Amid strong investor interest, rising investments and asset light expansion strategy, listed hotel operators are capitalising on strong underlying growth potential to drive the hospitality sector towards long-term sustainable growth.

According to a recent CBRE Report, ‘India Alternate Sectors Outlook 2026, listed hotel operators are expected to add over 70000 keys by 2030, driven by rising domestic tourism and improving infrastructure. The industry is witnessing robust performance, marked by higher occupancy, increasing room rates, and a clear shift towards premium and experience-driven offerings. The report notes that the sector is transitioning from a phase of post-pandemic recovery into structural maturity, characterised by disciplined expansion and pricing stability.

The hospitality industry’s market size is projected to rise from approximately USD 24.6 billion in 2024 to USD 31 billion by 2029. Domestic tourism is likely to lead this growth, having posted a 40% year-on-year (YoY) rise in visits to 4.1 billion in 2025. The hospitality sector’s trajectory, according to Anshuman Magazine, Chairman & CEO-India, South-East Asia, Middle East & Africa, CBRE is a testament to India’s economic resilience, supported by rising disposable incomes and improving accessibility facilitated by large-scale infrastructure development. “As the industry accelerates its transition towards experience-driven travel and captures institutionalized demand across spiritual and cultural centres, we anticipate robust and long-term expansion for the country’s hospitality ecosystem”, he says.

The sector maintained strong growth momentum throughout 2025 despite year-end headwinds such as geopolitical tensions and operational disruptions in aviation sector.

During the year, overall occupancy levels reached 64%, providing a foundation for improved financial performance for operators. Revenue per available room (RevPAR) rose 11% year-over-year, surpassing the 9% growth recorded in 2024, while average daily rates (ADR) increased by 8.7%. The supply pipeline in 2025 shifted decisively towards premiumisation, addressing the heightened consumer appetite for luxury experiences. The Upper Midscale, Upper Upscale, and Upscale categories cumulatively accounted for ~60% of new openings.

Since 2024, India’s hospitality sector has witnessed a substantial surge in investment activity, with institutional players aggressively acquiring large stakes. In 2025, the total hotel deal value reached approximately USD 456 million, representing a 2.5x Y-o-Y growth from USD 184 million in 2024.This momentum is projected to continue over the next two years as investors actively explore portfolio-led investments and targeted asset acquisitions.

Major players also turned to public markets, using high-profile IPOs to raise capital, reduce debt, and accelerate regional expansion. Says Rami Kaushal, Managing Director, Consulting & Valuations, India, Middle-East & Africa, CBRE, “Institutional players are aggressively acquiring large stakes in the hospitality sector. Investor interest is increasingly shifting towards diversification into leisure destinations, pilgrimage centres, and emerging commercial cities with a constrained supply of branded inventory. The strategic realignment towards asset-light expansion models is enhancing the sector’s institutional appeal, paving the way for sustained consolidation and M&A activity as operators look to scale their platforms.”

The sector is witnessing a realignment, with operators increasingly adopting asset-light expansion models such as management contracts and franchise partnerships to strengthen balance sheets and pursue more disciplined growth strategies. This is likely to enhance the sector’s institutional appeal, according to the report. As the industry expands, consolidation activity is expected to gain momentum in 2026.

Moreover, operators are increasingly exploring acquisition-led growth strategies to scale portfolios and broaden market presence. Major hospitality players are evaluating such opportunities across tier-II and tier-III cities, supported by improving connectivity and expanding tourism infrastructure. Additionally, the country’s extensive base of independent and unbranded hotels presents opportunities for asset aggregation and brand conversions.

Against this backdrop, investment activity in the hospitality sector is likely to remain active through 2026, supported by sustained travel demand and continued investor interest in scalable hospitality platforms.

Developers and operators are also transitioning towards higher-yield, experience-driven assets. They are increasingly focusing on integrated mixed-use hubs and residential-style luxury offerings to cater to high-net-worth individuals seeking a “hotel-at-home” lifestyle. Recent policy initiatives are expected to support the continued development of this ecosystem.

