conferences, and large-scale events, supported by its expansive layout and premium infrastructure.

The design philosophy strikes a balance between modern sophistication and timeless charm, creating a space that feels both elegant and inviting. From intimate vacations to grand celebrations, the resort offers an environment that blends comfort with understated luxury.

With its scenic location, comprehensive facilities, and focus on guest experience, WelcomHeritage Parv Vilas Resort & Spa stands out as a premier mountain retreat, offering travellers a refined escape in the hills.

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