Ahmedabad, Chandigarh Lead India's Hotel Recovery With 24-36% RevPAR Growth
Domestic travel demand drove Ahmedabad and Chandigarh to India's fastest hotel recovery in May 2026, with RevPAR up 24-36% and Ahmedabad ARR climbing 12-16%. National RevPAR rose 22-24% to Rs 5,000-5,265 as occupancy hit 63-65%. Dolat Capital sees growth moderating to single digits ahead.
What happened
Indian Hotel Sector · Ahmedabad and Chandigarh lead India's hotel recovery with 24-36% RevPAR growth in May 2026, driven by domestic travel demand. National
Key facts
- RevPAR growth 24-36% Ahmedabad/Chandigarh
- ARR growth 12-16% Ahmedabad
- occupancy up 10-20 ppts
- national ARR Rs 7,900-8,100
- national RevPAR Rs 5,000-5,265 up 22-24%
- occupancy 63-65%
- Q1 revenue growth ~12% forecast
Why this matters
Tier-2 leaders like Ahmedabad and Chandigarh are outpacing metros, flagging these markets as prime targets for hotel expansion or acquisition.
What to watch
- Monthly RevPAR/ARR/occupancy prints for Ahmedabad and Chandigarh confirming or breaking the trend
- New hotel supply announcements and key additions in the two lead cities
- Domestic air passenger traffic and airfare trends into tier-2 airports
- MICE/wedding season booking pipelines and corporate travel budgets
- Q2 FY27 hospitality earnings and management guidance on growth deceleration
- Branded chains (IHCL, Marriott, Lemon Tree) accelerate signings and conversions in Ahmedabad, Chandigarh and adjacent tier-2 corridors
- Hotel operators push ARR-led pricing while occupancy is high to bank margin ahead of moderation
- Retail/F&B and travel-adjacent players lean into tier-2 footfall uplift (mall traffic, QSR, retail near business districts)
- Investors rotate into hospitality names with tier-2 exposure and asset-light expansion pipelines