Current biz travel growth could prompt hotels to adopt ‘more rooms’ strategy

Annual growth in business visits of around 19 per cent in 2024 outstrips a growth of around 11 per cent for leisure visits according to Tourism Economics.

Though business travel’s growth is expected to slow somewhat to around 17 per cent in 2025, the 2024 to 2030 period is expected to grow by around 50 per cent against a growth in leisure visits of a little under 30 per cent for the same period.

Significantly, business travellers are staying longer and spending more per trip. Such extended visits are partly thanks to the trend for ‘bleisure’ - the combining of business trips with extra days of leisure tourism that is fast catching up. In this respect, remote working has had a positive effect enabling travellers to be more flexible about working overseas around their leisure time. India is witnessing a boom in branded hotel room development, with 94,000 new rooms expected by 2028-29. Driven by rising travel demand, key players like IHCL, Marriott International and Radisson Hotel Group are rapidly expanding their portfolios, especially in tier 2 and 3 cities, focusing on quality and meeting the needs of a wide range of travelers. India’s hospitality sector is experiencing significant growth, with both Indian and global hotel chains expanding their footprints.

According to the data shared by hospitality consultancy firm Hotelivate, as of last month around 94,000 new branded hotel rooms are expected by 2028-29, adding to the existing 1.92 lakh rooms. Key players like Indian Hotels Company (IHCL), Marriott, Radisson, ITC Hotels, Lemon Tree, Hilton, Accor and Hyatt are driving this expansion.

IHCL, backed by Tata Group, leads with 17,354 rooms that it is set to open in the next three to four years. The company has also launched a ACCELERATE 2030 strategy to expand its portfolio to over 700 hotels by 2030, with revenue targets of Rs. 30,000 crore. Marriott International plans to open over 40 hotels, adding 6,500 rooms by 2028, while Radisson Hotel Group has a pipeline of 81 hotels with 7,985 rooms. ITC Hotels, currently with 140 hotels, aims to expand to 200 hotels by 2030, adding about 5,000 rooms. Lemon Tree Hotels plans to open 70 hotels, contributing 4,700 rooms in the next five years. Hilton has marked 2024 as a year of expansion, with a transformative deal to introduce 150 Spark by Hilton hotels, growing its portfolio to 200 properties. Accor, focusing on key cities like Jaipur and Bengaluru, continues to enhance its presence across India.

In 2023/24, the country’s hotel inventory grew significantly to 1,80,403 rooms, marking a 9.2 per cent year-on-year increase. This expansion was notable not only in major cities such as Mumbai, Bengaluru, and Delhi, but also in growing markets like Dehradun, Jaipur, and Navi Mumbai. Bengaluru remains the largest hotel market, with a substantial growth of 13.8 per cent (an addition of 897 rooms) over last year. This and the strong pipeline in other regions suggest a dynamic shift, driven by increased business travel, leisure tourism, and marquee events like the ICC Cricket World Cup and the G20 summit.

The year saw a broad-based increase across both metro cities and smaller, emerging markets, adding 15,231 new rooms to India’s total hotel inventory.

This year Mumbai overtook New Delhi to become the second largest hotel market adding 1,665 rooms to its inventory. New Delhi experienced a slower growth of 1.7 per cent, adding 259 rooms and reaching a total inventory of 15,118 rooms. With a larger development pipeline and active expansion plans, Mumbai is expected to further solidify its position in the coming years. Navi Mumbai recorded a 34.4 per cent increase, adding 420 rooms and bringing its total inventory to 1,642 rooms.

Emerging markets also witnessed substantial growth, with Dehradun posting an impressive 67.5 per cent increase by adding 498 rooms, and Jaipur growing by 18.1 per cent, adding 1,132 rooms, largely fuelled by rising leisure tourism and social M.I.C.E. demand. Goa, another popular leisure destination, recorded a 9.1 per cent rise, adding 771 rooms. Ahmedabad, benefiting from major events like the ICC Cricket World Cup and the G20 summit, grew by 7.9 per cent, contributing 343 additional rooms. Agra also saw notable expansion, with a 20.1 per cent increase adding 414 new rooms, bringing its total to 2,477.

The ‘other cities’ category, which comprises smaller and emerging destinations, saw a significant 14.3 per cent growth, contributing 7,130 new rooms. This widespread expansion indicates strong investor confidence and rising demand across multiple segments of the country’s hotel industry. Hyatt aims to nearly double its properties to 100 by 2029, with eight new hotels set to open by early next year. This expansion is driven by India’s booming travel sector and a growing demand for premium hospitality experiences.