*Hotel industry has quite a few good reasons to cheer about in 2026*
A premium hotel room costing Rs 17,000 was too much for a Mumbai resident who recently travelled to Bengaluru for a business trip. This is nothing unusual. In fact, hotel rates have been significantly high in the post-Covid period.
Hotel rates in Bengaluru, for example, have already increased by about 25-30 percent as the city is preparing to host Aero India 2025 and Invest Karnataka 2025 next month, noted Aditya Sanghi, Co-Founder & CEO, Hotelogix, a cloud-based hotel management system.
Shyam Kumar, General Manager of DoubleTree by Hilton Bengaluru Whitefield, also emphasised that 2025 looks like a promising year for the hospitality sector.
“With the shift from three-day to four-day work weeks, we expect a surge in travel demand. The increase in both domestic and international traffic is likely to drive hotel rates up by 10-12 percent, with peak periods, like the Aero Show, pushing growth to 20 percent,” Kumar said.
*_Premium and budget room rates_*
Last year, India's premium hotel room rates averaged between Rs 7,200 and Rs 7,400 per night, marking a 15 percent increase from the previous fiscal year, pointed out Dr Vikram Kamat, Chairman of the Vitskamats Group.
In the budget hotel category, it was around Rs 2,700-3,000 per night, a growth of around 7 percent. "The rates for 4-star hotels were in the range of Rs 3,700-Rs 4,400, including Tier II and III cities," he said.
Puneet Chhatwal, Managing Director and CEO of Indian Hotels Company Ltd (IHCL), also said that 2025 looks promising with high-profile events like the Aero Show and the World Audio-Visual & Entertainment Summit (WAVES), both in Bengaluru, and the Maha Kumbh in Prayagaraj, Uttar Pradesh, which will stimulate demand across various segments, including business and spiritual tourism.
*_'Luxury hotel rates in India still cheaper'_*
He said luxury hotel rates in India are still much lower than those around the world, which leaves a lot of room for rates to increase in the coming years.
“Rates in India are about $200 a night when it comes to luxury consumption. These rates are still a third of the hotels in New York. We have maintained our rates, even though India and the rest of south Asia have traditionally been occupancy-driven markets, where occupancy has been considered the correct metric," Chhatwal said.
Somesh Agarwal, Chairman and MD at Radisson Blu Palace Resort & Spa, Udaipur, highlighted that.
At Radisson Blu Palace Resort & Spa, Udaipur, a popular property among tourists, the average room rates for 2024 exceeded Rs 24,000, reflecting a 9 percent growth, compared to 2023, noted Agarwal.
"Udaipur, as a destination, sees higher demand on auspicious wedding dates and during the winter season, which is its peak period. Certain months in 2024 saw a growth of up to 20 percent, compared to the previous year. However, the second quarter (April-June) of CY2024 saw an all-time low due to the elections. Overall, the year balanced out, reflecting consistent demand trends," he said.
*_Average daily room rates_*
Ajay K Bakaya, Managing Director, Sarovar Hotels & Director, Louvre Hotels India, noted that the average daily rate reached Rs 5,500 last year.
For the Ramee Group, Mumbai, one of its key locations, saw a significant rise in hotel rates, with an increase of approximately 15 percent in 2024 over the previous year. "This growth aligns with the broader industry trend, where the average daily rate of hotels in India was around Rs 6,900 in fiscal year 2023," said Saurabh Gahoi, Senior Vice President.
In 2024, room rates during high-demand periods were, on average, 15-20 percent higher than standard rates, with some properties witnessing even greater spikes during festive seasons or significant local events, Gahoi added.