Geopolitical Tensions and Low Season Drag India Hotel Occupancy Below 60%
The seasonal slowdown and tensions with Pakistan brought occupancy and revenue per available room (RevPAR) down for the hospitality industry in India in May. According to hospitality advisory firm HVS Anarock's latest data, RevPAR for hotels across India in May were down by over 20% as compared to April.
Occupancy also declined month-over-month to 58-60% in May. This was also lower than the occupancy rate last May. The average room rates declined 10-12% compared to April, HVS data showed.
HVS said, 'Occupancy trends in May 2025 revealed a noticeable year-on-year dip across most major markets, reflecting seasonal softening combined with geopolitical sentiment dampening travel demand. Chandigarh reported the sharpest decline... possibly due to the tensions between India and Pakistan.'
Sector Still Remains Strong: Despite the slowdown in May, compared to the month before, the industry fared better than it did last year. The average room rates were 6-8% as compared to May 2024, while the RevPAR increased by 4-6% year-on-year.
This indicates that the dip in occupancy was likely driven more by geopolitical tensions as the sector continued to perform better than last year despite seasonal slowdown typically seen during May.
'Average rates in May 2025 saw robust year-on-year growth, with double-digit gains in several cities,' HVS said in its report. 'Mumbai and New Delhi maintained their premium positioning, with average rates exceeding ₹10,000 ($117) and ₹8,500 ($99), respectively, while Jaipur and Hyderabad saw tremendous year-on-year growth.'
Through May this year, hotel brands signed nearly 19,100 rooms, up 27% year-on-year. During the same period, over 5,300 branded keys have been opened for operations, an increase of 46% as compared to last year.
Earlier this year, HVS Anarock said that its outlook for the Indian hotel industry is 'not just optimistic; it's electric.'
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