The seasonal slowdown, coupled with tensions in Pakistan, led to a decrease in the occupancy rate and revenue generated per available room (RevPAR), for the Indian hospitality industry. RevPAR was down more than 20% in May for hotels in India, according to HVS Anarock.
In May, occupancy also decreased month-over-month from 58-60%. It was also lower than last May’s occupancy rate. HVS data revealed that the average rates of rooms fell 10-12% from April.
HVS reported that “Occupancy rates in May 2025 showed a noticeable drop year-onyear across major markets. This was due to a combination of seasonal softening and geopolitical sentiments dampening the travel demand.” Chandigarh experienced the largest decline, possibly because of tensions between India Pakistan.
Sector Remains Strong Despite May’s Slowdown: The industry did better this year than last, despite the slower pace in the previous month. RevPAR grew by 4-6% compared to last year. Average room rates increased 6-8% compared to the May 2024 period.
This suggests that the drop in occupancy was more likely caused by geopolitical tensions, as the sector has continued to perform better this year than last despite seasonal slowdowns typically seen in May.
HVS reported that the average rates for May 2025 grew by double digits in several cities. “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.”
Hotel brands have signed up nearly 19,100 rooms in May, a 27% increase on last year. Over 5,300 keys with branded names have been opened to operate during the same time period. This is a 46% increase compared to last.
HVS Anarock, a hotel management company in India, said earlier this year its outlook was “not just positive; it is electric.”
