India Luxury Hotel Market 2024–2033

Reports Description

India Luxury Hotel Market was valued at USD 32.4 Billion in 2023 and is expected to reach USD 62.2 Billion by 2032, at a CAGR of 8.1% during the forecast period 2023 – 2032.

A luxury hotel is a lavish accommodation that exceeds standard expectations, offering exceptional service, amenities, and exquisite design. Luxury hotel provides a refined and indulgent experience, catering to the discerning tastes of the most sophisticated and demanding clientele.

India Luxury Hotel Market: Growth Factors

Rise in travel and tourism industry drives market growth

The surge in the travel and tourism industry significantly propels the growth of the luxury hotel market in India. As more domestic and international tourists explore the rich cultural tapestry and diverse landscapes of the country, the demand for upscale accommodations rises.

Travellers seek immersive and lavish experiences, driving the development and expansion of luxury hotels. This invasion also stimulates investment in hospitality infrastructure, leading to the establishment of high-end properties equipped with world-class amenities.

The symbiotic relationship between the growing tourism sector and the luxury hotel market contributes to economic development, creating job opportunities and fostering a positive impact on related industries. This trend not only elevates India’s position as a premier tourist destination but also fuels the flourishing luxury hospitality sector, establishing a virtuous cycle of growth and excellence.

For instance, India is anticipated to emerge as a major player in the global travel market, set India in fifth position for outbound travel spending by 2027, reaching $89 billion compared to its current tenth position with expenditures of $38 billion in 2019.

According to a report by Bernstein, India is projected to claim the third spot in tourist inflows by 2027, with expenditures surging to $174 billion. These projections signify a remarkable growth trajectory for India in both outbound travel and domestic tourism, positioning it as a key contributor to the evolving landscape of the global travel industry.

Increasing number of international sports events, trade fairs, and exhibitions propels market growth

The escalating invasion of international sports events, trade fairs, and exhibitions significantly propels the luxury hotel market in India. As the country becomes a global hub for such gatherings, there is a burgeoning demand for upscale accommodations to cater to the discerning tastes of participants and attendees.

Luxury hotels position themselves as ideal venues, offering top-notch amenities, world-class services, and sophisticated ambience, thereby attracting high-profile guests. This trend fuels investments in the hospitality sector, fostering the development of more luxurious properties to meet the escalating demand, ultimately contributing to the robust growth of the Indian luxury hotel market.

For instance, the growing trend of hosting international sports events in India has played a pivotal role in fostering the nation’s athletic landscape. The events, such as the Commonwealth Games in 2010, the Asian Games in 1982 and 2010, and the World Athletics Championships in 2023, not only promote sports but also provide invaluable exposure and experience for Indian athletes. The surge in such prestigious events significantly influenced the luxury hotel market in India.

India Luxury Hotel Market: Restraints

Emergence of accommodation-sharing facilities at lower prices to limit luxury hotel services

The rise of accommodation-sharing platforms offering cost-effective alternatives poses a challenge to the demand for luxury hotel services in India. With travellers increasingly opting for budget-friendly options provided by platforms like Airbnb, luxury hotels face competition from more affordable and diverse lodging choices.

The emergence of these accommodation-sharing facilities, often at lower prices, redirects demand away from traditional luxury establishments. As cost-conscious consumers explore alternative and personalized accommodations, luxury hotels must innovate and emphasize unique offerings to maintain their appeal and distinguish themselves in a changing hospitality landscape.

Stringent rules for approval of Luxury Hotels

Stringent regulatory requirements are a barrier to the Indian luxury hotel market as they are restraining the development and introduction of new products and technologies. Some of the factors contributing to this reluctance are:

• Building Codes and Safety Standards: Adherence to strict building codes and safety standards to ensure the structural integrity and safety of the hotel.
• Zoning and Land Use Regulations: Compliance with zoning laws and land use regulations to ensure the property is designated for commercial or hospitality purposes.

India Luxury Hotel Market: Opportunities

Rise in green practices is the new trend in India luxury hotel market

The emerging trend of heightened environmental consciousness is reshaping the Indian luxury hotel market. Upscale establishments are increasingly adopting green practices, integrating sustainable initiatives such as energy-efficient technologies, waste reduction, and eco-friendly amenities.

This shift is driven by a growing eco-aware consumer base seeking responsible and ethical hospitality choices. Luxury hotels are aligning with eco-friendly practices not only to meet customer expectations but also to enhance their brand image, attract environmentally conscious guests, and contribute to global sustainability goals.

As environmental concerns gain prominence, the integration of green practices becomes a defining aspect of the evolving luxury hotel landscape in India. For instance, ITC Hotels in India generate 57% of their electricity from renewable sources, and in the last 5 years, reduced water usage equivalent to watering 100,000 trees.