The spiritual and heritage landscape in the country is also evolving into a year-round institutional demand segment, supported by government investments and the overhaul of national transit networks. Infrastructure developments, such as the proposed high-speed rail corridors and the ongoing expansion of the national aviation sector, are enhancing accessibility and enabling premium operators to enter emerging markets with greater logistical confidence.

Data Centre Market in an Overdrive

Growing digital economy, expanding internet user base and increasing investments from hyperscale operators are positioning India as a key destination for data centre development.

Amid global transformation, driven largely by the rapid growth in cloud computing, artificial intelligence and data-intensive technologies, India is emerging as a strategic data centre hub within the Asia-Pacific region.

According to Vestian’s latest report, India’s data centre market valued at approximately USD 10 billion in 2025, is expected to more than double to USD 22 billion by 2030, underscoring the strong growth trajectory and rising investor confidence in the sector. This rapid growth can be attributed to rising internet and telecommunications subscribers, increasing enterprise cloud adoption, expanding AI and high-performance computing workloads, and shifting consumer preferences towards digital payments and OTT platforms. The rollout of 5G infrastructure has pushed average monthly wireless data consumption beyond 25 GB per user, reflecting a sharp rise in data usage and reinforcing the need for scalable data centre infrastructure.

A Snapshot of India’s Data Centre Market

Shrinivas Rao, CEO, Vestian says that India’s data centre sector is rapidly transforming on the back of strong policy support and rising digital demand. “Despite a limited share of global capacity, India has a huge upside potential to lead in Al infrastructure. With single-window clearances, 20-year tax exemptions, GST benefits, and incentives extending to 2047, India is strategically positioned to emerge as a global data centre and Al hub”, he says.

India’s data centre industry has attracted significant investments from global and domestic investors. Between 2020 and 2024, the sector attracted approximately USD 13–15 billion in investments, with foreign institutional investors accounting for nearly 80% of the total capital inflows. The investment pipeline remains strong, with announced projects totalling USD 60–70 billion over the next five years, largely driven by hyperscale platforms and joint venture developments. India also offers a competitive cost advantage, with data centre construction costs of USD 6–7 million/MW, significantly lower than those in mature APAC markets such as Singapore and Japan, thereby enhancing its attractiveness for large-scale investments.

Data centre infrastructure in India remains concentrated in a few key metropolitan markets. Mumbai remains the country’s largest data centre hub, driven by strong global connectivity and infrastructure advantages. At the same time, Chennai serves as a key global data gateway, with multiple submarine cable landings that enable high-capacity, low-latency connectivity. Meanwhile, Hyderabad, Bengaluru, and Pune are emerging as important secondary hubs owing to robust IT ecosystems, ample land availability, and competitive operating costs.

City-wise Share of Operational Capacity

Note: *Others include Ahmedabad, Kochi, Mohali, Vijayawada, Jaipur, Nashik, Bhubaneshwar, Indore, Gandhinagar, and Raipur

Source: Vestian Research

While Mumbai and Chennai remain the primary hubs, data centre operators are increasingly exploring Tier-II cities to support distributed digital infrastructure. Cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining traction due to competitive land availability, improving digital infrastructure, supportive state government policies, and growing enterprise demand. Operational capacity in Tier-II markets is currently estimated at 60–80 MW and is expected to exceed 100 MW by the end of 2026.

India’s data centre market is expected to witness sustained expansion over the next decade as digital transformation accelerates across industries. Installed capacity is projected to reach 1.7–2.0 GW by the end of 2026, backed by nearly USD 30 billion in investments. This number is further expected to go up to 4–5 GW by 2030. Rising AI adoption, increasing demand for cloud infrastructure, and the rapid growth of digital platforms are expected to drive the next wave of growth in India’s data centre market.