India Luxury Hotel Market Size, Share, Analysis, Trends, Growth, Forecasts 2032

India Luxury Hotel Industry Prospective:

The India luxury hotel market size was worth around USD 2,472.03 million in 2023 and is predicted to grow to around USD 5,876.79 million by 2032 with a compound annual growth rate (CAGR) of roughly 10.10% between 2024 and 2032.

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India Luxury Hotel Market: Overview

The Indian luxury hotel industry is a thriving sector witnessing a steady rise in revenue. It deals with the investments and revenue associated with the Indian hospitality sector. The industry mainly focuses on high-end and luxurious accommodation providers and service centers. There are no set definitions or standards that qualify a lodging facility as luxury; however, in general terms, hotels with 4 or 5 stars are categorized in the luxury segment. They are mainly known for high-end facilities or amenities, opulence, and superior service. Luxury hotels in India also provide additional benefits such as gourmet dining experience, extravagant decor, butler service, spa, and in-house entertainment centers. The luxury hotels are mainly divided into two segments based on ownership. For instance, the Indian luxury hotel sector is filled with large hospitality conglomerates as well as standalone brands operating at a domestic or regional level. Each facility or brand has specific services to offer thus encouraging customer loyalty. The growing rate of international tourism is expected to fuel the regional market demand. However, the lack of standardization policies and the growing inflation rate will impact the market growth trends.

Key Insights:

• As per the analysis shared by our research analyst, the India luxury hotel market is estimated to grow annually at a CAGR of around 10.10% over the forecast period (2024-2032)
• In terms of revenue, the India luxury hotel market size was valued at around USD 2,472.03 million in 2023 and is projected to reach USD 5,876.79 million, by 2032.
• The India luxury hotel market is projected to grow at a significant rate due to the growing rate of international tourism in the country
• Based on the category, the chain segment is growing at a high rate and will continue to dominate the regional market as per industry projection
• Based on the type, the resorts segment is anticipated to command the largest market share
• Based on region, South of India is projected to dominate the regional market during the forecast period

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India Luxury Hotel Market: Growth Drivers

Growing rate of international tourism in the country will drive the market demand rate

The India luxury hotel market is expected to grow due to the rising rate of international tourism in the country. India is witnessing a surge in the number of foreign tourists attracted to its world-renowned service industry. As per official reports, more than 9 million foreign tourists visited the country in 2023. Additionally, the regional government is focusing on deploying new programs that will encourage international visitors to the country. The increase in the number of international connectivity along with ease of visa generation and the addition of new tourism circuits have been influential in attracting people from across the globe to visit the pristine places across the country.

Surge in investments to improve the tourism ecosystem in India will fuel the market growth trend

The steady rise in investments directed toward the regional tourism sector is expected to help improve the demand for luxury hotels in India. In the new Indian budget announced in July 2024, the country’s government emphasized adopting measures that will help the country position itself as a premier global travel destination. Various strategic projects and investments will be developed to achieve the ambitious goal. Some of the key highlights of the new budget included developing a more streamlined tax regime for foreign tourists, enhancements to beach destinations, and a special focus on religious & spiritual tourism. On the other hand, private companies are launching new hotels across the country to improve accessibility. As per market research, luxury hotel chains are targeting tier 2 and tier 3 regions as well in the country for higher revenue generation. In April 2024, a major player in India's tier-1 sectors, Radisson, announced the launch of its first luxury lifestyle brand in the form of Radisson Collection Hotel & Spa, Riverfront Srinagar.

India Luxury Hotel Market: Restraints

Higher associated costs and the presence of large low-income groups will limit the industry’s expansion rate

The India luxury hotel industry is expected to face specific growth restrictions during the projection period. Luxury hotels offer exceptional services and amenities. The cost of experiencing a luxury hotel stay is on the higher end. Thus making it unaffordable for a large segment of India’s low to middle-income groups. For instance, the average price of a weeknight in India’s Taj Mahal Palace in Mumbai is around INR 32,000. In addition to this, the country also has a massive presence of more affordable lodging facilities ranging in terms of prices and services. People unable to afford to experience luxury hotels have tremendous options in the form of budget-friendly facilities.

