India’s hospitality industry witnessed a strong rebound in February 2026, driven by a combination of wedding season demand and a revival in corporate travel, according to a recent HVS Anarock report.
Average room rates (ARRs) rose sharply by 12–14% year-on-year to ₹11,300–11,500, marking the strongest growth in nearly a year. The uptick was supported by an extended wedding season, alongside robust demand from corporate and MICE (meetings, incentives, conferences and exhibitions) segments, further boosted by large-scale events.
Occupancy levels also climbed to post-pandemic highs of 73–75%, resulting in a 15–17% increase in revenue per available room (RevPAR). Unlike January, when growth trends varied across cities, February saw broad-based double-digit ARR growth across most key markets.
New Delhi led the surge, with room rates exceeding ₹18,500, up 15–20% year-on-year, aided by major events such as the India AI Impact Summit 2026. Mumbai followed with ARRs above ₹15,500, while cities such as Ahmedabad and Hyderabad recorded the sharpest rate expansions.
Occupancy remained strong across major cities, with Mumbai reporting the highest levels at 86–88%, closely followed by New Delhi and Chennai. Goa also saw a recovery, reversing earlier declines, although Bengaluru experienced a marginal drop in occupancy.
Despite the strong February performance, industry outlook for March and the fourth quarter of FY26 appears subdued. Analysts attribute this to geopolitical tensions in the Middle East, which have affected inbound travel and dampened overall sentiment. As a result, growth is expected to be driven primarily by room rate increases, with occupancy levels under pressure.
On the supply side, hotel signings have surged, particularly in Tier-3 and Tier-4 cities, while new openings remain concentrated in larger urban centres.
While near-term challenges persist, the sector’s medium-term outlook remains positive, supported by structural demand drivers and continued expansion beyond core markets.
