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Indian hospitality industry enters defining decade
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Thursday, 02 July, 2026, 08 : 00 AM [IST]
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Anurag More , Mumbai
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Indian hospitality industry is entering a defining decade. Once driven largely by expanding restaurant chains and hotel infrastructure, the country's HoReCa (Hotels, Restaurants and Cafés/Catering) sector is now being reshaped by changing consumer lifestyles, digital innovation and a growing demand for memorable experiences.
According to Market Research Future, the India HoReCa market was valued at US$250.22 billion in 2024 and is expected to grow from US$267.43 billion in 2025 to US$520 billion by 2035, registering a compound annual growth rate (CAGR) of 6.8 per cent during the forecast period. Behind these impressive numbers lies a fundamental shift in how Indians dine, travel and interact with hospitality brands.
Experience , the new currency
Today's consumers are looking beyond food. Restaurants, cafés and hotels are increasingly becoming destinations for socialising, celebrations, remote working and community engagement.
"Consumers today are not just stepping out for food; they are stepping out for experiences," says Sahil Pandita, Founder of ProMiller Group. "We've consciously moved away from treating restaurants as places to eat and started thinking of them as spaces where people work, celebrate, socialise and spend time."
This evolution is influencing everything—from menu development and interior design to customer engagement strategies. Pandita points to Crazy Plant Lady, one of the group's ventures, where workshops, plants and community interactions complement the dining experience.
Convenience, meanwhile, has become equally important. Customers now expect faster service, seamless digital ordering and consistent quality without compromising the overall experience. "The businesses that will succeed are those that understand changing lifestyles rather than simply reacting to food trends," Pandita adds.
Urban India fuels growth story
Rapid urbanisation and rising disposable incomes continue to power the sector's expansion. Consumers across metros and emerging cities are dining out more frequently while exploring diverse cuisines and premium hospitality experiences.
The appetite for international flavours has grown significantly, with Italian, Japanese, Korean, Thai and other global cuisines finding enthusiastic audiences among Indian diners. This trend is creating opportunities for international restaurant brands to establish or expand their presence in the country.
India's booming tourism sector is adding another layer of momentum. With foreign tourist arrivals projected to reach 30.5 million by 2028, government initiatives aimed at strengthening tourism infrastructure are expected to generate fresh demand across hotels, restaurants and catering services.
Digital dining becomes mainstream
Technology has become central to the industry's transformation. Cloud kitchens have emerged as one of the fastest-growing business models, catering to consumers seeking convenience without sacrificing quality. At the same time, online ordering platforms, digital payments and delivery services have fundamentally changed customer expectations.
Industry estimates suggest India's online food delivery market could reach US$118.2 billion by 2028, making digital-first operations an essential growth strategy rather than an optional channel. For hospitality businesses, technology is also improving operational efficiency through data-driven decision-making, inventory management and customer engagement tools.
Winning customers beyond discounts
As customer acquisition costs continue to rise, hospitality operators are placing greater emphasis on loyalty and retention. "Customer acquisition has become increasingly expensive, which makes customer retention even more valuable," says Pandita. "Instead of chasing discounts or short-term promotions, we focus on building businesses that guests genuinely want to return to."
He believes memorable experiences, consistent service and positive word-of-mouth continue to outperform expensive marketing campaigns over time. Profitability, he explains, depends as much on operational excellence as marketing. Menu engineering, efficient staffing, inventory control and superior guest satisfaction collectively contribute to healthier margins. "Businesses often spend too much trying to attract new guests while overlooking the value of those who have already chosen them once."
Measuring returns beyond immediate sales
Marketing investments are also being evaluated through a broader lens. Rather than focusing solely on revenue generated from individual campaigns, hospitality companies are tracking customer acquisition costs, repeat visit rates, average spend and lifetime customer value.
The same long-term thinking extends to supplier relationships. "The lowest price isn't always the best value if it comes at the cost of inconsistent supply, poor service or quality issues," Pandita explains. "Reliable partnerships often have a much greater financial impact than they appear to on paper."
Procurement enters digital era
Procurement practices are also undergoing significant change. Verified B2B HoReCa marketplaces are making sourcing more transparent by allowing businesses to compare suppliers, products and pricing more efficiently. Yet, Pandita believes technology complements rather than replaces traditional relationships.
"Local suppliers continue to play an important role, particularly when speed, flexibility or emergency deliveries are required," he says. "The biggest change is that procurement has become more data-driven."
When selecting suppliers for commercial kitchen equipment, tableware and cleaning products, businesses increasingly prioritise product quality, durability, after-sales support and operational reliability over price alone.
Sustainability moves from marketing to operations
Environmental responsibility is no longer a branding exercise. Restaurants and hospitality businesses are adopting sustainable sourcing, reducing food waste, minimising single-use plastics and improving energy efficiency to meet growing consumer expectations.
"Sustainability is gradually moving from being a marketing initiative to becoming an operational necessity," says Pandita. He believes today's consumers can distinguish between genuine commitment and superficial messaging. "The future belongs to businesses that make responsible practices part of their daily operations rather than treating them as occasional campaigns."
Looking ahead
The Indian HoReCa sector is entering a new era where success will depend less on scale alone and more on the ability to deliver authentic, technology-enabled and sustainable customer experiences.
"The hospitality industry is evolving rapidly, driven by changing consumer expectations rather than just economic growth," Pandita concludes. "Guests today value experiences, convenience and consistency more than ever before."
With domestic travel remaining robust, international tourism recovering and digital adoption accelerating, India's HoReCa industry appears well-positioned for sustained expansion. Businesses that combine operational excellence with a distinctive brand identity will be best placed to capture the opportunities emerging in one of the world's fastest-growing hospitality markets.
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