India’s hospitality industry is on a robust growth trajectory and is projected to surpass ₹1.1 trillion in revenue by FY2027, growing at a CAGR of 10.5%, according to the latest Rubix Industry Insights report. The sector is experiencing a strong rebound, driven by domestic tourism, foreign tourist arrivals (FTAs), and rising demand in the MICE (Meetings, Incentives, Conferences, Exhibitions) segment.
India’s hospitality sector has rebounded from its pandemic-era low, with occupancy rising from 35% to 68% in FY2024. Organised and branded hotels posted their best decade performance, with an Average Daily Rate (ADR) of ₹7,500 and Revenue Per Available Room (RevPAR) of ₹5,439.
This momentum is expected to continue. Demand is forecasted to grow at 10.5% annually, outpacing the 8% growth in supply, pushing occupancy to 73% by FY2027. The ADR is projected to climb to ₹8,900 and RevPAR to ₹6,497. Room inventory is expected to expand from 1.88 lakh in FY2024 to 2.41 lakh by FY2027.
While metros remain important, Tier-2 and spiritual destinations like Rishikesh, Udaipur, and Varanasi are showing high-yield potential. Western India leads in performance, with the highest occupancy rate at 69.5% and the country’s top RevPAR.
Domestic travellers are driving 50% of revenue growth, followed by foreign tourists at 30% and the MICE segment at 20%. FTAs are projected to hit 30.5 million by 2028, strengthening premium hotel occupancy and revenues.
Mohan Ramaswamy, CEO and Co-Founder of Rubix Data Sciences, commented, “India’s hospitality sector is expanding beyond metros into spiritual and mid-range travel routes. As the market crosses ₹1 trillion, our report offers a risk-aware roadmap to support sustainable and profitable growth.”
The report attributes the sector’s upward trajectory to infrastructure investments, state tourism initiatives, and a digitally driven travel culture, marking a structural evolution in India’s travel and hospitality space.