They recycle over 99% of solid waste. ITC Hotels’ commitment sets a green example, influencing other luxury hotels to adopt eco-friendly practices.

India Luxury Hotel Market: Segmentation Analysis

India Luxury Hotel market is segmented by type, category and region.  Based on type, the market is classified into business hotels, airport hotels, suite hotels, resorts and others. Business hotels dominated the market in 2022 with a market share of 40% and are expected to keep their dominance during the forecast period 2024-2032.

Business hotels play a pivotal role in propelling the luxury hotel market in India. As the country experiences rapid economic growth, there is a concurrent surge in business activities, conferences, and corporate travel. Business hotels cater to the needs of discerning business travellers, offering sophisticated accommodations, state-of-the-art conference facilities, and personalized services.

This segment drives demand for premium amenities and services, influencing the overall luxury hotel market. International business travellers further boost the market, as they seek world-class hospitality during their stays. The interconnected nature of business and luxury travel fosters a symbiotic relationship, with business hotels acting as key contributors to the growth of the broader luxury hotel industry.

Based on category, the market is segmented into chain and independent. Chain operated hotels dominated the market in 2022 with a market share of 65% and is expected to keep their dominance during the forecast period 2024-2032, driven by the country’s burgeoning population, increasing disposable income, and growing tech-savvy middle class.

Chain-operated luxury hotels play a pivotal role in driving the Indian luxury hotel market by leveraging established brand recognition, standardized service excellence, and global appeal. By expanding its presence across key Indian cities and tourist destinations, these hotel chains contribute to the growth of the luxury hospitality sector.

Furthermore, the influence of international standards and contemporary trends introduced by these chains elevates the overall hospitality landscape in India, setting benchmarks for service, design, and culinary experiences. In essence, chain-operated luxury hotels not only cater to the rising demand for opulent accommodations but also shape and elevate the entire luxury hotel market in India.

Report Scope

India Luxury Hotel Market: Regional Analysis

India luxury hotel market is segmented into South India, North India, West India and East India. South India dominated the global market in 2022 with a market share of 45% in 2022 and is expected to keep its dominance during the forecast period 2024-2032.

South India plays a pivotal role in propelling the luxury hotel market in India due to its rich cultural heritage, diverse landscapes, and growing economic influence. The region’s historical attractions, such as ancient temples and palaces, coupled with scenic destinations, attract both domestic and international high-end travellers.

Cities like Bangalore, Chennai, and Hyderabad, being major IT hubs, contribute significantly to business tourism, fostering the demand for luxury accommodations. South India’s culinary delights, traditional art forms, and wellness practices also enhance the appeal of luxury experiences.

As the region witnesses economic growth, an increasing affluent class and corporate travel further boost the demand for upscale hospitality. The incorporation of cultural allure, business opportunities, and a rising affluent demographic positions South India as a driving force in shaping and expanding the luxury hotel market across the country.

India Luxury Hotel Market: Recent Developments

• In November 2023, Lemon Tree Hotels announced the expansion of its hotel services in New York, London, Singapore and Hong Kong. The company expanded internationally, with hotels opening in Dubai in December 2019 and in Bhutan in February 2020.

• In December 2023, IHCL signed deals for hotels in Bangladesh, Bhutan, Germany, and Saudi Arabia. The Taj Exotica Resort in Dubai and Bombay Brasserie restaurant commenced operations in Singapore in December 2022.

• In August 2023, Reliance Industries collaborated with The Oberoi Hotels and Resorts for joint management of three projects, including Anant Vilas in Bandra Kurla Complex, Stoke Park in the UK, and a Gujarat venture.

List of the prominent players in the India Luxury Hotel Market:

• OYO
• Lemon Tree Hotel
• Treebo
• Hyatt Hotels Corporation
• InterContinental Hotel Groups
• Marriott International
• Radisson Blue Hotels
• Shangri La Hotels & Resorts
• Taj Hotels Resorts & Places
• The Lalit Hotels
• The Leela Palace
• The Oberoi Group
• The Park Hotels
• Bharat Hotels Limited
• Hotel Leela venture Limited
• ITC Hotels Limited
• The Indian Hotels Company Limited
• Sarovar Hotels Private Limited
• Marriott Hotels India Private Limited
• Rosewood Hotels & Resorts
• Others

These key players are adopting various growth strategies such as mergers & acquisitions, joint ventures, expansion, strategic alliances, new product launches, etc. to enhance their business operations and revenues.

The India Luxury Hotel Market is segmented as follows:

By Type

• Business Hotels
• Airport Hotels
• Suite Hotels
• Resorts
• Others

By Category

• Chain
• Independent