The Sustainability Challenge for India's Hotel Industry

As India emerges as a key market for hospitality brands, both global and homegrown, sustainability has become an increasingly pressing concern. Despite growing awareness, industry leaders agree that the sector is still in the early stages of integrating sustainable practices in a meaningful way.

Ajay Bakaya, chairman of Sarovar Hotels, emphasized that while there is a general intent toward sustainability, it often lacks depth. “There is good intent, but there is a lot of lip service, and this lip service is not helping the situation. We need to use common sense,” he said, adding that the hospitality industry still has a long way to go before it gets its “act together.”

Bakaya also talked about the need for concrete deadlines and accountability in meeting sustainability goals, suggesting that the industry is just beginning its journey toward meaningful change.

Gaurav Pokhriyal, executive vice president – human resources at Indian Hotels Company (IHCL), noted that the Indian hospitality sector operates under several constraints.

“We don’t have mainstream conversations around sustainability because 90% of the industry is unorganized. The material impact of the organized sector remains limited.”

He however, acknowledged that regulatory requirements for data disclosure have led larger players towards structured sustainability strategies, including specific resource allocations. Pokhriyal also stressed the importance of social sustainability and internal culture change.

“Sustainability cannot happen in silos. It requires a cultural transformation within organizations.”

According to Suman Billa, additional secretary at the Indian Ministry of Tourism, one of the core challenges is the widening gap between demand and supply.

“Over the last 10 years, people have started earning more and are traveling more avidly,” he noted at a recent industry conference.

Despite this growth in demand, destination development has been stagnant, leading to overcrowded tourist spots. Billa pointed out that a lack of effective local-level governance continues to hamper sustainable management. However, he noted that the current budget allocates funds for developing new destinations and introduces a performance-based reward system for existing ones.

“The focus on sustainability must involve all stakeholders,” he added.

The gap lies not in planning but in execution, said Patu Keswani, chairman and managing director of Lemon Tree Hotels.

“The problem in India is not the strategy but the execution. Nobody wants to change,” he said.
“To bring about change, either the current situation must become more painful, or incentives must be introduced.”

Prestige Group Plans $470 Million IPO for Hospitality Business

Bengaluru-based real estate developer Prestige Group is planning to take its hotels business public with an INR 40 billion ($470 million) IPO. According to media reports, Prestige Group’s board has approved the IPO plan and the company is working on the draft red herring prospectus. 

The proceeds from the IPO are expected to be used to develop new properties as well as to reduce the company’s debt burden. Prestige owns several flagship properties in Bengaluru including Sheraton Grand Hotel & Convention Centre in Whitefield, JW Marriott Bengaluru Prestige Golfshire Resort and Spa, and Moxy Bengaluru Airport, as well as a Conrad-branded property. 

The hospitality industry in India is witnessing growing positive investor sentiment. Earlier this year, Indian conglomerate ITC Limited demerged its hotel business as a separate entity: ITC Hotels. Investment banking company Jeffries also said as companies aim to capitalize on the strong outlook for the industry, the public listing landscape for hotels in India will likely expand.

Last year, Schloss Bangalore, the luxury hospitality group behind India’s The Leela Palaces, filed for a massive $599 million (INR 50 billion) IPO, the largest ever in India’s hotel industry. Its aim is to capitalize on the growing demand for high-end accommodations in India while also paying down debt. 

Owner and developer Brigade Hotel Ventures and asset owner Ventive Hospitality are also entering the stock market. In the recent past, Samhi hotels, Apeejay Surrendra Park Hotels, and Juniper Hotels collectively raised INR 40 billion ($466 million) from their IPOs. 

India’s Air Passenger Traffic to Increase by 80% in 5 Years

The air passenger traffic in India is expected to increase by 80% over the next five years. According to new government data, the traffic will rise from 222 million passenger journeys in 2023-24 to nearly 400 million by 2028-29.

During this time, the commercial aircraft fleet across airlines is projected to go up from over 800 to 1,300, while overall airport handling capacity is expected to increase from 550 million passengers per annum to 800 million.

The Indian government’s modified regional air connectivity scheme aims to connect to 120 additional destinations over the next 10 years, reaching 40 million passengers. This is a part of the country’s infrastructure strategy to meet the growing demand for air travel especially in smaller markets.

Jammu Tourism to Get New Adventure Trails, Paragliding Project

The Jammu division in India’s Jammu & Kashmir is likely to get a paragliding facility at Aithem, as proposed by the department of tourism. The INR 40 million ($470,000) facility will also have lounges, cafes, sunset points, and public utilities. 

This is a part of the roadmap for tourism development in the Jammu division. According to the roadmap, five major tourism circuits will be launched in the region along with other initiatives to promote multi-day tourist stays, eco-tourism, and adventure activities. These circuits will include opportunities for trekking, white-water rafting, water-based tourism, alpine treks, and off-beat adventure trails, along with religious and heritage tourism. 

IndiGo Ups its Loyalty Program Game

IndiGo has partnered with boutique hotel brand The Postcard Hotel to offer exclusive benefits to the members of its BluChip loyalty program. Through this partnership, IndiGo’s BluChip members can earn up to 60,000 BluChips annually from their stays at The Postcard Hotel properties across India, Sri Lanka, and Bhutan. 

The announcement comes shortly after IndiGo and Accor linked their loyalty programs. 

In order to make its recently-launched loyalty program more lucrative, the budget airline has also partnered with food delivery company Swiggy. The partnership will allow BluChip members to earn reward points when they spend on Swiggy across Food, Instamart, and Swiggy Dineout verticals. 

Appeal of Spiritual Destinations Grows

In the first three months of 2025, online travel platform Agoda has witnessed a growing interest in cultural and spiritual destinations in India. The increased interest has been driven by domestic as well as inbound travelers, it noted. 

Allahabad (now known as Prayagraj) has been a key destination. The company said that in early 2024, the city did not feature in Agoda’s top 50 accommodation search rank. However, across the first three months of this year, it ranked at the 11th spot in domestic searches, and at 15th place among inbound travelers, driven by the Mahakumbh festival. Apart from this, Ayodhya, Rishikesh, and Vrindavan have also risen among domestic travelers.

In a recent feature, Skift had highlighted how religious tourism has surged in India in recent years.

AirKerala to Commence Flight Operations in June

Kerala-based airline AirKerala is expected to commence operations in June this year, perhaps making it the first airline from the state. Another airline Alhind was scheduled to start operations from Kerala by the end of 2024, but the airline is yet to take off.

AirKerala Chairman Afi Ahmed said that the first flight would take off from Kochi. AirKerala’s vision is to become a budget-friendly airline that connects smaller cities in south and central India with metro cities. 

The fully private equity venture will operate flights on 72-seater economy-class ATR aircraft. It is initially leasing five planes from an Irish company, and is expecting the first aircraft to arrive by the first week of May. It has plans to purchase its own fleet and will commence international operations to the Gulf countries once it has 20 planes in its fleet.