India emerges as key player in Asia Pacific hospitality sector growth

New Delhi: India continues to emerge as the key player for driving the Asia Pacific (APAC) hospitality sector, especially in Asia Pacific countries such as Thailand, Vietnam, and South Korea, according to a report by Colliers.

The report highlights that while capital investments in the region are currently focused on high-liquidity markets like Japan, South Korea, and Australia, India is emerging as a crucial driver of demand.

"With rising disposable incomes and growing appetite for experience-led travel, Indian tourists are becoming a dependable, year-round source of demand in the hospitality sector," according to the Colliers release. This trend is contributing to sustained strong room rates and signifies a structural change in regional hospitality dynamics.

"India is driving a structural shift in Asia Pacific's hospitality landscape, fuelling resilient domestic growth while emerging as a powerful outbound force," Nikhil Shah, Managing Director Hospitality & Alternatives, said.

Adding, "With strong demand across the luxury, lifestyle and MICE segments, and rising investor confidence in experience-led assets, India is now central to regional tourism flows, sustaining premium pricing and reshaping travel dynamics."

Additionally, according to Vimal Nadar, National Director and Head of Research, Colliers India, "The outlook for the Indian hospitality sector remains strong, with Tier II destinations set to become key contributors to the next phase of expansion. Interestingly, spiritual tourism is emerging as a key driver of inbound travel within India, driving the growth of the hospitality sector."

Cities like Phuket, Tokyo, New Delhi, Mumbai, and Osaka led the region in Average Daily Room Rates (ADR) growth in Q1, helped by strong domestic demand, a surge in international travel, and effective market positioning.

"The first quarter has traditionally been a slow period for transactions, and given geo-political uncertainty, it is not unexpected that many adopted a cautious, 'wait-and-watch' approach. However, as market conditions stabilise and the imperative to deploy capital intensifies, a pickup in activity is anticipated as the year progresses," said Govinda Singh, Colliers' Executive Director.