India’s hospitality industry has renewed its call for policy reforms to accelerate branded hotel development, warning that the country’s accommodation capacity is falling well short of demand even as domestic tourism grows strongly. Industry leaders speaking at a hospitality-focused session of the Federation of Associations in Indian Tourism & Hospitality’s (FAITH) conclave in New Delhi said granting industry status to hospitality, extending infrastructure lending benefits and easing the cost of doing business are critical to unlocking investment.
K B Kachru, president of the Hotel Association of India (HAI), said the scale of the shortfall is stark: “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.”
Why Is India’s Branded Hotel Supply Falling Behind Demand?
India’s roughly 200,000 branded hotel rooms compare unfavourably against markets many times smaller in population, according to HAI’s Kachru, who argues that closing the gap requires substantial domestic and foreign investment that in turn depends on policy support. He stressed that the government must eliminate friction or bottlenecks preventing capital from flowing into the hotel sector, treating it as vital infrastructure rather than a discretionary consumer business.
What Reforms Is the Hospitality Industry Asking For?
Mandeep Lamba, president and CEO for South Asia at HVS Anarock, said the industry’s central lobbying ask is to bring hospitality sector lending under infrastructure lending classification. “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,” he said, adding that supply is needed across guest houses and economy hotels, not just five-star properties, given the boom in domestic and religious tourism.
Industry Reaction and Expert Commentary
Jyotsna Suri, chairperson and managing director of The LaLiT Suri Hospitality Group, pointed to workforce development as a parallel structural challenge facing the industry. “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,” she said, underscoring that supply reforms alone will not close India’s hospitality gap without matching investment in skilled talent.
What Happens Next?
Industry associations are expected to continue pressing the government for infrastructure-status lending and eased regulatory friction in the months following the FAITH conclave, with the outcome likely to shape how quickly branded hotel inventory can expand beyond metro markets into tier-2 and tier-3 cities and religious tourism corridors. Investors and hotel operators will be watching for any policy announcements on infrastructure lending status as a signal of how seriously the government intends to address the sector’s financing constraints.
Frequently Asked Questions
How many branded hotel rooms does India currently have?
India has close to 200,000 branded hotel rooms, a figure industry leaders say is far below what is required given the size of the country and its tourism growth.
What is the hospitality industry’s top policy ask from the government?
The industry’s central ask is to classify hospitality sector lending as infrastructure lending, giving hotel developers access to affordable, long-term financing for capital-intensive projects.
Who spoke about hotel supply reforms at the FAITH conclave?
K B Kachru of the Hotel Association of India, Mandeep Lamba of HVS Anarock, and Jyotsna Suri of The LaLiT Suri Hospitality Group all spoke about the need for policy and financing reforms.
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