India’s luxury hospitality sector is at an inflexion point shaped by evolving guest expectations, digital transformation, and sustainability imperatives, the market was valued at INR 1,837 billion in 2022 and is projected to reach INR 3,370 billion by 2028 at a CAGR of 8.73%.   

The luxury hospitality sector is experiencing strong growth, fueled by affluent travellers who prioritize seamless, personalized, and eco-conscious experiences. To remain competitive, luxury hotels must integrate advanced technology, embed sustainability at their core, and elevate high-touch service. Those that successfully adapt will not only meet evolving expectations but also new avenues for premium pricing, customer loyalty, and long-term differentiation. 

How is Luxury Hospitality Evolving in India? 

• Luxury is no longer defined by opulence alone, Heritage and business hotels now command 40% of the market as travellers seek culturally immersive, experience-driven stays.   
• Digitalization is accelerating this shift with nearly 67% of luxury bookings in FY22 being made online, with platforms like MakeMyTrip witnessing a 150% surge in high-end hotel reservations. Additionally, AI-powered concierge services, smart room automation, and blockchain-based loyalty programs are reshaping guest interactions and enhancing operational efficiency.   
• Sustainability is now a competitive differentiator, leading brands including ITC Hotels and IHCL, are setting new benchmarks with LEED-certified buildings, zero-waste policies, and solar-powered operations. As the majority of guests expect responsible luxury, compelling hotels to embed ESG principles into their core strategies.   

 Why Is Technology Reshaping Luxury Hospitality in India? 

• AI and IoT are redefining personalization as AI-driven room customization, facial recognition check-ins, and predictive analytics enable hyper-personalized experiences are elevating guest satisfaction. Meanwhile, blockchain-backed loyalty programs offer enhanced security and transparency, creating deeper engagement.   
• The mid-range luxury segment, holding 15% of the market, is emerging as an attractive investment, catering to aspirational travellers who seek premium experiences without ultra-luxury pricing.   

 Where Are the Biggest Growth Opportunities in Hospitality? 

• India’s robust tourism sector is fuelling demand for the luxury hotel industry. Domestic travel in the country reached 1,731 million in 2022, its highest since 2019, while foreign arrivals surged to 6.19 million. This rebound is creating opportunities in business travel, destination weddings, and experiential tourism.   

• MICE (Meetings, Incentives, Conferences, and Exhibitions) growth is rising corporate events which enhance demand for premium business hotels, accounting for 60% of the market. Further, destination weddings in palatial venues in Rajasthan, Goa, and Udaipur are seeing a surge in destination wedding bookings.   
• With urbanization expected to reach 38% by 2025, demand for luxury accommodations in metro hubs will continue to grow. Moreover, India’s rising disposable incomes, up from INR 152.5 Lakh Cr in 2018 to INR 205.6 Lakh Cr in 2022, signal greater spending power for high-end travel.   

India’s luxury hotel sector is undergoing a paradigm shift, where innovation, sustainability, and exceptional service will drive future growth. Operators that embrace data-driven personalization, ESG commitments, and evolving guest preferences will define the next era of luxury.   

For investors, the opportunity is clear, capitalize on the digital transformation, tap into India’s expanding affluent class, and refine service strategies to align with market shifts. The future of luxury hospitality is not just about grandeur; it is about creating seamless, sustainable, and technology-enhanced experiences that resonate with the next generation of high-net-worth travellers.