Ask top executives at major hotel companies what the biggest growth market is for future hotel development, and most will name India. Accor, Marriott International, Hilton Worldwide and Wyndham Hotels & Resorts each have singled out India as a key strategic market, with Marriott claiming the country's largest existing footprint.
Yet the surge in brand development deals and joint ventures announced by hoteliers in recent quarters has done little to ease the hotel sourcing challenges facing companies doing business in India's first- and second-tier cities.
"It's one of the most challenging markets to source," said Neelu Singh, HRS SVP of APAC and Greater China. "There's a huge gap between demand and supply. The demand is continuing to grow, and supply is where the challenge is."
Singh said during the past four years, corporate rates have climbed between 25 and 35 percent in some markets, according to HRS data. Year-over-year rate increases are averaging 4 percent to 4.5 percent, a trend Singh said is expected to continue into 2027.
According to CoStar data, average daily rates since May 2023 have risen by double-digit percentages in Delhi (45 percent), Bangalore (40 percent), Chennai (33 percent), Pune (31 percent) and Mumbai (23 percent).
Singh said the rate increases have been steep, but the bigger issue facing corporate buyers in these markets has been bookability.
"Occupancy is sitting at a pretty significantly high percentage across the key markets," Singh said, "which are dominated by leisure, by business travel, by the retail walk-ins, et cetera."
In Mumbai, occupancy has sat between 78.5 percent and 79.8 percent for four straight years, according to CoStar. In Delhi, occupancy has climbed steadily year over year, going from 69.7 percent in May 2023 to 77.9 percent in May 2026.
Why India Is Booming
Part of the travel surge in India was initially fueled by its ability to attract business away from China post-pandemic—a trend noted by BTN when it named India Prime Minister Narendra Modi among its Top 25 Most Influential of 2023. That drove international inbound business travel to the market at levels not seen prior to 2020.
At the same time, India is experiencing rapid expansion of its middle class. According to Deloitte's August 2025 India economic outlook, the country is expected to add around 75 million middle-income and 25 million rich and affluent households by 2030. The combined segments will account for 56 percent of India's total population.
"All these [South and Southeast Asia] countries with new generational wealth being built up will continue to travel—that is what they're aspiring to do," Satya Anand, Marriott International group president of U.S., Canada and the Caribbean and Latin America, said during a panel discussion at the NYU International Hospitality Investment Forum in June. "Previously they would travel maybe one time a year overseas. Today they're taking five trips, sometimes 10 trips."
According to Phocuswright data, India's travel market grew by 11 percent in U.S. dollars in 2024, reaching $41.5 billion. That same year, Indians took 2.6 billion domestic trips and 30.8 million outbound journeys.
Hilton CEO Christopher Nassetta said the country's improved physical and financial infrastructure has made it easier to travel and more attractive to invest.
"When you go to India you're seeing new airports, tons of highways, rail—it's all really happening," Nassetta said during a panel at the NYU conference in June. "The capital markets reform has been significant enough where there's a very significant amount of inbound money that's interested in investing there from all over the world."
India's investment appeal is only growing, according to Deloitte's 2026 commercial real estate outlook, which surveyed850 C-level executives at commercial real estate owners and investment companies. The share of survey respondents that named India a top opportunity market climbed from 9 percent in the 2025 outlook to 13 percent in the 2026 outlook, putting it in second place globally behind the United States. More than 85 percent of European and Asia-Pacific respondents said they expect to increase their real estate investment in India over the next 18 months.
"I'm making a bet: In 20 years India will be the largest market on this planet, way bigger than China," said Accor chairman and CEO Sébastien Bazin during the same panel discussion with Nassetta in June.
Why Supply Can't Keep Up
India is a market with far less hotel brand saturation than other large, populous countries, particularly China and other Southeast Asian economies. Prior to the pandemic, India's three most mature travel markets—Delhi, Mumbai and Bangalore—would have had to combine their branded hotel supply to match Singapore's, according to HVS Anarock.
That diminished brand penetration is starting to shift. Last year, brand signings reached a new high of approximately 64,120 keys across 586 properties, according to HVS Anarock, and new openings totaled approximately 14,200 rooms across 176 properties.
"The sustained pace of signings reflects continued investor confidence in India’s long-term hospitality story and growing conviction around the sector’s fundamentals," according to the HVS Anarock India Hospitality Industry Overview 2025.
However, the HVS Anarock overview also points to a complex operating environment and flags governmental policy clarity, ease-of-doing-business reforms, destination development and infrastructure creation as must-haves to support the next phase of hotel sector growth in India.
IHG Hotels & Resorts CEO Elie Maalouf said during the NYU executive panel in June that although he sees the potential of India, he's more realistic about the challenges there, particularly compared to developing properties in China.
"Land cost is expensive, financing cost is expensive, regulations are tight, it takes years to build a hotel," Maalouf said. "China, interest rates are very low, cost of capital available, construction's very fast. …We've been in India 50 years, we have 60 hotels now, maybe another 70 in the pipeline. It took us much less time to advance in China."
FCM global hotel practice lead Rachel Newns said she's heard anecdotally from hotel partners that despite the desire to grow in India, it's challenging to find space to build new hotels.
"Some of these locations are already heavily populated," Newns said. "It's very difficult to find the right areas to build capacity."
Newns said that business travelers, particularly those traveling inbound internationally to India, tend to gravitate toward properties featuring known brands, which makes the relative lack of branded properties in India an added supply challenge.
"There are certain hotels and hotel brands that are particularly popular with travelers that are running at incredibly high occupancy levels," Newns said. That popularity drives up rates, she added.
How Buyers Are Adapting
Singh said more and more properties branded by the major chains in India have been pushing dynamic rates and refusing to offer static rates.
One of the ways buyers are responding is by drilling down on last room availability and rejecting or moving away from properties that are only offering non-LRA rates because buyers "don't feel they have any control over their spend."
Corporates are also trading down a tier, moving from a five-star property to a four-star or lower, according to Singh.
"These four-star hotels are trying to really improve their service and customize it for corporates to make sure they're able to offer premium service at a four-star pricing," Singh said.
In some cases, Singh said, companies are forming their own corporate residences, typically called guest houses in India, that act as hotels in high-volume, high-occupancy markets to accommodate company travelers.
Such properties are owned by the company, have their own property management systems that connect into a corporate's online booking engine and can be booked like any other hotel.
"These corporate-owned accommodations are hitting 95 to 98 percent occupancy, and they take great pride in running these effectively," Singh said. "If you have, for example, 800 rooms at 98 percent occupancy, the major chunk of your [hotel] requirement is taken care of in that city for that particular day."
Additionally, local aggregators like Oyo, Bloom Hotels and FabHotels are finding their way into some corporate hotel programs.
"They're designed to cater to the corporate traveler," Singh said. "They're very functional. ... It's a bare minimum, but very functional, clinical and good for the corporate traveler for one night, two nights, pretty comfortable."
As for the brand problem in India, Singh said that while "absolutely there's a significant volume that goes into the global chains," often business travelers become willing to shift to local brands after they've tried them or received a recommendation from colleagues.