NewsStocks75% of Indian Hoteliers Anticipate Positive Business Growth Driven by Tier III Markets and Event Travel75% of Indian Hoteliers Anticipate Positive Business Growth Driven by Tier III Markets and Event Travel
The India Accommodation Barometer reveals that 75% of Indian hoteliers expect positive business growth, up from 69% in 2024, driven by strong demand from tier III markets and event-led travel. The survey of 285 industry executives shows 56% experienced increased bookings from events, while 48% plan higher capital expenditure. Despite technology adoption challenges including integration complexity and implementation costs, the sector demonstrates resilience through strategic partnerships and workforce development initiatives.
*this image is generated using AI for illustrative purposes only.
The Indian hospitality sector demonstrates remarkable resilience and optimism, with a significant majority of hoteliers expecting positive business growth in the coming months. This confidence emerges despite global economic uncertainties, driven by strategic market developments and innovative approaches to business expansion.
Strong Growth Expectations Across the Industry
According to the third edition of the India Accommodation Barometer by Booking.com, created in partnership with Statista, three-quarters of Indian hoteliers anticipate positive business development. The survey, conducted between July 7 and September 1, 2025, included responses from 285 executives and managers across India's travel accommodation sector.
| Growth Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Hoteliers Expecting Positive Growth | 75% | 69% | +6% |
Santosh Kumar, Regional Manager for South Asia at Booking.com, emphasized the industry's momentum: "Our industry continues to build momentum, marked by resilient demand and steady optimism. From the rise of tier III cities to the adoption of AI, India's accommodations are meeting challenges with proactive innovation."
Tier III Cities Leading Market Optimism
Tier III cities have emerged as the most promising segment, showing exceptional positivity across key performance indicators. These markets demonstrate the strongest outlook in terms of occupancy rates, average daily rates (ADR), and future business prospects, representing a significant shift in India's hospitality landscape.
Event-Driven Travel Boosting Revenue Streams
Event-led travel has become a crucial revenue driver, particularly during traditionally low-demand periods. The report reveals substantial impact from this segment:
| Event Travel Impact | Percentage of Hoteliers |
|---|---|
| Increased Bookings Due to Events | 56% |
| Improved Revenue Per Room | 41% |
| Planning Collaboration with Event Organisers | 49% |
| Planning Partnerships with Tourism Boards | 45% |
Investment and Technology Adoption Trends
Despite challenges, investment intentions remain robust across the sector. Nearly half of the surveyed hoteliers plan to increase their capital expenditure, with 48% committing to higher investment levels. However, technology adoption reveals a cautious approach, particularly regarding artificial intelligence applications.
Hoteliers show measured confidence in AI implementation for operational functions:
- Pricing and revenue management: 39% confidence level
- Housekeeping scheduling: 35% confidence level
The primary challenges hindering technology adoption include:
| Technology Challenge | Percentage Citing |
|---|---|
| System Integration Complexity | 36% |
| High Implementation Costs | 35% |
| Unclear Return on Investment | 35% |
Workforce Development and Skill Enhancement
The hospitality sector faces distinct hiring challenges across different market tiers. In tier I cities, operators are expanding teams to meet growing demand, with operational roles being easier to fill. However, skill gaps and salary pressures highlight the critical need for comprehensive upskilling initiatives.
Tier III cities present more significant workforce challenges, with 67% of accommodations identifying skill shortages as their primary hiring concern. To address this gap, 41% of properties are increasing their training budgets, combining in-house development programs with external learning support.
The report underscores the Indian hospitality industry's remarkable adaptability and strategic focus on sustainable growth. Through innovation, strategic partnerships, and targeted workforce development, the sector positions itself to capitalize on emerging opportunities while effectively managing operational challenges.
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