Domestic tourism, corporate travel may push room rates up in ’26

Hotel room rates are expected to rise up to six per cent to reach a range of %9,400 to X9,700 in 2026, driven by continued growth in domestic tourism, corporate travel, and demand continuing to outstrip supply across most markets in the country.

- ROSHNI SHEKHAR

In 2025, hotel room rates rose by seven per cent against 2024, according to Hotelivate, a hotel consulting firm.

While December was expected to carry this momentum forward, operational disruptions at IndiGo are likely to temper performance in the final month. Consequently, the industry is now projected to close the calendar year 2025 with occupancy levels in the range of 65 to 67 percent, and average room rates (ARRs) between %8,800 and %9,200, according to data shared by HVS Anarock.

Hotel room rates had hit record highs in 2024, and 2025 saw several events affecting the growth, from geopolitical issues to 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, ARR 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 76,300 to %6,800,” said Mandeep S Lamba, president and chief executive officer CEO (South Asia), HVS Anarock.