Weddings are coming. India’s hotels are ready.

India's hotel industry is poised for stronger growth in the second half of FY27, according to PhillipCapital's sector report. The industry's resilience was evident even as geopolitical disruptions persisted, with occupancy rising and average room rates increasing. The report predicts that demand for hotel services will be bolstered by a higher wedding calendar, improved MICE activity, and a seasonal uptick in international travel from October.

Despite limited new hotel construction in key markets, the combination of rising demand and limited supply is expected to support room rates and RevPAR. During the first quarter of FY27, domestic leisure demand outperformed business travel, with Rajasthan and Goa recording significant RevPAR growth in Indian and luxury hotels. Corporate travel, however, remained subdued due to geopolitical uncertainties and tighter budgets.

International travel was impacted by conflicts in the West Asia region. While domestic traffic growth slowed to 1.2 per cent year-on-year, international traffic declined by around 10.2 per cent. Nonetheless, the monthly trend showed improvement as the quarter advanced, with domestic passenger growth increasing by 7.7 per cent in May, before stabilizing at a 1.2 per cent decline in June.