India Redefines Hospitality Growth in the APAC Region

FREMONT, CA: India is rapidly emerging as a key driver of growth in the Asia Pacific (APAC) hospitality sector, as the region is transitioning from recovery to stabilization in 2025, with capital flows focusing on high-liquidity hotel markets. While traditional investment hotspots continue to attract capital, India and Southeast Asia are gaining momentum as key demand drivers. Indian travelers are playing a pivotal role in fueling tourism across the APAC region, thanks to a growing middle class, higher disposable incomes, and a strong appetite for experience-led travel.

As a result, Indian outbound tourists are emerging as a dependable, year-round customer base, helping sustain strong room rates and contributing to a structural shift in hospitality demand. These changing dynamics are not only boosting volumes but also supporting premium pricing across multiple markets. The country is experiencing robust domestic growth, alongside its increasing influence as a source of outbound travelers. Sectors such as luxury, lifestyle, and MICE (Meetings, Incentives, Conferences, and Exhibitions) are all gaining traction domestically.

Despite tighter liquidity in broader capital markets, long-term investor confidence in Indian hospitality remains strong, with valuations underpinned by future growth rather than short-term transactional yields. A key growth area is spiritual tourism, which is drawing millions of travelers to historic and culturally significant towns across the country. This evolving trend is opening new doors for hospitality development beyond conventional tourist corridors.

Domestic Travel and Spiritual Tourism Transform Indian Hospitality

Government-backed initiatives, ranging from enhanced transportation networks, such as new highways and improved rail connectivity, to improved civic amenities like better waste management and public spaces, are unlocking the potential of lesser-known towns and cities. These efforts are enabling a new wave of hospitality infrastructure, especially in mid-range and premium categories, to cater to both value-conscious and experience-driven travelers. Many hotel operators are moving beyond basic services to offer full-scale accommodations with modern amenities designed to meet the needs of multi-generational families, solo pilgrims, and spiritual groups. The emphasis is shifting towards quality, convenience, and accessibility, which in turn is spurring investor interest in these non-metropolitan locations.

On the outbound front, Indian travelers are not only exploring the world; they are also influencing and shaping hospitality trends across the APAC region. Their diverse travel patterns, from leisure to wedding and celebration-based travel, corporate visits, and MICE-related events, are redefining the concept of hospitality. These travelers, with their demand for comprehensive hospitality solutions, extended stays, custom services, and high-end facilities, are prompting APAC hospitality providers to tailor their offerings to Indian preferences, from cuisine to event management. The multifaceted patterns of Indian travel are transforming the APAC region's perception of its customer base, placing Indian tourists at the center of regional hospitality strategies.

Investors Shift Toward Value-Driven and Experience-Led Strategies

Hotel performance across APAC remained strong in the first quarter of 2025, underpinned by increasing occupancy and growth in Average Daily Room Rates (ADR). Revenue per Available Room (RevPAR) rose by 2.1 percent year-on-year, marking a notable improvement from previous periods. India's key metropolitan areas and emerging cities are contributing significantly to this rate-driven growth, thanks to rising demand and improved property positioning.

While overall transaction volumes in the region have moderated, the resilience of investment sentiment is a reassuring sign. Rising construction costs across APAC are also contributing to a more measured supply pipeline, encouraging investors to maximize the potential of existing assets rather than pursue new builds. This shift in strategy aligns with India's strengths as a dual market, both as a growing source of outbound demand and as a vibrant domestic destination.

Investors are increasingly recognizing the potential of Indian assets that offer strategic location advantages, cultural resonance, or strong local demand fundamentals. As India cements its role in shaping the future of APAC hospitality, the focus will continue to move toward experience-led, operationally sound, and future-ready investments. This positive momentum and increasing investor interest are indicative of the growing opportunities in the market.