India Luxury Hotel Market: Opportunities

Increasing the launch of new online booking solutions may generate massive revenue generation opportunities

The industry for India luxury hotels is expected to generate more expansion opportunities during the projection period. The rise of online booking facilities in the form of applications and travel blogs has assisted in improving customer experience. The internet-based travel agencies offer several user-friendly solutions including generating a budget-friendly and comprehensive itinerary. They provide recommendations for things to do and experience at a new destination thus simplifying several complicated aspects of domestic and international tourism. The Indian Ministry of Tourism has launched the Incredible India application for assisting international and domestic travelers. In July 2024, the highly popular Uttarakhand region of India launched the first state-funded homestay booking portal.

Rising rate of business travel will fuel demand for luxury stays

The business travel rate in India is on the rise driven by increasing foreign investments in the country. Additionally, foreign ministers and officials have been traveling to India more frequently as the global order is steadily evolving. The investment opportunities in India are on the rise thus attracting a higher number of business and government officials. The trend is likely to impact the demand in the India luxury hotel market. In 2023, India witnessed a surge of over 25.01% in business travel spending.

India Luxury Hotel Market: Challenges

Lack of standardization in the luxury hospitality segment will challenge the market growth rate

The India luxury hotel industry faces problems in the form of limited standardization policies. There are limited guidelines that assist in qualifying a facility as a luxury. The parameters defining luxury hotels may differ from one region to another depending on the overall regional infrastructure of the state or the city. Additionally, the demand for authentic homestays dissociated from nature and the electronic world is growing rapidly which could impact the revenue in the traditional luxury hotel segment.

India Luxury Hotel Market: Segmentation

The India luxury hotel market is segmented based on category, type, and region.

Based on the category, the India luxury hotel industry segments are independent and chain. In 2023, the highest growth was observed in the chain segment. Dominant companies and houses headlining the hospitality industry are preferred as compared to independent facilities since the former tend to offer standardized services globally. In 2023, the Ritz-Carlton chain of hotels generated a massive revenue of over USD 3 billion as per official data.

Based on the type, the regional market divisions are resorts, airports, businesses, and others. In 2023, the resorts segment generated the highest revenue. Luxury resorts have higher demand, especially among leisure travelers. In addition to this, investments in airports-based luxury hotels are on the rise influenced by the increasing rate of business-related travel. The Mumbai International Airport in India is surrounded by over 15 luxury hotels.

India Luxury Hotel Market: Report Scope

India Luxury Hotel Market: Regional Analysis

South of India to emerge as a leading contributor during the projection period

The India luxury hotel market will be led by the South of India during the forecast period. As per recent statistics published by the National Database for Accommodation, the region of Kerala is home to the highest number of five-star hotels in the country. Several factors have been attributed as the essential growth drivers in the region. For instance, domestic and international tourism in the region is on the rise. Kerala is a favorite tourist destination hosting millions of people from across the globe and India every year. As per the Minister of Tourism in the region, Kerala hosted over 2,18,71,641 domestic visitors in 2023. In June 2024, Hilton, a leading American multinational hospitality company, signed papers for the first DoubleTree by Hilton in Kerala’s capital Kochi. The company will work alongside Indraprastha Group to develop the new luxury facility which is set to open by 2029. The Northern states of India are also key drivers for the regional economy. The growing number of people looking for leisure travel to explore India’s mountains and other regions is growing every year. In March 2021, India's tourism ministry launched several new campaigns promoting tourism in North Eastern regions of the country.

India Luxury Hotel Market: Competitive Analysis

The India luxury hotel market is led by players like:

• Hyatt Hotels Corporation
• ITC Hotels
• The Lalit
• Juniper Hotels (Hyatt managed properties)
• Mahindra Holidays and Resorts India Ltd. (Club Mahindra)
• Radisson Hotel Group
• The Indian Hotels Company Limited (IHCL) - Taj
• Vivanta
• and SeleQtions
• Chalet Hotels Limited
• Marriott International
• Neemrana Hotels
• AccorHotels
• Oberoi Hotels & Resorts (EIH Ltd.)
• Hilton Worldwide
• Lemon Tree Hotels Ltd.
• The Leela Palaces
• Hotels
• Resorts (HLV Ltd.)

The India luxury hotel market is segmented as follows:

By Category

• Independent
• Chain

By Type

• Resorts
• Airports
• Business
• Others

By Region

• India