India’s hospitality industry is projected to post revenue growth of 7% to 9% in the current financial year ending March, according to ICRA. That would mark another year of expansion for the sector, although at a slower pace than the estimated 11% growth seen in 2025-26.
The outlook suggests that premium hotels should continue to operate from a position of relative strength. Occupancy in that segment is expected to remain broadly steady at around 72% to 74%, indicating that demand is likely to stay resilient even as growth moderates from last year’s higher base.
ICRA also expects average room rates for premium hotels to move higher this fiscal year, which should help support revenue growth. Stable occupancy combined with firmer pricing points to continued momentum for better-positioned hotel operators, especially in the premium end of the market.
At the same time, the rating agency flagged geopolitical tensions in West Asia as a potential downside risk for the industry. While the sector’s near-term outlook remains positive, any escalation in the conflict could weigh on the broader hospitality environment and temper the expected growth trajectory.
