India's hotel market set for stronger second-half growth on leisure surge
PhillipCapital forecasts that India's hospitality industry will accelerate in the latter half of FY27, driven by robust domestic leisure travel and a gradual rebound in corporate and overseas trips.
According to a PhillipCapital sector report, India's hotel industry is poised for accelerated growth in the second half of FY27, buoyed by strong domestic leisure demand and a steady recovery in corporate and foreign travel. In the first quarter, occupancy increased by 2-4 percentage points year-on-year, average room rates rose 6-8%, and RevPAR grew 11-13% despite geopolitical disruptions. The outlook is reinforced by a heavier wedding calendar, better MICE activity and a seasonal rise in international arrivals from October.
Limited new hotel openings in major markets are likely to keep room rates and RevPAR elevated as demand picks up. Companies such as Leela Hotels, Indian Hotels, ITC Hotels and Lemon Tree reported double-digit revenue and EBITDA gains, while resort properties posted higher RevPAR growth than city-based hotels.
Why it matters
The outlook signals stronger earnings for hotel operators and potential price pressure for travelers in India.
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