India's top hotel chains are pushing back against suggestions that they have reached their ceiling for room rates. According to reports from The Economic Times, hotel executives said the country's premium hospitality market remains underpriced compared with global peers and is entering a phase where protecting room rates, rather than chasing occupancy, has become the dominant strategy. Vikramjit Singh Oberoi, managing director and CEO of EIH Ltd, which owns the Oberoi and Trident group of hotels, stated on a recent earnings call that "India is still significantly underpriced versus Europe, North America and many Asian luxury markets." While luxury hotels globally now charge upwards of $1,000 (₹96,000) a night, India remains well below those levels, with Oberoi Hotel New Delhi room rates hovering between ₹20,000 and ₹30,000 per night depending on the season. As per The Economic Times, Oberoi emphasized that "Demand remains robust across both business and leisure destinations," adding that occupancy across Radisson's India portfolio increased by around 5% this summer compared with a year earlier.
After several years of strong demand, limited new supply and rising domestic travel pushed average room rates in India to record highs. According to reports from The Economic Times, luxury and five-star hotel operators are increasingly prioritizing pricing power over discounting to fill rooms. Anuraag Bhatnagar, CEO of The Leela, said on the company's Q4 earnings call that "we continued to grow average daily rates in double digits" despite weaker occupancy due to international travel disruptions. At The Leela Palace New Delhi, rooms are priced from ₹39,000 to ₹55,000 this week, while ITC Hotels reported ADRs rose 6% during the year with occupancy expanding by 229 basis points, resulting in a 10% increase in revenue per available room (RevPAR). Bhatnagar explained that "The Leela's average daily rates increased during the March quarter due to its 'strong consumer pull, brand, pricing power and disciplined execution,'" as reported by The Economic Times.
According to reports from The Economic Times, Nikhil Sharma, managing director and COO of Radisson Hotel Group, said the industry had entered a more mature phase where pricing was increasingly driven by the quality of experiences. He noted that "Sustainable growth will be driven by differentiated experiences that guests genuinely value and are willing to pay for, rather than by occupancy or room rates alone." Hospitality consultant Vijay Thacker of Horwath HTL emphasized that recent softness in rates should not be interpreted as a sign that luxury pricing has peaked, stating that "We cannot look at a short window of time for the luxury sector. You need to take a medium- to long-term perspective. For the quality of the product and service that India offers, we are underpriced." Despite reporting record ADRs, strong occupancy and robust earnings, shares of most listed hotel companies lagged the broader market in 2026, with ITC Hotels down about 5% year-to-date and EIH down about 8%. As per The Economic Times, hotel stocks are generally cyclical in nature and tend to move in extremes compared to the steady, broad-market growth of the Nifty 50.
According to reports from The Economic Times, branded hotel supply is expected to rise to about 300,000 rooms by FY30, up from 196,464 rooms in FY25. Developers are betting heavily on the premium end of the market, with luxury hotels accounting for about 21% of the upcoming branded room pipeline, according to hotel consultancy Hotelivate-Savills. However, not everyone believes that room rates have unlimited room to rise. Kapil Chopra, founder of The Postcard Hotel, argued that only luxury resorts have significant pricing headroom, stating that "I don't think it is appropriate to compare Indian city hotel rates with Europe or North America. Unlike London, Paris and Rome, our cities do not attract comparable volumes of international luxury travellers. When we combine distribution, product quality and service, luxury room rates in our city hotels are approaching their natural ceiling." According to The Economic Times, Chopra believes that "India's luxury resorts remain undervalued relative to comparable destinations overseas because the country's international leisure tourism ecosystem is still evolving," adding that "I believe resort room rates have considerably greater headroom over the long term."
