India's hospitality sector expected to clock 8 pc growth in FY26: Report

India's hospitality sector is expected to post a revenue growth of 6-8 percent in FY2026 on the high base recorded after three years of double-digit revenue expansion seen by the industry over FY2023 to FY2025, according to an ICRA report released on Monday (9 June).

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ICRA estimates pan-India premium hotel occupancy to hold at 72-74 percent in FY2026, slightly higher than the 70-72 percent levels witnessed in FY2024 and FY2025. The average room rates (ARRs) for premium hotels are projected to rise to Rs 8,200-8,500 in FY2026, after a healthy Rs 8,000-8,200 in FY2025 amid lagging supply additions and several hotels undergoing renovation, refurbishment, and upgradation.

Jitin Makkar, Senior Vice President ICRA Limited, said: "After three years of strong demand, driven by favorable domestic leisure travel, demand from meetings, incentives, conferences and exhibitions (MICE), including weddings, and business travel, the growth in the Indian hospitality sector is forecast to normalize at 6-8 percent year-on-year in FY2026."