Sustained growth, more foreign tourists and infra status: Hospitality sector’s wish for 2026

New Delhi: As yet another new year dawns, India’s hospitality sector is gearing up for sustained growth momentum with a clear outlook of continued expansion, readying to welcome more foreign tourists than in pre-COVID days and hoping that their long-pending demand for infrastructure status will finally be granted by the government.

Ever grateful to 2025 – a “year of renewed optimism” – hospitality players said that in 2026, the sector will continue to be predominantly domestic demand-driven, a trend that is structural rather than cyclical, with India’s robust macroeconomic environment continuing to provide a strong foundation for the industry’s growth.

A harmonised infrastructure status for the hotel industry could unlock significant capital inflows for the sector, as it will facilitate easier financing, longer loan tenures, and lower interest rates, enabling smoother access to capital and reducing project delays caused by financial constraints.

The structural reform will also bolster India’s position in the global tourism market in line with the government’s vision to transform tourism into a sector generating millions of jobs by 2047, with a focus on achieving the ‘Viksit Bharat’ goal.

“India’s robust macroeconomic environment continues to provide a strong foundation for the industry’s growth,” Hotel Association of India President KB Kachru said.

A rising GDP trajectory, accelerated infrastructure development, including new airports, regional connectivity, and upgraded rail networks, with the government’s sustained focus on tourism and destination development programmes, have strengthened the ecosystem for business and leisure travel, he noted.

Bullish on the road ahead, Federation of Hotel & Restaurant Associations of India (FHRAI) president Surendra Kumar Jaiswal observed that India’s hospitality sector will continue to be predominantly domestic demand-driven, and this trend is structural rather than cyclical.

As per the Ministry of Tourism, domestic tourist visits account for over 85-90 per cent of total tourism volumes, making domestic travellers the industry’s most reliable and resilient demand base, he noted. “Over the past few years, rising disposable incomes, improved highway and regional air connectivity, and a growing preference for short-duration travel have significantly expanded the domestic travel footprint.”

Expressing similar views, Radisson Hotel Group Managing Director & COO, South Asia, Nikhil Sharma said India’s hospitality sector will remain largely domestic-led in 2026, driven by travellers seeking premium and experience-rich stays. “Occupancies are stable, but higher ADRs (average daily rates) continue to lift overall performance, with the strongest traction across NCR, Mumbai, Bengaluru, Pune, Udaipur, the wider Rajasthan circuit, Karjat, and Lonavala,” he added.

Likewise, Chalet Hotels Ltd MD and CEO Sanjay Sethi said, “As we look ahead to 2026, the growth drivers for Indian hospitality are both clear and durable. Business travel has returned with depth and predictability, domestic leisure continues to broaden and mature, and MICE and weddings remain powerful demand engines”.

Together, he said, “These segments are well positioned to sustain double-digit RevPAR growth for the industry”.

Royal Orchid Hotels Ltd president Arjun Baljee noted that 2025’s hospitality performance at about 6 per cent revenue growth fell short of the 7-9 per cent optimism, with aviation shocks erasing late-year momentum and exposing over-reliance on air travel.