India’s hospitality industry has renewed its call for policy reforms to accelerate the development of branded hotels, highlighting that the country’s accommodation capacity is falling short of demand at a time when domestic tourism is witnessing strong growth.
Speaking during a hospitality-focused session at the Federation of Associations in Indian Tourism & Hospitality’s (FAITH) conclave, held in New Delhi from July 16 to 17, industry leaders said granting industry status, extending infrastructure lending benefits and improving the ease of doing business are critical to unlocking investment and expanding branded hotel inventory across the country.
K B Kachru, president of the Hotel Association of India (HAI), said: “The number of branded hotels in India falls far below what is required. India today has close to 200,000 branded rooms whereas a single US state has more branded hotel rooms than the whole of India combined. That is deeply concerning.”
He stressed that developing the required hotel capacity would require substantial domestic and foreign investment, which in turn depends on policy support.
“To attract large-scale capital, investors must be incentivised through policy measures and the ease of doing business needs to be improved. The government must eliminate any friction or bottlenecks preventing or delaying capital infusion into the hotel sector, treating it as vital infrastructure,” he highlighted.
Industry experts noted that India’s rapidly growing tourism market, fuelled by the domestic segment, requires accommodation across every category rather than only luxury hotels.
Mandeep Lamba, president and CEO, South Asia, HVS Anarock, stated: “We have low penetration of branded hotel rooms in the country and investment is also limited at this point. The biggest issue we have been lobbying with the government is to bring hospitality sector lending under infrastructure lending. This will provide access to affordable long-term financing which is essential for expanding supply for a capital-intensive activity like building hotels.”
“It is not just five-star hotels that we build as an industry but also guest houses and economy hotels. Domestic tourism including the religious segment is booming and all these travellers do not stay in luxury hotels. We need branded hotels across every category,” added Lamba.
Beyond infrastructure and financing, industry leaders also highlighted the need to address structural challenges related to workforce development.
Jyotsna Suri, chairperson and managing director of The LaLiT Suri Hospitality Group, said: “Looking ahead, I hope to see a narrower gap between branded and non-branded hotel inventory in India. Attracting the right talent into the hospitality sector is another key challenge that the industry is grappling with.”
