As the Indian hospitality industry braces for a strong 2025, the sector is poised to exceed pre-Covid levels in foreign tourist arrivals while continuing to be a vital contributor to India’s economy. The sector’s projected growth is aligned with India’s ambition to become the third-largest global economy by 2047, with hospitality expected to play a central role in this economic transformation. Hotel Association of India (HAI) President KB Kachru highlighted the sector’s multiplier effect on the economy, surpassing even manufacturing and agriculture, and stressed that higher occupancies and average room recoveries are anticipated.
The sector’s value is expected to soar, with India’s travel market growing from USD 75 billion to USD 125 billion by FY27. International tourist arrivals are projected to reach 30.5 million by 2028, a sign of steady recovery post-Covid. Domestic tourism is also thriving, with a 15-20% increase expected due to initiatives like “Dekho Apna Desh” and infrastructure improvements under the Swadesh Darshan 2.0 scheme.
Key industry leaders, including Puneet Chhatwal of Indian Hotels Company Ltd (IHCL) and Pradeep Shetty of the Federation of Hotel and Restaurant Associations of India (FHRAI), expressed optimism about the outlook for 2025. They noted that foreign tourist arrivals will likely exceed 17 million, generating over USD 36 billion in foreign exchange. Hotel occupancy rates are projected to surpass 75%, with MICE (Meetings, Incentives, Conferences, and Exhibitions) driving further demand.
However, the sector continues to advocate for crucial government support, including unified licensing, workforce upskilling, and targeted infrastructure investments. Kachru called for the classification of hotels as infrastructure to unlock financing opportunities, urging for policy interventions that recognize the hospitality sector’s potential for job creation, GDP growth, and foreign exchange earnings.
Despite facing challenges, such as limited recognition and financial constraints, the sector remains optimistic about its future growth trajectory, focusing on sustainability, digital innovation, and personalized experiences. As the sector prepares for continued growth, the industry leaders emphasize the need for supportive policies that will enable it to contribute significantly to India’s ambitious economic goals.