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.

“As per HVS ANAROCK, ARRs are forecast to increase to ₹9,400 to ₹9,700, with occupancies of around 67 to 70 per cent, resulting in a projected RevPAR of approximately ₹6,300 to ₹6,800,” said Mandeep S. Lamba, president and chief executive officer (South Asia), HVS Anarock. “This growth will be driven by sustained domestic travel demand, growing corporate travel supported by office space absorption in key metros, improving international arrivals, and a still-disciplined supply pipeline that continues to support pricing power. The stabilisation of marquee convention centres such as Jio World Convention Centre, Yashobhoomi Convention Centre, and Bharat Mandapam is also helping draw incremental MICE demand, complemented by the growing scale of sports- and live entertainment-led travel.”

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 rupee terms, room rates for branded hotels are at an all-time high. However, it is important to recognise that, when viewed in dollar terms, current rates remain below the peaks achieved in 2007 and 2008,” said Thadani, adding that the growing footprint in religious and spiritual centres in the country is another factor that will help boost average room rates in the range of five to six per cent.

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.

“The primary driver will be our entry into the upscale lifestyle segment with the launch of our new brand, ICONIQA. Our flagship property at Mumbai T2, which is already ranking among the top hotels in the city, is expected to command ADRs in the range of Rs 12,000 to Rs 16,000, significantly lifting the group’s overall RevPAR,” said Arjun Baljee, founder of ICONIQA Hotel and president, Royal Orchid Hotels. “We are also integrating AI-driven dynamic pricing to optimise yields in real time, ensuring we capture the maximum premium during high-demand periods like the wedding and convention seasons.”

Baljee emphasised that the company may not see a widespread decline in room rates, but rates are likely to normalise in select tier-I markets and saturated leisure destinations where competition has intensified and the base effect is high.

“On the supply side, the sector has seen a record level of signings, with over 47,000 keys signed as of year-to-date November 2025, reflecting a 31 per cent increase over the same period last year. With demand continuing to broaden across geographies and travel purposes, the sector is steadily building scale, and the fundamentals for long-term growth remain firmly in place,” said Lamba.

Roshni Shekhar, Mumbai