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.


WGH Hotels & Resorts Unveils Kochi Flagship to Kerala Industries Minister

WGH Hotels & Resorts Unveils Kochi Flagship to Kerala Industries Minister

By Nishang Narayan

Published on May 31, 2025

WGH Hotels & Resorts Pvt. Ltd., the hospitality wing of the diversified World Group, recently hosted Hon. Minister for Industries, Government of Kerala, P. Rajeev at the site of its upcoming flagship project in Kochi. The high-profile visit underlines the significance of this luxury development, which was also featured at the Kerala Global Investment Meet, reinforcing the state's push for sustainable and experiential tourism.

With a legacy that began in 2012 through the acquisition of World Backwaters Alleppey, WGH now boasts a strong presence in Kerala with operating properties in Alleppey, Munnar, and Thekkady. The group is now expanding ambitiously with new developments in Kochi, Varkala, Trivandrum, and Ashtamudi, including a signature wellness resort—all designed to meet international standards while staying true to Kerala’s heritage.

During the ministerial visit, WGH presented the master plan and design vision for its Kochi project, set for launch on January 1, 2028. The development aims to redefine luxury tourism in Kerala by fusing modern architecture with authentic, culturally immersive experiences.

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Mr. J. Jayakrishnan, Director of World Group and WGH Hotels & Resorts, thanked the government for its proactive support, stating:

“Kerala’s infrastructure development and progressive tourism policies are perfectly aligned with our vision. Our projects aim to promote responsible and sustainable tourism while gifting guests an immersive experience of Kerala’s unique lifestyle and traditions.”

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The World Group, with nearly four decades of business leadership across mining, logistics, agriculture, DRI, and consulting, has already invested INR 250 crores in Kerala's hospitality sector over the past two years. An additional INR 500 crores has been earmarked for future ventures—including the flagship resorts, a hospitality college in Kochi, and a chain of vegetarian restaurants throughout the state.

The proposed hospitality college is envisioned to train 200 professionals annually, building a strong local talent pool to meet global industry standards. Meanwhile, the Varkala and Ashtamudi resorts are scheduled to open by 2027, further anchoring WGH’s role in shaping Kerala’s tourism future.

WGH Hotels & Resorts remains deeply committed to supporting Kerala's growth as a world-class tourism hub, guided by principles of sustainability, cultural authenticity, and community development.


Clarks Exotica Champions Purpose-Driven Culture at Work

Clarks Exotica Champions Purpose-Driven Culture at Work

By Nishang Narayan

Published on May 30, 2025

In the world of luxury hospitality, where lavish experiences often steal the spotlight, Clarks Exotica Convention Resort & Spa stands out by leading with a deeper mission — purpose. For Clarks, hospitality is not just about the scenic views and impeccable service; it’s about building a culture rooted in values, unity, and community responsibility.

At the core of Clarks' success is a people-first philosophy — a belief that genuine service begins with a strong, supported team. Under the leadership of Nilisha Ghuliani, Vice President, the resort has cultivated a workplace that feels less like a job and more like a purpose-driven family.

Honouring National Pride: #OperationSindoor

One of Clarks’ standout initiatives this year was #OperationSindoor, a heartfelt tribute to the Indian Armed Forces. Employees dressed in red and pink — symbols of strength, unity, and gratitude — and came together to honour those who serve the nation.

This was more than just a ceremony. It was a collective expression of patriotism, creating a sense of purpose and solidarity among team members. “At Clarks, patriotism is not a moment — it’s a mindset,” shares Nilisha Ghuliani.

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Nurturing the Earth: Earth Day Tree Planting

Sustainability isn’t just a policy at Clarks — it’s a practice. On Earth Day, employees participated in a tree-planting initiative at the Clubhouse Lawn, reflecting the resort’s long-standing commitment to the environment.

From water conservation to green operations, Clarks has consistently invested in planet-positive action, ensuring that everyday efforts contribute to long-term impact.

Empowering People: Culture of Care

Employee wellbeing and growth are central to the Clarks ethos. Through training programs, internal recognition, and continuous engagement, the resort empowers its team to lead, grow, and evolve. Whether it's supporting career advancement or celebrating small wins, Clarks ensures that its people feel seen, heard, and valued.

"Every initiative — whether for the nation, the environment, or our people — is designed to deepen connection and build meaning," Nilisha explains.

Clarks Exotica is proving that a great workplace isn't just built with policies — it's built with heart. Here, service excellence begins within, and each action is a step toward a more unified, compassionate, and conscious world.


Cocoon at The Machan Lonavala: A Luxurious Monsoon Escape in the Sky

Cocoon at The Machan Lonavala: A Luxurious Monsoon Escape in the Sky

By Nishang Narayan

Published on May 30, 2025

Elevate your monsoon experience at The Machan Lonavala with The Cocoon, a stunning 2,500+ sq. ft. villa nestled high among the treetops. Crafted as a dome-shaped sanctuary, this is the brand's most luxurious and architecturally distinct offering — designed for those who seek the perfect blend of indulgence and nature.

Timed perfectly for the rains, The Cocoon immerses guests in forest serenity with panoramic views from a soaring foot ceiling and a sprawling private deck. Whether you’re enjoying the misty monsoon air or stargazing at night, the elevated setting delivers tranquility at every turn.

The villa offers four unique sleeping zones: a cozy loft, a main-level space, and two suspended bedrooms on the lower floor. From elegant copper bathtubs to an open-to-sky His & Hers shower, and a modern multi-tiered bath, the bathing options alone are an experience in themselves.

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Step onto the private deck to discover a heated plunge pool, sunken seating, and an alfresco dining spot — all overlooking the lush, green canopy of Lonavala.

Sustainability lies at the heart of The Cocoon. Powered entirely by solar energy and constructed using eco-sensitive materials, this retreat reflects The Machan’s commitment to luxurious yet conscious living.

Perfect for romantic getaways, family vacations, or friends' reunions, The Cocoon is more than just a villa — it’s a retreat where skies meet serenity.

Bookings are now open on www.themachan.com.

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