India's Hospitality Sector Likely To Need Up To 125 Mn Sq. Ft. More Space By 2035

(MENAFN- IANS) New Delhi, Oct 22 (IANS) India's organised hospitality sector is estimated to require roughly 120–125 million sq. ft. of additional real estate by 2035, equivalent to around 1,90,000–2,10,000 incremental hotel keys, a report said on Thursday.

The report from CBRE Research said the hospitality sector attracted approximately $905 million in real estate investments between 2024 and H1 2026.

The opportunity spans economy, midscale, upscale, upper‐upscale and luxury hotel categories and will be shaped by market selection, operating model, land availability and the ability to align with evolving business, leisure and experience‐led travel demand.

Gateway cities account for around 35 per cent of branded hotel inventory but generate about 50 per cent of sector revenues, supported by corporate, MICE (Meetings, Incentives, Conferences, and Exhibitions) and transit demand, the report added.

Meanwhile, leisure, cultural and spiritual destinations are creating scalable opportunities for resort-led and experience-driven formats beyond traditional urban centres.

“India's hospitality opportunity is becoming increasingly diverse, with growth extending beyond traditional hotel markets and formats. As business, leisure and experience-led travel evolve, developers and operators are taking a more market-led approach to identifying opportunities. This involves understanding the demand drivers of each destination and building strong operating partnerships,” said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE.

The focus is moving beyond adding inventory to creating differentiated hospitality assets that remain relevant to changing traveller preferences and deliver sustainable long-term value, he added.

Investor interest is increasingly shifting towards platform-level commitments, strategic joint ventures and income-generating assets, while management contracts and franchise partnerships are enabling operators to expand with lighter balance sheets.

“Domestic tourism is emerging as a structural driver of India's hospitality sector, supported by rising discretionary spending, improved connectivity and growing interest in leisure, wellness and destination-led travel,” said Rami Kaushal, Managing Director, Consulting and Valuation Services, India, Middle East and Africa, CBRE.

Management contracts, franchise partnerships, brownfield acquisitions and rebranding are important routes for operators and investors seeking to build scale and accelerate market entry. The report also identified selective premiumisation across luxury, lifestyle and premium resort formats as a potential source of stronger pricing power.

-IANS

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