Skip to content

Search

Latest Stories

Icra: India’s hospitality sector to grow 6–8 percent

It revised the hospitality sector outlook from "positive" to "stable”

India Economy: ICRA Projects Hospitality Sector to Grow 6–8%

India's hospitality sector is expected to grow 6 to 8 percent in the current financial year, according to rating agency Icra.

What is the growth forecast for India’s hospitality sector in 2026?

INDIA’S HOSPITALITY SECTOR is expected to grow at 6 to 8 percent in the current financial year, according to rating agency Icra, which revised the sector outlook to "stable" from "positive”. Foreign tourist arrivals to India are likely to remain low in the coming months following the terror attack in Pahalgam, Jammu and Kashmir, with a gradual recovery expected later.

Domestic tourism has been the main demand driver so far and is expected to remain so in the near term, Icra said in a statement.


"After three years of strong demand—driven by domestic leisure travel, meetings, incentives, conferences and exhibitions, including weddings, and business travel—the growth in the Indian hospitality sector is forecast to normalize at 6 to 8 percent year-on-year in financial year 2026," said Jitin Makkar, Icra's senior vice president and group head for corporate ratings.

Factors such as improved infrastructure, increased air connectivity, demographics and growth in large-scale MICE events with the opening of new convention centers in recent years will support growth over the medium term, the report said.

The domestic hospitality sector's earnings and credit metrics are expected to remain stable in financial year 2026, supported by cost rationalization measures and operating leverage, the rating agency said. A "stable" outlook indicates low likelihood of change in the near to medium term, while a "positive" outlook suggests higher probability of an upgrade over the same period.

The rating agency estimates pan-India premium hotel occupancy to remain at 72 to 74 per cent in financial year 2026, slightly above the 70 to 72 per cent levels recorded in financial years 2024 and 2025.

Average room rates for premium hotels are projected to rise to Rs 8,200 to 8,500 ($95.7 to $99.2) in financial year 2026, up from Rs 8,000 to 8,200 ($93.3 to $95.8) in financial year 2025, amid limited supply additions and ongoing renovation, refurbishment and upgrading at several properties, the agency said.

"While the terror attacks in April and the resulting uncertainties in North and West India in May led to a surge in travel and MICE cancellations, the impact has been largely temporary and localized," Makkar said. "In recent weeks, there has been a recovery in sentiment following the easing of the conflict."

Icra's sample set, comprising 13 large hotel companies, is expected to report operating margins of 34 to 36 per cent for financial year 2026, despite lower revenue growth. The margins will be supported by factors such as cost rationalization measures and asset-light expansions in recent periods.

However, within the sample, outcomes are expected to vary based on renovations and higher employee expenses due to rising demand.

"Land availability issues currently constrain supply additions in premium micro-markets of metros and larger cities," Makkar said. "Most additions to premium hotel supply in these areas are due to rebranding or property upgradation, while greenfield projects are primarily being initiated in the suburbs."

The World Travel and Tourism Council recently reported that international visitors spent $36.09 billion in India in 2024, a 9 percent increase from 2019.


More for you

Skill Council and Lalit Suri Hospitality School starts hospitality training in India

Skill council, school take on hospitality training in India

Summary:

  • The Tourism and Hospitality Skill Council and The Lalit Suri Hospitality School signed an MoU to improve hospitality education.
  • The collaboration reflects a broader push to invest in youth training and workforce readiness in India’s hospitality sector.
  • It aims to provide domain knowledge, hands-on training and certifications for domestic and international careers.

THE TOURISM AND Hospitality Skill Council and The Lalit Suri Hospitality School recently signed a memorandum of understanding to improve the quality and reach of hospitality training in India. The collaboration reflects a broader push to invest in youth training and workforce readiness in the sector.

Keep ReadingShow less
Baruasagar Fort and Raja Rani Mahal restored as luxury heritage stays by Neemrana Hotels in India
Photo credit: ANI

Neemrana to restore heritage sites in UP, MP

Summary:

  • Neemrana Hotels is working with Uttar Pradesh and Madhya Pradesh to restore heritage sites.
  • The two sites are Baruasagar Fort in Jhansi, Uttar Pradesh, and Raja Rani Mahal in Chanderi, Madhya Pradesh.
  • Neemrana aims to convert them into “revenue-generating non-hotels.”

INDIA’S NEEMRANA HOTELS recently signed agreements with the governments of Uttar Pradesh and Madhya Pradesh states to restore and adapt heritage structures under a public-private partnership. The two sites are Baruasagar Fort in Jhansi, Uttar Pradesh, and Raja Rani Mahal in Chanderi, Madhya Pradesh.

Keep ReadingShow less
Tata Launches Asset-Light Platform for IHCL via Tata Sons
Ginger Hotels

Report: Tata launches asset-light platform for IHCL

SUMMARY:

  • Tata Sons launched a hospitality platform for Indian Hotels Co. Ltd., enabling revenue-share operations on group-owned assets.
  • The first asset on the platform is a Ginger hotel near Kolkata airport.
  • IHCL is set to reach 400 hotels by the end of July and targets 700 by 2030.

TATA SONS LAUNCHED a new hospitality platform to support Indian Hotels Co. Ltd., enabling it to operate group-owned hotels on a revenue-share model while staying asset-light. The first project under this initiative is a 195-room Ginger hotel under construction near Kolkata airport.

Keep ReadingShow less
Welcomhotel Prayagraj exterior view with heritage-inspired architecture
Photo credit: ITC Hotels

India's ITC Hotels profit jumps 53 percent in Q1

Summary:

  • ITC Hotels posted record quarterly profit and revenue in the first quarter of fiscal 2026, with revenue up 20 percent to $103.2 million and profit up 53 percent to $16.08 million.
  • The portfolio has grown to more than 200 hotels, with 143 operational and 58 in the pipeline.
  • Welcomhotel Prayagraj, ITC’s seventh property in Uttar Pradesh, includes 60 rooms and banqueting space.

INDIA’S ITC HOTELS posted its highest-ever quarterly profit and revenue in the first quarter of fiscal year 2026, with consolidated revenue up 20 percent to $103.2 million and profit rising 53 percent to $16.08 million, according to a Times of India report. Meanwhile, ITC launched Welcomhotel Prayagraj in Uttar Pradesh, bringing its total to seven properties in the state, with six more in the pipeline.

Keep ReadingShow less
Tata Sons announces $58M memorial trust to support victims of June 12 Air India crash and aid reconstruction efforts
Photo credit: Vishma Ahanthem/AFP

Tata sets up $58M trust for Air India crash victims

Summary:

  • Tata Sons and Tata Trusts formed a $58 million welfare trust for victims of the June 12 Air India crash, contributing $29 million each.
  • Tata Sons, established in 1917 and registered in Mumbai, is the Tata Group’s holding company; Tata Trusts collectively own 66 percent of it.
  • Tata Sons reacquired 100 percent of Air India in January 2022 through its subsidiary Talace Pvt Ltd.

TATA SONS ESTABLISHED a $58 million, or Rs 500 crore, welfare trust for victims of the June 12 Air India crash. The AI-171 Memorial and Welfare Trust is registered in Mumbai.

Keep ReadingShow less