Bengaluru drives India’s branded hotel growth: Report

Bengaluru

Bengaluru has emerged as the top-performing Tier 1 city in India’s branded hotel market, driven by a surge in office space activity and corporate travel, according to the May 2025 HVS-ANAROCK Monitor Report. The city posted one of the highest year-on-year occupancy gains in April 2025—a rise of 6–8 percentage points—backed by strong business demand and renewed investor confidence.

Among Tier 1 cities, Bengaluru led the charge in branded hotel signings and openings, benefiting from the rebound in tech parks, return-to-office trends, and a sharp uptick in business travel. This resurgence comes as India’s broader hotel market continues to expand steadily, with branded hotel signings reaching 14,742 keys across 136 properties in the year-to-date period ending April 2025, up from 12,869 keys and 131 properties in the same period last year.

While Tier 3 and 4 cities captured the largest share of signings by keys (41.5%), Bengaluru helped Tier 1 cities contribute a strong 26.7%, maintaining their position as premium investment zones. Tier 2 cities followed closely with 31.6%, indicating healthy competition across regions.

Branded hotel openings also saw strong momentum, with 3,890 new keys added across 45 properties—up from 3,260 keys last year. Bengaluru played a critical role in Tier 1 openings, which accounted for 38.8% of the national total. Tier 2 and Tier 3/4 cities contributed 36% and 25.2%, respectively.

Bengaluru’s rise in occupancy is directly tied to the revival in office leasing, with IT and tech-driven corridors witnessing rising demand. Corporate bookings, conferences, and return of MICE (meetings, incentives, conferences, and exhibitions) events have further boosted hotel occupancies in the city.

At the national level, hotel occupancy stood at 66–68% in April 2025—a modest improvement from March. Average Room Rates (ARR) dipped slightly to ₹8,200–8,400, while Revenue Per Available Room (RevPAR) remained healthy at ₹5,412–5,712. Bengaluru performed above average on occupancy growth, reinforcing its leadership in urban hospitality.

Despite Bengaluru’s growth momentum, Mumbai (79–81%) and New Delhi (78–80%) held on to their lead in occupancy rankings. Mumbai also recorded the highest ARR of over ₹11,500, followed by Delhi at ₹10,500+. In contrast, Bengaluru’s growth was volume-driven, with year-on-year occupancy growth making it a high-yield city despite flatter room rates.

Elsewhere, Jaipur and Hyderabad stood out for ARR growth—up by 19–21% and 18–20%, respectively—indicating strong demand in leisure and secondary business hubs.

Of the branded rooms signed, 62% were greenfield projects, 22% brownfield, and 15% conversions. Expansion of existing properties made up only 1%, reflecting a shift toward new supply and long-term investment bets in both urban and emerging markets.

The sector’s strong fundamentals were echoed in the stock market. Mahindra Holidays & Resorts jumped 20.5%, Chalet Hotels rose 13%, and SAMHI Hotels climbed 9.6%. In contrast, hospitality majors IHCL and EIH saw modest corrections of –3.7% and –2.9%.

Supporting the hospitality boom, domestic air traffic in April 2025 reached 14.3 million passengers, up 2% month-on-month and 8.5% year-on-year. The rise in mobility, especially to business hubs like Bengaluru, continues to support hotel demand. mobility, especially to business hubs like Bengaluru, continues to support hotel demand.

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