ITC Hotels Ltd, under the leadership of Chairman and Managing Director Mr. Sanjiv Puri, has projected a significant transformation in India’s hospitality sector over the next five years. The company anticipates that demand for hotel rooms in India will far outpace supply, creating an opportunity for higher occupancy rates and better realisation per room. This projection is anchored in strong macroeconomic fundamentals, growing domestic tourism, and the revival of international travel.

Surging Demand for Rooms

According to Mr. Puri, international tourist arrivals are expected to soon exceed pre-COVID levels, driven by India’s growing appeal as a business hub, increased connectivity, and government-led tourism initiatives. In 2024, foreign tourist arrivals reached just under 10 million, compared to 11 million in 2019, leaving considerable headroom for growth. Coupled with a strong domestic travel market, the hotel sector is poised for sustained expansion.

ITC Hotels’ Ambitious Growth Plan

Earlier, ITC Hotels had set a target of achieving 200 operational hotels by 2030. However, based on current growth momentum, the company now expects to surpass this figure and achieve over 220 hotels with 20,000 keys within the same timeframe. This expansion will be underpinned by the company’s asset-right strategy, which focuses on optimising investments while expanding into tier-II and tier-III cities.

In FY24 alone, ITC Hotels signed 30 franchisee and management contracts, reinforcing its growth trajectory. As of June 2025, it operates 143 properties in 90 locations across six distinct brands, catering to varied segments of the hospitality market.

Market Potential and Competitive Landscape

India’s per capita hotel room penetration remains significantly below global standards, with only 0.3 rooms per 1,000 people compared to the world average of 2.2 rooms per 1,000 people. This gap highlights the vast potential for growth in the hospitality sector.

Mr. Puri noted that the sector’s growth is being fuelled by rising societal aspirations, digital transformation, India’s positioning as an investment destination, and strong macroeconomic indicators. Tourism is witnessing a surge in segments such as nature and adventure travel, cultural and spiritual tourism, religious tourism, and medical tourism.

Government Initiatives to Support Growth

The government’s plan to develop 50 tourist destinations is expected to significantly boost tourism infrastructure and employment opportunities. Improved connectivity through highways, airports, and regional transport will also facilitate tourism growth in previously underserved regions.

Risks and Global Context

While the outlook remains positive, geopolitical fragmentation is seen as a potential risk that could affect international travel flows. Nevertheless, the long-term fundamentals for the sector remain robust.

Corporate Structure and Ownership Changes

The hotel business was demerged from ITC Ltd in January, with ITC Ltd retaining a 39.87% stake. British American Tobacco (BAT) Plc holds 15.29% as foreign direct investment (FDI) and has expressed intent to sell its stake. The sale is currently awaiting Reserve Bank of India (RBI) approval.

Conclusion

With a clear focus on strategic expansion, tapping into under-penetrated markets, and leveraging tourism growth, ITC Hotels is positioned to play a leading role in India’s hospitality transformation by 2030. The company’s expansion into emerging cities, combined with increasing domestic and foreign tourist inflows, makes its 220+ hotel target not just achievable but potentially surpassable.

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