BY SWATI AGARWAL,
OWNER,
RADISSON BLU PALACE RESORT & SPA UDAIPUR
UDAIPUR| 11 MARCH 2026
From the scenic Himalayan peaks in the north to the pristine backwaters of Kerala in the south, and from the ancient temples of Tamil Nadu to the forts and deserts of Rajasthan, India has always fascinated travelers from around the world with a pull that is hard to resist. Every state takes you through a journey of different languages, cuisines, and vibrant festivals, creating a melting pot of cultures. This diversity has always been India’s greatest tourism asset.
But beyond geography and culture lies something the country is world-renowned for: its reputation for exceptional hospitality. The principle of “Athithi Devo Bhava, or “The Guest is God,” sets India apart in the global travel and hospitality conversation. With the tourism and hospitality industry in the country expected to grow to USD 52 billion by FY27, this shining reputation for hospitality is being backed by economic intent. India is quickly becoming one of the most strategically important hospitality markets in the world, drawing cross-border investment, government funding, and the attention of global hospitality brands.
The Government’s push:
Over the past decade, the Indian government has made several efforts to boost the tourism and hospitality sector, aiming to make India a hub for cross-border hospitality growth. This has been well-reflected in the Union Budget 2026, where the government made its stance clear: tourism is a long-term economic driver.
Another aspect further reinforcing the government’s aim to boost the sector is the establishment of the National Institute of Hospitality, a dedicated institution aimed at professionalizing the workforce and closing the service quality gap that has historically held back India’s premium hospitality segment. For a sector that competes with some of the world’s most polished destinations, this kind of investment in human capital is long overdue and widely welcomed by the industry.
The 2026 budget also supports hotel development and hospitality capacity in medical tourism, mountain destinations, and heritage circuits, all of which require purpose-built accommodation and trained staff to operate at an international standard. GST reforms further ease the environment for hospitality businesses, with reduced tax burdens on hotel stays, dining, and hospitality services, making it more viable for operators to invest, price competitively, and grow.
What the numbers show:
The data gives an in-depth view. According to the World Travel and Tourism Council (WTTC), international visitor spend in India reached a record ₹3,10,000 crore (USD 36.05 billion) in 2024. That is not a figure that goes unnoticed by global hospitality investors.
On the hotel supply side, premium occupancy levels were projected to rise from 70-72% in FY25 to 72-74% in FY26, according to ICRA. Revenue growth in the premium segment is forecast at 7-9% in FY25 and 6-8% in FY26. Even overall, India’s hospitality sector is gearing up for a surge in revenue, estimated at 9-12% growth by 2025-26.
Moreover, with people gradually having more disposable income, alongside robust infrastructure investment from the government, India is presenting a strong case for cross-border hotel investment across multiple segments. And where better to begin than the developing regions?
Tier-II cities: Opening up a new investment frontier
India’s hospitality growth story was long concentrated in a few major metros and famous leisure destinations. This scenario is now changing, with Tier-2 cities emerging as high-potential markets, supported by improved regional air connectivity, upgraded highway infrastructure, and smart city development programmes.
Cities that haven’t been in the mainstream segment have attracted reputed hotel chains to launch their properties in that market. This is creating local jobs, modernising hospitality infrastructure in smaller urban centres, and giving travellers a wider range of choices. Moreover, for global operators in the tourism segment looking to grow in India, Tier-2 markets offer a combination of lower entry costs and genuine, long-run growth potential.
The new focus on destination circuits built around culture, spirituality, and nature is also opening regions that have not previously featured on mainstream tourism maps. This geographic diversification is central to India’s appeal for cross-border hospitality investment. And as the footprint of India’s hospitality sector expands, there arises a question of what travellers are looking for when they arrive.
Experiential travel: The new standard
The days when travellers’ itineraries consisted of just sightseeing and perhaps a few tourist activities are long gone. Today, travellers want to experience a slice of local life, traditions, and culture. A room with a view is no longer sufficient for a growing share of the market. People want to come away with a story, a memory, a sense of having genuinely engaged with a place.
Experiential travel has become one of the strongest trends in global hospitality heading into 2026. In India, it is playing out in particularly compelling ways. Stunning heritage hotels and palace stays, eco- resorts, farm stays, wellness retreats, and village tourism experiences are all growing much faster than the conventional hotel segment.
Fortunately, India’s geographic and cultural range makes it exceptionally well-placed to meet this demand. Medical tourism, adventure tourism, cruise tourism, and eco-tourism are all part of India’s expanding offering. The country’s Incredible India campaign has spent years presenting this diversity to the world, and the current investment climate is finally matching that ambition with real infrastructure and funding.
To cater to the growing demand of experiential travel and wellness tourism, leading hotel chains have responded with curated packages that bring premium in-property experiences alongside local discovery. Together, these shifts reflect a market that is maturing fast, with travellers’ expectations from hospitality providers increasing continuously.
India’s moment:
India has all the right ingredients to drive sustained hospitality growth: geographic diversity, world heritage sites, a rich cultural offering, niche tourism products across adventure, medical, eco, and spiritual categories, and a government that is now putting real capital behind the sector.
The combination of record international visitor spend, improving hotel occupancy projections, cross- border investment interest, GST reform, and a genuine experiential travel boom is creating conditions that few other markets can currently offer.
Global hospitality players are now treating India as a regional anchor, a base from which they can expand their footprint both within the country and across South Asia. The diversity India offers means that a single brand can operate across multiple distinct guest experiences within one country.
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