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Amid fast-paced growth momentum in India’s hospitality industry, hotel room rates are expected to rise up to six per cent to be in the range of ₹9,400 to ₹9,700 in 2026, driven by continued growth in domestic tourism, corporate travel, and demand continuing to outpace supply across most markets in the country.
In 2025, hotel room rates rose by seven per cent compared with 2024, according to Hotelivate, a hotel consulting firm.
While December was expected to carry this momentum forward, operational disruptions at IndiGo towards the end of the year are likely to temper performance in the final month.
Consequently, the industry is now projected to close CY2025 with occupancy levels in the range of 65 to 67 per cent and ARRs between ₹8,800 and ₹9,200, as per data shared by HVS Anarock.
This comes after hotel room rates hit record highs in 2024, and 2025 saw several events affecting growth, from geopolitical issues to an aeroplane crash, extended rains and flight disruptions.
However, the hospitality industry’s room rate growth is now expected to moderate over time or enter a phase of stabilisation marked by measured and sustainable growth across key operating metrics, according to industry experts.
Corroborating Lamba, Manav Thadani, founder and chairman, Hotelivate, noted that while rate growth is expected to moderate over time, it is likely to remain steady.
In 2026, midscale and upper-midscale hotels will constitute the largest share of the proposed supply, accounting for over 50 per cent of the total pipeline, Thadani highlighted.
Additionally, calendar year 2026 will see an unusually high number of long weekends, which is likely to encourage incremental short-haul leisure travel, especially to destinations close to major cities.
As a result, Royal Orchid Hotels anticipates maintaining its double-digit revenue growth next year.
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