India’s hotel sector recorded a moderation in performance during May 2026 compared with April as seasonal travel demand eased and geopolitical uncertainties weighed on travel sentiment. Despite the slowdown, the industry posted strong year-on-year gains across key performance indicators compared with May 2025, according to the latest HVS ANAROCK market update.National average room rates (ARR) stood between INR 7,900 and INR 8,100, reflecting an annual increase of 8-10 per cent , while occupancy reached 63-65 per cent , up by 1-3 percentage points year-on-year. Revenue per available room (RevPAR) was estimated at INR 4,977-INR 5,265, representing growth of 22-24 per cent over the previous year.Among major markets, Bengaluru recorded the strongest ARR growth at 15-17 per cent year-on-year, supported by sustained corporate and commercial demand. Pune followed with 11-13 per cent growth, highlighting continued resilience across southern markets. In contrast, Mumbai recorded a 5-7 per cent decline in ARR, while Ahmedabad and Jaipur registered marginal declines.Occupancy remained broadly stable nationwide, although performance varied by market. Chandigarh emerged as the strongest performer, posting the highest year-on-year occupancy growth, while Gurugram, Jaipur and Mumbai reported declines. Compared with May 2025, occupancy improved across nearly all major markets, reflecting recovery from the disruption caused by war-like conditions during the corresponding period last year.The report also showed stable development activity across India’s branded hotel sector. During the first five months of 2026, 179 hotel signings covering 19,986 keys were recorded, broadly unchanged from the same period in 2025. Hotel openings also remained steady, with 54 properties and 4,471 keys becoming operational during the period.Tier 2 and Tier 3 cities continued to account for a significant share of development activity, underlining the industry’s focus on expanding beyond established metropolitan markets.Hotel stocks also posted positive momentum during the review period. Among listed hospitality companies, Leela Palaces Hotels & Resorts recorded the strongest monthly share price gain at 17 per cent , followed by ITC Hotels at 15 per cent and Indian Hotels Company at 10 per cent , reflecting continued investor confidence in India’s hospitality sector.
