Day 1 of understanding about the Indian Hospitality Sector
- themorrigannews
- Sep 22
- 2 min read
Updated: Sep 24
The hospitality industry is a rapidly developing and fast-growing market in India; India is renowned for its diverse culture, rich heritage, and stunning natural landscape. It draws millions of Indian and foreign travellers year in and year out, leaving hotels as an essential part of the hospitality services. The Indian hospitality industry has always been a blend of indigenous ways of living and advanced bookings, with accommodation from grand palaces and world-class hotels to budget inns, boutique hotels, Yog ashrams, and homestays.
The hotel industry in India has grown phenomenally in recent years, primarily driven by a mix of economic, social, and technological factors. The hotel industry in a country plays a significant role in boosting tourism, promoting economic development, and generating employment.Recent trends in India’s hospitality industry:
The market size of the hospitality industry in India is projected to be approximately US$24.61 billion in 2024 and is anticipated to reach US$31.01 billion by 2029. The projected growth is expected to occur at a compound annual growth rate (CAGR) of 4.73% through the next 5 years.
The hospitality sector was one of the most affected sectors during 2020-21 due to pandemic-induced restrictions. Key performance indicators such as revenue per available room (RevPAR), occupancy rate, and average daily rate (ADR) declined. The industry rebounded in 2022, with ADR and RevPAR surpassing pre-pandemic levels, and occupancy rates showing substantial improvement. The positive trend continues into 2023, with further growth in ADR, RevPAR, and occupancy rates, indicating a resilient rebound of the hospitality sector.
The average revenue per user (ARPU) in the hospitality industry, as depicted from 2017 to projected figures in 2028, shows a consistent upward trajectory. Starting at US$163.6 in 2017, ARPU remained stable over the next few years, before experiencing incremental growth. The year 2023 witnessed a notable increase to US$166.5, followed by further anticipated growth in the forecast years. By 2028, ARPU is expected to reach US$174.1, indicating a steady rise in revenue generation per user over the span of a decade. Several factors can be attributed to this growth trajectory, particularly driven by economic expansion, rising per capita income and the growing middle class, which collectively fuel increased spending on leisure and hospitality services.
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