India Needs 2.1 Lakh New Hotel Rooms by 2035: CBRE Report
A CBRE report reveals India needs up to 2.1 lakh additional hotel rooms by 2035 to keep up with rising domestic tourism and business travel.
India's hospitality landscape is on the verge of a massive transformation. To keep pace with a surging appetite for travel and luxury, the country will require an estimated 1.9 lakh to 2.1 lakh additional hotel rooms by the year 2035. This ambitious expansion translates to a staggering 120-125 million square feet of new hospitality real estate, according to a comprehensive report by CBRE.
Beyond Recovery: A New Era of Growth
The hospitality sector has officially moved past the shadow of the pandemic. According to CBRE, the industry has transitioned from a recovery phase into a period of sustained growth. This momentum is being fueled by a combination of rising disposable incomes, aggressive infrastructure development, and a fundamental shift in how Indians prefer to travel.
The report highlights that the sector has emerged as one of the most resilient alternative real estate investments. Currently, India's organised hospitality sector consists of approximately 4.5 lakh rooms. By the end of 2025, overall hotel occupancy reached nearly 64 per cent, signaling a strong demand that is pushing the current infrastructure to its limits.
Breaking Down the Room Requirements
The demand for new rooms isn't limited to one specific tier; it spans the entire spectrum of hospitality, from budget stays to ultra-luxury experiences. The report provides a detailed breakdown of where the new capacity is most needed by 2035:
- Upscale Hotels: Projected requirement of approximately 43,000 additional rooms.
- Midscale Hotels: Expected need for another 42,000 rooms.
- Luxury Hotels: Anticipated requirement of around 29,000 additional rooms.
A notable trend is the preference for premium stays. Because supply additions in the luxury and upscale segments have remained relatively limited, hotel room rates and occupancy levels have seen a significant boost.
Financial Performance and Investment Trends
The financial health of the sector is reflecting this surge in demand. Revenue per available room (RevPAR), a critical metric for measuring hotel performance, grew by about 11 per cent in 2025, reaching approximately Rs 5,500.
This profitability has attracted substantial capital. Between 2024 and the first half of 2026, the hospitality sector drew in roughly USD 905 million in real estate investments. To scale quickly while minimizing capital risk, hotel operators are increasingly leaning on franchise partnerships and management contracts. Simultaneously, investors are shifting their focus toward strategic joint ventures and larger platforms.
New Frontiers: Spiritual and Experiential Tourism
While "gateway markets" continue to offer high pricing potential for luxury and upper-upscale hotels—driven by international demand and MICE (Meetings, Incentives, Conferences, and Exhibitions) travel—the report points toward a shift in geography.
Operators are now looking beyond established urban hubs and venturing into smaller leisure and cultural destinations. The rise of spiritual tourism, wellness retreats, and experience-led travel, coupled with improved connectivity, is creating fertile ground for resort-led formats in emerging locations.
The sector's future growth will hinge on the ability of operators to deliver experiences that align with changing consumer preferences, alongside the quality of assets and strategic location choices.