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A hotel room can mean different things to different people. For a pilgrim in Varanasi, it may be a convenient stop close to a temple. For a business traveller in Gurugram, it is a place to recharge between meetings, while for a couple on a weekend break, it is part of the holiday experience itself. The destination may change, the budgets may differ, but the expectation is clear: a stay that fits the reason for travelling.
This changing relationship between travel and accommodation is reshaping India's hotel industry. The question for hotel companies is no longer just where travellers are going, but what is taking them there. From pilgrimage and business trips to spontaneous holidays and family getaways, the reasons people travel is becoming as important as the destinations themselves. And hotels are beginning to build their growth strategies around this shift.
For the hospitality industry, this shift represents more than an increase in customer numbers. It is changing how businesses design their offerings, select markets, price services and plan expansion. Brands are increasingly required to cater to travellers and consumers with different budgets, expectations and reasons for spending.
Decoding the Figures
- India's hotels recorded an average room rate of ₹10,000–10,200 in Q1 2026, up 6–8% year-on-year, with occupancy at 67–69% (HVS ANAROCK).
- India's travel market is forecast to grow 13% to $47.2 billion with domestic travellers accounting for about 86% of all tourism spending (Phocuswright).
- India's listed hotel operators plan to add more than 70,000 rooms by 2030 (CBRE India Alternate Sectors Outlook 2026).
Catalysts for Growth
- Rising disposable incomes
- Improved connectivity
- Digital access, and
- Changing lifestyles
For hotel companies, the opportunity is not simply about more people travelling. It is about understanding that not every traveller wants the same experience, has the same budget or stays for the same reason. This is influencing everything from brand positioning and room pricing to property selection and expansion strategies.
Travel’s Changing Geography
India's travel map is expanding beyond conventional holiday destinations and business hubs. Pilgrimage trips, weekend escapes, family holidays and business visits are bringing newer cities into focus. Destinations such as Ayodhya, Varanasi and Ujjain are attracting visitors throughout the year, creating demand for hotels, restaurants and allied services.
Better connectivity and easy online bookings are further encouraging travel to lesser-explored places. For hotel operators, this means looking beyond tourist appeal. Business activity, religious visits, weddings and local events can make a destination commercially viable, even without a traditional holiday market.
Wyndham Hotels & Resorts is strengthening its midscale presence across markets such as Uttar Pradesh and Kerala through Ramada Encore by Wyndham and partnerships with local property owners.
“India's next phase of hospitality growth will come from destinations where travel demand is becoming more frequent and diverse throughout the year. Ramada Encore offers the flexibility to address these markets with a contemporary midscale proposition. Through the Wyndham Advantage, we provide owners with access to distribution, technology, loyalty programmes and operational support, helping them build sustainable hotel businesses,” says Rahool Macarius, Market Managing Director, Eurasia, Wyndham Hotels & Resorts.
The thinking is simple: a hotel needs to work for the kind of people who visit a destination. Markets with a mix of business travellers, pilgrims and domestic tourists may require a different proposition from those dependent largely on leisure tourism. Identifying this demand mix is becoming an important part of hotel development.
Unique Journeys, Unique Stays
A business traveller checking in for a quick overnight stay, a family settling in for a holiday and a budget-conscious guest looking for a comfortable room are hardly seeking the same hotel experience. Their priorities differ, and hotel companies are increasingly recognising that a single brand cannot cater to every kind of traveller.
This is giving multi-brand portfolios greater relevance. By offering different brands across price points and service categories, hotel operators can reach a wider audience, adapt to local demand and give each property a proposition that fits its customer base.
Suba Hotels Ltd has developed a portfolio spanning premium, midscale and budget accommodation. Its brands include Clarion, Suba Hotels, Click Hotels & Resorts, Quality Inn, Comfort Inn, GenX Hotels and RnB Hotels.
Premal M. Zaveri, Senior Vice President – Business Development, Suba Hotels Ltd, explains, “Our multi-brand portfolio allows us to address different traveller segments and price points. Clarion caters to premium business and leisure guests, while Suba Hotels focuses on full-service accommodation. Click Hotels & Resorts targets technology-oriented professionals and modern travellers. Quality Inn and Comfort Inn serve midscale customers, while GenX and RnB cater to travellers looking for comfortable and affordable stays.”
For hotel companies, such segmentation also makes expansion decisions more practical. A premium property may not be commercially viable in every emerging market, but a midscale or budget hotel could find a steady customer base among business visitors, families and religious travellers.
