India’s Tourism & Hospitality Sector: Poised for Unprecedented Growth through 2028

A Domestically Fuelled Tourism Surge

India’s tourism growth is being powered by domestic demand. Visitor numbers are set to escalate from 2.5 billion in 2024 to 5.2 billion by 2030, reflecting a robust CAGR of 13.4%, per the latest sector report .
Simultaneously, spending by tourists is projected to nearly triple (to ₹33.95 trillion) by 2034, driven by infrastructure expansion across air, rail, and roads .

Skyrocketing Domestic Air Travel

India’s domestic air traffic is on an upswing—projected to rise from 307 million passengers in FY24 to 693 million by FY30 .
This travel expansion is complemented by increasing connectivity and affordability, as low-cost carriers significantly reduce fares.

Hospitality Supply Lags Behind Soaring Demand

As of March 31, 2024, India had approximately 3.4 million hotel rooms, but only 11% (≈375,000 keys) belong to organized, branded, or high-quality independent properties .
The luxury segment is even narrower, standing at just 17% of that organized supply—roughly 29,000 keys across 230 hotels .
Strong demand sees luxury hotel occupancy at 60–70%, while TRevPAR outpaces upscale by 117%, and midscale by 298% .

Weddings, MICE, and F&B: Key Revenue Drivers

• The weddings and MICE segments are fueling hospitality demand. CAIT reports 3.8 million weddings held between Nov 23 and Dec 15, 2023, generating ₹4.74 lakh crore, a 26% YoY jump 

• In luxury hotels, Food & Beverage (F&B) revenue per occupied room is nearly 1.9× the industry average 

• Together, these segments are vital profit levers for hotels and a must‑watch for corporate travel planners, luxury event facilitators, and wedding travel agents alike.
  
  

Accelerated Recovery in International Tourism

India’s international tourism segment is also rebounding with vigor:

• Foreign tourist spending reached ₹3.1 trillion in 2024, exceeding 2019 levels by 9%, with 20 million foreign tourist arrivals 

• Meanwhile, domestic visitor spending hit ₹15.5 trillion in 2024 (up 22% over 2019), and is forecast to touch ₹16.8 trillion in 2025

• Overall, the sector's GDP contribution stood at ₹20.9 trillion (~US$249.3B) in 2024 (about 6.6% India’s GDP), expected to grow to ₹22.5 trillion (~US$268.7B) in 2025 
  
  

Hospitality Outlook: Revenue Growth Ahead

The hotel sector is showing strong Year-over-Year (YoY) revenue growth of 9–11% in FY25, following a 12–14% RevPAR (revenue per available room) increase in FY24 .
Average room rates are expected to lift from ₹7,200‑7,400 to ₹7,700‑7,900, with RevPAR rising to ₹4,800‑5,000

Takeaways for B2B Travel & Aviation Stakeholders

• Travel Agents & Consolidators: Focus on curating domestic and destination wedding packages, especially in luxury markets where F&B and MICE drive revenue.

• Corporate Travel Planners: Anticipate growing demand for luxury accommodations, event spaces, and seamless multi-modal (air + rail + road) connectivity.

• Airlines & Airline Professionals: With domestic air travel nearly doubling by FY30, there’s ample opportunity in collaboration with luxury and experiential hotel segments and MICE travel facilitators.

• Hospitality Investors & Developers: The glaring supply gap in branded and luxury hotel segments signals fertile ground for development, particularly around key domestic and international hubs.
  
  

Conclusion

India’s tourism and hospitality landscape is entering a high-growth phase—with domestic travel fueling record demands, infrastructure keeping pace, and premium segments outperforming expectations. For B2B professionals across travel, hospitality, and aviation, this means a wealth of opportunity: from crafting immersive wedding and MICE experiences to bridging the luxury supply gap and optimizing flight packages. The next few years will define how well the sector transforms opportunity into sustainable growth.

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