Occupancy across India's organized hotel sector climbed to 64.1% in 2025, up from 42% in 2021, and average daily rate growth has pushed RevPAR above pre-pandemic levels, according to a new CBRE South Asia report that ties the recovery directly to the country's expanding expressway and rail networks.

The report, "Reimagining Indian Tourism: Unlocking the Next Wave of Growth," was released at the Associated Chambers of Commerce & Industry of India's National Tourism Conclave in New Delhi. It argues that new road and rail corridors are converting once-separate destinations into combined itineraries — extending trip length and shifting hotel demand into markets that previously had little branded supply.

"The next phase of tourism growth will require us to look beyond increasing tourist numbers and focus on building new destinations, creating new experiences and improving destination management," said Gajendra Singh Shekhawat, India's Union tourism minister.

Which corridors are driving the change?

The report maps specific expressways to specific destination clusters:

• The Delhi-Mumbai Expressway links Jaipur, Ranthambore, Sariska and Ahmedabad.
• The Samruddhi Mahamarg connects Shirdi, Nashik, Trimbakeshwar and the Ajanta and Ellora caves.
• The Bundelkhand Expressway groups Khajuraho, Orchha, Chitrakoot and Jansi into one circuit.
• Upcoming corridors — the Char Dham Mahamarg, Shaktipeeth Expressway and Somnath-Dwarka Expressway — could extend the network further.

Rail adds another layer. Tourism circuits, luxury heritage journeys, panoramic coaches and high-speed rail development, concentrated along pilgrimage corridors, are giving train travel a bigger role in itinerary planning.

Anshuman Magazine, CBRE chairman and CEO for India, South-East Asia, Middle East and Africa, said new expressways, rail routes and regional airports have made more destinations accessible than five years ago. "The harder part sits at the destination itself: rooms, trained people and the right assets for each type of traveler," Magazine said.

Where is hotel supply responding?

Uttar Pradesh illustrates the pattern. Hotel inventory in the state grew 18% since 2021, and the midscale share of that supply rose from 15% to 19%, driven by pilgrimage and religious tourism in destinations such as Ayodhya and Varanasi.

City-level performance varies widely. Goa runs at 75–80% occupancy and Jaipur at 62–67%, while Bengaluru posted RevPAR growth of 20–25% year over year.

The recovery is not a luxury-only story. Economy, upper midscale and midscale hotels account for nearly 60% of branded room stock, giving mid-market operators the largest share of the organized market.

Where is investment heading?

The report identifies growth segments with distinct real estate needs: spiritual travel, MICE, destination weddings, wellness, medical travel, cruise tourism, rural tourism and wildlife lodges.

Wildlife lodging stands out as constrained supply meets strong demand. Branded operators are entering markets near reserves such as Ranthambore and Satpura, where regulations near reserve boundaries limit new development.

MICE presents another supply gap. Growing convention and event activity in emerging cities could generate demand for additional room inventory.

Sustainability is also shaping asset design. New resorts are adopting solar power, rainwater harvesting, local materials and smaller footprints, while green hotels, eco-lodges and low-carbon travel gain traction with investors and travelers.

The pipeline points to sustained expansion: a separate CBRE report projects India's listed hotel operators will add more than 70,000 rooms by 2030.