India’s luxury hotel industry saw an increase in demand for high-end and luxury places to stay from people who travel.
High levels of income more importance on traveling and more people traveling for business have helped the luxury hotel industry in India grow.
Rising Demand For Luxury Accommodation In India
People who travel in India like the comfort of having their personal helper, good food and special experiences which has made more people want better places to stay in the country.
Also people from countries still want luxury hotels that give them a chance to experience Indian culture and have good service and modern things. According to ICRA data the demand for high-end hotels is expected to go 8-10% in the years 2025 to 2028 while the number of new hotels will only go up 5-6%. This will make the hotels that offer high-end stays have occupancy and higher prices in important places.
Emerging Preference For Tier-II Hotel Accommodations
Even though cities like Mumbai, Delhi, Bangalore and others that’re Tier-I cities had steady demand for luxury places to stay now hotel builders are looking more at places that are Tier-II and Tier-III. According to JLL data hotels in Tier-II and Tier-III areas made up 40% of the value of the deals done in 2025.
People who invest money are very interested in places like Rishikesh, Goa, Udaipur, Nashik, Vadodara, Lonavala and other places that are Tier-II and Tier-III.
Places where people go for reasons are also getting a lot of new luxury hotels compared to earlier years. This is because there are a lot of people who visit these places for reasons and want good places to stay.
Places like Ayodhya, Varanasi, Tirupati, Shirdi and other holy places are expected to see an increase in investments in luxury hotels.
Growing Interest From International Hotel Chains
International hotel companies are looking at India because of its end and luxury hotel market. They are not just looking at the cities but also at new areas that are resorts near airports and places with religious importance.
International hotel chains are also focusing on Indias luxury hotel market because it can give a return on money invested.
At the time they are expected to introduce lifestyle brands in India to meet the needs of more people who are picky about where they stay. The luxury hotel market in India will have competition as international hotel chains start to work there.
Sustained Confidence In India’s Hotel Investment Market
India’s hotel investment market had 28 deals 567 million US dollars in 2025. This is more than the 340 million US dollars in 2024. The luxury and high-end parts of the market made up 42% and 41% of the value of the deals in 2025.
Also 35% of the deals were made by companies and private investors in 2025 showing trust in the luxury part of the hotel business in India.
Strong Performance By India’s Hotel Industry
India’s hotel industry is doing well even when there are problems. Despite an economy and problems in the world it has given good returns to people who invest money.
According to JLL data the hotel industry in India had a 12.9% increase in RevPAR in the quarter of 2025. More people traveling for business and for fun along with weddings and events for meetings have made more people want end and luxury hotels.
The second quarter of 2025 had the rise in RevPAR in Bangalore because more people stayed and the prices went up.