India’s Hospitality Sector to Need 125M Sq Ft Space by 2035: CBRE

India’s organized hospitality industry is projected to demand an additional 120 to 125 million square feet of real estate by 2035, according to a recent analysis by CBRE, a leading real estate consultancy. This expansion reflects the sector’s response to surging travel needs from both domestic and international travelers.

The forecasted increase in space corresponds to the creation of roughly 190,000 to 210,000 new hotel rooms nationwide over the next decade. This growth will span a range of hotel categories, from budget and midscale options to upper-upscale and luxury properties. Factors such as business travel, leisure tourism, and experience-centric journeys are driving this broad-based demand.

CBRE’s report, titled Beyond Core: A 2035 View of India’s Alternate Sectors — Part I, also notes that the hospitality real estate sector attracted approximately $905 million in investments between 2024 and mid-2026. This inflow signals growing confidence from investors seeking opportunities in India’s expanding travel and tourism market.

While metro cities remain important, the sector’s expansion is increasingly visible beyond traditional urban centers. Gateway cities, which currently hold about 35 percent of branded hotel inventory, still generate around half of the sector’s revenue. This strong performance is supported by corporate travel, meetings, incentives, conferences, exhibitions (MICE), and transit-related demand.

Anshuman Magazine, Chairman and CEO for India, South-East Asia, Middle East, and Africa at CBRE, remarked, “India’s hospitality opportunity is becoming increasingly diverse, with growth extending beyond traditional hotel markets and formats. As business, leisure and experience-led travel evolve, developers and operators are taking a more market-led approach to identifying opportunities.” He added that the industry’s focus is shifting from merely increasing room numbers to creating distinct hospitality assets that align with evolving traveler preferences and offer sustainable long-term value.

The report highlights leisure, cultural, and spiritual destinations as emerging hubs for resort-based and experience-driven hotel formats. This trend points to scalable expansion opportunities outside conventional urban hotel markets, tapping into India’s rich heritage and diverse travel motivations.

Investor interest is also evolving. The report indicates a growing preference for platform-level investments, strategic joint ventures, and assets that generate steady income streams. Such approaches help spread risk and improve capital efficiency.

Hotel operators are increasingly adopting management contracts and franchise partnerships. These arrangements enable expansion with lighter capital commitments, allowing brands to grow their footprint more nimbly. This strategy is particularly helpful for entering new markets or scaling quickly without heavy upfront costs.

CBRE’s report further identifies selective premiumization in luxury, lifestyle, and premium resort segments as an important avenue for stronger pricing power. Enhanced offerings in these categories cater to changing consumer tastes and can command higher average daily rates (ADR).

Rami Kaushal, Managing Director of Consulting and Valuation Services for India, Middle East, and Africa at CBRE, commented, “Operators are increasingly pursuing strategic premiumization across luxury, lifestyle and resort formats to capture evolving traveler preferences. Supported by healthy demand fundamentals, this trend is expected to strengthen pricing power and support ADR growth across segments.”

The hospitality sector’s growth trajectory in India aligns with broader trends in travel and tourism. Rising disposable incomes, improved connectivity, and increasing domestic travel are fueling demand for diverse lodging options. At the same time, global tourism trends favor unique experiences and destination-specific hospitality, which India’s varied cultural landscape can support.

As the sector evolves, developers and investors will need to balance expansion with innovation. Creating properties that resonate with new traveler expectations, while ensuring financial viability, will be key to sustaining growth. CBRE’s insights provide a roadmap for stakeholders aiming to navigate India’s dynamic hospitality market through 2035.