India’s hotel sector is entering an exciting phase, buoyed by robust domestic traveler demand. With global tourism trends on the rise, the local market is firmly positioned to capitalize on this momentum, primarily driven by Indian travelers. Economic growth is catalyzing increased spending, while improvements in infrastructure, supported by government investment, are making travel more accessible than ever.
Domestic Demand is Booming
Mandeep Lamba, South Asia president at HVS, highlights the broad spectrum of factors contributing to the surge in domestic travel. “Short breaks, drive-to leisure, pilgrimages, weddings, and social celebrations continued to anchor demand across regions and seasons,” he states. This diverse demand is not just concentrated in major tourist hotspots; it underscores a significant shift in travel patterns across the country.
Increasingly, Tier-II and Tier-III cities are cementing their place in India’s travel narrative, supported by a decentralization of economic activities and improved regional connectivity. These once-overlooked markets are now central to the growth story of India’s hospitality sector, providing a wealth of opportunities for both established and emerging hotel brands.
In 2025, the industry witnessed a remarkable surge in growth, with record signings that added over 47,000 rooms to the pipeline in the first 11 months alone—a substantial 31% increase from the previous year. Developers opting for strategic alliances have become a common trend, aiming to enhance their growth pace and capture market share.
Among the noteworthy collaborations was Marriott’s partnership with The Fern Hotels & Resorts. This alliance has led to the rebranding of several Fern properties under the Series by Marriott, greatly benefiting both parties in terms of market reach. The initial phase of conversions in November 2025 saw 26 hotels in 23 cities transition to this new branding, and Marriott celebrated a significant milestone with the launch of its 200th hotel in India—the Westin Jaipur Kant Kalwar Resort & Spa.
In another significant move, Accor reaffirmed its commitment to expanding its footprint in India by strengthening its alliance with Indian conglomerate InterGlobe, with whom it has previously launched several Ibis hotels. This partnership aims to establish a network of 300 Accor branded hotels by 2030. A majority stake acquisition in hotel management specialist Treebo is set to facilitate the rollout of Ibis and Mercure properties under a master license agreement.
Local Groups Tap Investors
The positive momentum in the Indian hotel sector has driven local hotel groups to achieve record performances. The Indian Hotels Company has successfully expanded its portfolio, proudly launching new brands that cater to diverse traveler needs. Similarly, the ITC conglomerate has demerged its luxury hotel division, allowing for faster and more flexible growth strategies moving forward.
Additionally, several Indian hotel businesses embarked on Initial Public Offerings (IPOs) in 2025, aiming to attract new investors to bolster their growth initiatives within this flourishing market. Prominent names such as Leela Hotels, Brigade Hotel Ventures, and Suba Hotels have taken substantial steps to attract capital for their expansion plans. The much-anticipated IPO of the Oyo group is also on the horizon, promising to revolutionize the branded hotel landscape further, particularly in the budget segment.