Indian hotel chains shift expansion toward upscale stays as domestic demand lifts room rates

EIH, Samhi, Lemon Tree, ITC Hotels, IHCL, IHG and Wyndham are adding upscale and upper-upscale supply, targeting a gap between luxury and budget hotels. Trident’s June-quarter RevPAR rose faster than the upper-upscale market average.

— Source publishedThu, 27 Aug, 2026, 12:48 IST·First seen Thu, 27 Aug, 2026, 12:50 IST·Source Mint · Companies

What happened

EIH Ltd · Indian hotel chains are expanding upscale and upper-upscale brands to capture domestic demand, higher room rates and portfolio white spaces. EIH's

Key facts

  • Trident RevPAR grew 13.8% in the June quarter
  • Upper-upscale industry average RevPAR grew 9.2%
  • Oberoi luxury RevPAR grew 8.2%
  • Samhi's Noida hotel will have 162 rooms
  • Samhi revenue mix is 45% upscale and 55% midscale
  • Samhi targets 60-65% upscale and 35-40% midscale revenue
  • Midscale accounted for 42% of 2025 hotel keys signed
  • Upscale and upper-upscale accounted for 42% of 2025 hotel keys signed
  • IHG targets 400 hotels in its India pipeline over five years
  • The Aarlis Hotel Panchkula has 145 rooms

Why this matters

Development and acquisition teams should prioritize upscale assets and partnerships in high-demand domestic markets, where the gap between luxury and budget lodging is attracting aggressive expansion from leading chains.

What to watch

  • Quarterly RevPAR growth versus upper-upscale industry average, especially whether Trident maintains its 13.8% growth premium.
  • Pipeline-to-existing-room ratios and opening schedules for IHCL, ITC Hotels, EIH, Lemon Tree, Samhi, IHG and Wyndham.
  • Occupancy trends versus ADR growth; a shift from ADR-led growth to occupancy-led growth would indicate greater supply pressure.
  • Domestic air passenger volumes, corporate travel budgets, wedding demand and MICE bookings.
  • Hotel project financing costs, land prices and construction-cost inflation.
  • Rate discounting and online travel agency inventory levels in major metro and leisure destinations.
  • Accelerate management-contract, franchise and conversion signings in upper-upscale segments to grow room inventory without materially increasing balance-sheet risk.
  • Use RevPAR outperformance to raise room rates selectively, bundle food-and-beverage and events offerings, and deepen loyalty-member direct bookings.
  • Prioritize expansion in undersupplied leisure, pilgrimage, convention and tier-2 city markets while limiting exposure to oversupplied metro micro-markets.
  • Secure long-term corporate, airline, wedding and MICE contracts before competing supply opens.
  • Increase hiring, training and technology investment to protect service levels and margins as premium inventory expands.

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