The opportunity lies in understanding what a particular market can support rather than simply taking an existing hotel format and replicating it in another city.
Digitally smart travellers desire smart stays
Today's travellers do their homework before checking in. They compare prices, scan reviews and book at the tap of a screen. But convenience does not end with a reservation; quick check-ins, seamless payments, reliable Wi-Fi and personalised services are becoming part of the expected stay.
Hotels, in turn, are turning to technology to stay ahead. From digital bookings and AI-led pricing to smarter inventory and revenue management, technology is changing both the guest experience and the business of running hotels.
Wyndham is also looking at how its brands can respond to different travel occasions and emerging destination requirements.
“India's evolving travel culture is creating demand for accommodation suited to different travel occasions. We are responding by expanding our lifestyle and upscale offerings while matching brands to emerging destinations. The introduction of Vienna House Easy in Vrindavan reflects this approach. Our franchise model, supported by Wyndham Connect, technology and global distribution capabilities, gives owners the flexibility and resources to address changing market requirements,” says Macarius.
Suba Hotels is taking a similar approach by combining technology with pricing and customer engagement initiatives.
“At Suba, we are adapting to changing traveller preferences through format customisation, technology, AI-led pricing and direct customer engagement. We are introducing technology-enabled services such as digital check-in, keyless access and work-friendly facilities, while adopting AI-driven revenue management to optimise room rates according to local demand. Through Suba Rewards, personalised benefits and exclusive offers, we aim to increase direct digital bookings to 70% and encourage repeat stays,” Zaveri adds.
The focus on direct bookings and loyalty is particularly relevant as hotel brands look to build relationships beyond a single transaction. A guest who has a good experience during a business trip may return with family, while someone visiting a religious destination may choose the same brand for another journey. Retaining such customers can become as important as attracting new ones.
The Power of Local Partner-Led Expansion
Entering a new market takes more than a promising location. Property costs, local expertise and operational capabilities all play a role in making a hotel project viable. This is driving hotel companies towards franchising, management contracts and revenue-sharing models to expand with local partners.
While owners gain access to established brands, technology and global distribution networks, operators can widen their footprint without bearing the entire cost of property ownership. It is a partnership model that brings together local knowledge and brand strength to unlock new growth markets.
Summit Hotels & Resorts, which has built its presence largely across the Eastern Himalayas and leisure destinations, is looking at opportunities emerging from changing travel preferences.
“India's next hospitality opportunities will not necessarily be limited to established destinations. We see potential in markets where changing travel preferences are creating new reasons to visit. Our strategy is to develop differentiated formats around why people travel, while entering destinations where we believe demand will strengthen over time,” says Sumit Mitruka, CEO, Summit Hotels & Resorts.
This approach also points to the growing potential of destinations that may not have traditionally featured on the hotel industry's expansion map. As travel interests change and connectivity improves, newer locations can attract visitors looking for experiences beyond conventional holidays.
Radisson Hotel Group South Asia also sees opportunities across metropolitan markets, leisure destinations and smaller cities as branded accommodation gains wider acceptance.
“India's hospitality sector is entering a new phase, supported by expanding travel demand, improving infrastructure and growing investor confidence. Opportunities are emerging across metropolitan areas, leisure destinations and fast-growing regional markets. Our focus is on building a balanced portfolio that reflects changing traveller preferences while working with owners to bring the right brands to the right destinations. We remain confident about the sector's long-term growth potential,” says Nikhil Sharma, Managing Director and Chief Operating Officer, Radisson Hotel Group South Asia.
For hotel companies, the next phase of expansion will require a closer understanding of local demand and the economics of each property. The right location matters, but so does the choice of brand, room category, pricing and operating partner.
Beyond Destinations, Towards New Opportunities
India's hotel industry is entering a phase where growth will depend as much on understanding travellers as on entering new destinations. Pilgrimage towns, business hubs and weekend getaways each offer distinct opportunities, calling for the right brands, formats and price points.
Multi-brand portfolios, technology and asset-light partnerships are giving hotel companies more ways to tap this demand. As domestic travel gains momentum and newer destinations attract visitors, India's hotel industry is likely to see expansion beyond traditional hospitality hubs. The coming years could bring more branded hotels to smaller cities, greater demand for midscale accommodation and innovative formats catering to specific travel needs.
For the industry, the opportunity is clear: the future will belong to brands that understand not just where people travel, but why they travel.
