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.


ITC Hotels Unveils Storii Narindera Orchards, Kufri: A Soulful Mountain Retreat

ITC Hotels Unveils Storii Narindera Orchards, Kufri: A Soulful Mountain Retreat

By Hariharan U

Published on October 22, 2025

ITC Hotels has expanded its premium Storii brand with the launch of Storii Narindera Orchards, Kufri, an experiential mountain retreat set amidst apple orchards with stunning views of the Dhauladhar ranges. The property blends the natural beauty of the Shimla Hills with refined hospitality, offering guests an immersive, soulful escape.

Storii Kufri features elegantly appointed rooms overlooking the valley, a spa with curated wellness experiences, and multiple dining options. Guests can indulge in Himachali delicacies and global cuisine at Daran Valley, enjoy open-air terrace dining with light bites and handcrafted beverages at Café Mehral, relax with teas and desserts at Baag View, or savour premium cocktails at Raspippin Bar. The Baghal Room serves as the signature banquet space, ideal for weddings, corporate retreats, and social gatherings.

“ITC Hotels Limited has a very strong presence in Himachal Pradesh and with the addition of Storii Narindera Orchards, Kufri, we further strengthen our footprint in the state. The property is inspired by the region’s rich heritage and culture, celebrating local artistry thoughtfully blended with contemporary comforts,” said Anil Chadha, Managing Director, ITC Hotels Limited.

“Our dream was to create more than a hotel, we envisaged a destination that reflects the essence of Shimla Hills. We welcome guests to discover not just a stay, but a story that celebrates the region and the spirit of true hospitality,” said Udayvir Singh Punta, Owner of Storii Narindera Orchards, Kufri.

Visitors can enjoy orchard walks, curated treks, bonfire evenings, and wellness treatments at the spa and salon. Located just a short drive from Shimla, the retreat is positioned as a premier choice for leisure getaways, corporate retreats, and destination weddings.

With Storii Narindera Orchards, Kufri, ITC Hotels continues to expand its portfolio of premium experiential destinations, combining regional authenticity with modern luxury.

If you want, I can also draft a shorter social media-friendly version highlighting the scenic location, wellness offerings, and curated dining at Storii Kufri.


Lemon Tree Hotels Expands in Maharashtra with New Resort in Mahabaleshwar

Lemon Tree Hotels Expands in Maharashtra with New Resort in Mahabaleshwar

By Hariharan U

Published on October 22, 2025

Lemon Tree Hotels Limited has announced the signing of its newest property, Lemon Tree Resort, Saj by the Mountain, Mahabaleshwar. The resort will be managed by Carnation Hotels Private Limited, the management arm and a wholly-owned subsidiary of Lemon Tree Hotels Limited.

This signing marks an important milestone in the brand’s expansion across Maharashtra, further strengthening its leisure and resort portfolio. Known for offering vibrant, comfortable, and value-driven stays, Lemon Tree continues to attract both business and leisure travellers across India.

The upcoming Lemon Tree Resort, Saj by the Mountain will feature:

  • 78 well-appointed rooms offering scenic views

  • A restaurant and a bar serving curated local and global cuisines

  • A banquet hall for events and celebrations

  • A swimming pool and spa for recreation and relaxation

Speaking on the signing, Vilas Pawar, CEO – Managed & Franchise Business, Lemon Tree Hotels, said, “With this signing, we will expand our leisure portfolio in Maharashtra, a state where we currently have 15 operational and 11 upcoming properties, in addition to this one. While growing our footprint across cities of all tiers, this partnership aligns perfectly with our vision of offering refreshing and comfortable stays across all destinations.”

The addition of the Mahabaleshwar resort highlights Lemon Tree’s strategic focus on premium leisure destinations, complementing its strong city presence. As the travel and tourism landscape continues to evolve, the brand aims to deliver distinctive experiences rooted in comfort, warmth, and value.


Sheraton Hyderabad Relaunches Jade Ballroom After Extensive Redesign

Sheraton Hyderabad Relaunches Jade Ballroom After Extensive Redesign

By Hariharan U

Published on October 21, 2025

Sheraton Hyderabad Hotel has announced the relaunch of its signature banquet space, the Jade Ballroom following an extensive redesign. The transformed venue combines contemporary elegance with the city’s cultural heritage, setting a new benchmark for events and celebrations in Hyderabad.

Speaking about the relaunch, Subhankar Bose, General Manager, Sheraton Hyderabad Hotel, said, “The relaunch of Jade Ballroom represents our commitment to offering Hyderabad an exceptional venue that honours tradition while embracing innovation. This space is designed to create magical moments for our guests — whether they are celebrating life’s milestones or hosting distinguished business events.”

The reimagined Jade Ballroom now offers 4,500 sq. ft. of flexible, pillarless meeting space, complemented by a 2,500 sq. ft. pre-function area. With a total capacity of up to 600 guests, it ranks among Hyderabad’s largest and most adaptable event venues.

Designed for versatility, the ballroom’s column-free architecture ensures unobstructed sightlines, allowing seamless transitions between intimate gatherings and grand celebrations. The space can also be divided into Jade 1 and Jade 2, offering flexibility for simultaneous events or customized layouts.

The enhanced pre-function area, ideal for cocktail receptions, networking sessions, or registration zones, features independent access for added exclusivity. State-of-the-art audio-visual systems and advanced lighting technology have also been integrated, ensuring every event is executed with sophistication and precision.

With its blend of timeless design, modern technology, and spacious versatility, the new Jade Ballroom reaffirms Sheraton Hyderabad’s position as a premier destination for weddings, social celebrations, and corporate events in the city.

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