MORE WEALTH AMONG 1.5 billion people in India is driving a surge in new travelers with increased disposable income, creating significant demand for hotel rooms across the subcontinent, according to HotStats. This demand spans all asset classes, making it both easier and more challenging for developers and operators to determine what to build and operate.
HotStats' latest blog reveals that India’s hospitality sector is poised for growth due to its expanding economy, population and market performance.
“India mirrors China’s growth from 20 years ago, but a key difference emerged when India recently surpassed China as the world’s most populous nation,” wrote Tareq Bagaeen, HotStats’ senior consultant. “While China’s population is set to drop below one billion in the coming decades, India will continue growing, reaching 1.7 billion in 30 years. With a growing economy and strong market performance, India’s hospitality sector is primed for growth.”
India is closing the gap with Germany and Japan, achieving three consecutive years of 7 percent-plus GDP growth. The country is on track to become the world's third-largest economy, behind only the U.S. and China. However, India’s GDP per capita ranks 136th, significantly lower than the U.S., at 6th, and China, at 69th.
While India’s growth may not be immediately obvious, HotStats notes that, excluding the Maldives from South Asia's figures shows India outpacing its neighbors. The Maldives shows virtually no growth from 2023 to 2024.
Bagaeen stated that streamlining bureaucracies, improving financial transparency, and tightening policies will further stabilize this growth.
“The next 3-4 years look promising for hotel development and market performance, barring any global catastrophe,” he wrote.
In India, all segments are rising, not just groups, HotStats reported.
“With new inventory being rapidly developed, what’s the most lucrative hotel type to invest in? While luxury hotels lead, the gap compared to full-service hotels in 2024 is only 3 percent, much smaller than in other strong markets, which have seen gaps of 25 percent,” Bagaeen noted.
The article also pointed out rising expenses, with payroll per available room in South Asia up 4.7 percent over the past 12 months. Despite this, labor costs in India remain low compared to other Asian regions.
Over the last 24 months, India’s growth has been driven by rate increases as occupancy peaked. However, Bagaeen cautioned that this growth may not be sustainable, as rate ceilings will eventually be reached, as seen in Singapore and the Maldives in 2024.
Last week, India-based Oravel Stays, the parent company of the global travel technology company OYO, agreed to purchase G6 Hospitality, franchiser for the economy Motel 6 and Studio 6 brands, for $525 million from Blackstone Real Estate. The all-cash transaction is expected to close in the fourth quarter, subject to customary closing conditions.
Canadian traveler picks Pakistan’s hospitality over India’s
Pakistan Beats India in Hospitality, Says Canadian Vlogger
INDIA IS KNOWN for “Atithi Devo Bhava,” meaning "The guest is God," but some foreigners disagree. A Canadian man, when asked to choose between India and Pakistan for better hospitality, picked Pakistan without hesitation.
His brief interview with an Instagram user has since gone viral, Hindustan Times reported.
Instagram user @officialnamour, known for vox pop videos, recently asked Canadian traveler Nolan Saumure about "desi" hospitality. Saumure, a Canadian travel vlogger, has visited dozens of countries, including India, Pakistan, Sri Lanka, Mexico, Indonesia, the U.S. and Vietnam.
When asked, “India or Pakistan—which has better hospitality?” Saumure instantly replied, "Pakistan, obviously."
He explained that Indians often see foreigners as wealthy customers, while Pakistanis offer warm hospitality, inviting tourists into their homes and offering food.
"You go to India, and people just see you as a walking ATM," Saumure said. "You go to Pakistan, and people are like, 'Oh, come here, sit. Take this free food. Come sleep at my place.'"
The video has more than 4.4 million views and hundreds of comments, many agreeing with Saumure.
"As an African living in Dubai, I agree with him. Pakistanis are friendlier than Indians. Pakistanis see you as a friend, while Indians see you as a stranger," one user commented. Another added simply, “I agree (I’m Indian).”
“India gets a lot of tourists, so we’re used to it and have built an economy around them,” another Instagram user said. “Pakistan gets only a few hundred tourists a year, so seeing a foreigner is a big deal for them.”
Some criticized Saumure’s opinion, some with racial overtones.
“Why do whites expect princess treatment from Indians after stealing $45 trillion from India?” one user asked.
A whitepaper by the Confederation of Indian Industry and EY projects India’s tourism and hospitality sector will create 6.1 million jobs by 2034. It currently accounts for 8 percent of total employment.