Supply growth picking up pace gradually in the recent quarters. However, it continues to lag the demand, and the trend is likely to continue for next 2-3 years. New supply additions are largely being focused on Tier2/3 cities, airport hotels and spiritual destinations with preference towards asset-light model of expansion. NCR, Mumbai and Bengaluru to contribute to around 54% of supply pipeline over the medium term among the major cities. Favourable demand and better pricing power to support revenue and earnings growth for the premium hotel segment in FY2026 and FY2027.

• The Indian hospitality industry continues its strong run amid the persistent demand-supply imbalances
  
• Airport hotels garner a lot of attention in major gateway cities with over 2,000 premium keys in the pipeline
  

Source: ICRA Research; ICRA considers Luxury, Upscale and Upper-Upscale as the premium segment (4-Star and above)