Rising Stars: The Evolution and Growth Trends in the Indian Resort Market

The Indian resort market has been quietly rewriting its own playbook over the past two decades. What once was a fragmented landscape of basic beachside hotels and tired hill-station retreats has matured into one of Asia’s most dynamic leisure hospitality segments – driven by global brands, evolving traveller tastes, and a growing appetite for experiences that blend luxury with cultural depth. This shift isn’t just about more rooms; it’s about a fundamental change in what Indians (and visitors to India) expect from a holiday.

From basic stays to experiential stays 🔗

For much of the late 20th century, Indian resorts catered to a narrow leisure market dominated by domestic tourists looking for affordable getaways. The properties were often functional rather than aspirational – large room blocks, generic dining, and limited recreational facilities. The shift began in the 1990s with economic liberalisation and accelerated dramatically post-2010 as disposable incomes rose, aviation expanded, and a younger generation began travelling differently.

Today, the resort segment is among the fastest-growing categories in Indian hospitality. Industry analysts project that resorts will outpace all other luxury hotel categories with a 13.2% CAGR through 2031, fuelled by the wedding economy, wellness travel, and the rise of “bleisure” culture where work and leisure blend seamlessly. The numbers tell only part of the story; the bigger transformation is qualitative.

Why the shift happened 🔗

Three forces converged to reshape the market. First, urban Indians began earning more and travelling more frequently, often choosing shorter, experience-led breaks over once-a-year long vacations. Second, the post-pandemic era created a strong preference for nature, space, and privacy – exactly what resorts offer. Third, social media turned resorts into stages where travellers expected curated, photogenic experiences rather than just comfortable beds.

The entry of global brands 🔗

Perhaps no single trend has reshaped the resort landscape more than the aggressive expansion of international hospitality groups. Almost every major global hotel brand – Marriott, Hilton, Hyatt, Accor, IHG, Wyndham, and Radisson – is expanding aggressively across metros, leisure destinations, religious hubs, and Tier-2 and Tier-3 cities. This wasn’t always the case. Two decades ago, leisure hospitality was largely the domain of domestic chains like Taj, Oberoi, and ITC, with international players concentrated mostly in business hotels in major cities.

The arrival of these brands has done more than add room inventory. It has imported global service standards, design sensibilities, and operational rigour. Properties now compete on the quality of their spas, the credentials of their chefs, the depth of their experience programming, and even the sustainability of their construction. The Leela, for instance, signed an 80-room luxury desert resort and spa in Jaisalmer scheduled to open in 2026, while Accor inked Raffles Ranthambore featuring 63 villas – both pointing towards a clear move into ultra-luxury, experience-driven leisure formats.

Domestic chains stepping up 🔗

Indian groups haven’t ceded ground. Mahindra Holidays & Resorts has committed to investing around Rs. 4,500 crore over the next three to four years to double its room capacity to 10,000. Indian Hotels Company Limited (IHCL) is similarly pursuing aggressive expansion, including a recent move to acquire a controlling stake in the Atmantan Wellness Resort to strengthen its clinical wellness portfolio. The competitive intensity has pushed the entire market upmarket.

Diversification of resort formats 🔗

One of the most striking growth trends is the sheer variety of resort formats now available. The old binary of “beach resort” versus “hill resort” has given way to a much richer palette of options.

Wellness retreats 🔗

Wellness has emerged as one of the most powerful drivers of resort development. The Indian wellness tourism market is projected to grow from USD 32.8 billion in 2024 to USD 57.2 billion by 2033, with destinations like Kerala, Rishikesh, and the Himalayas attracting both domestic and international guests seeking yoga, Ayurveda, and detox programmes. Properties now build entire programming calendars around panchakarma cleanses, sound healing retreats, and mindfulness sabbaticals.

Wedding-focused resorts 🔗

The destination wedding economy has become a category-defining force. Luxury resort bookings tied to destination weddings are valued at USD 603 million annually, with palace conversions in Rajasthan and beachfront venues in Goa setting global benchmarks. Many newer resorts are designed from the ground up with wedding logistics in mind – multiple banquet lawns, helipads, dedicated bridal suites, and integrated event-management teams. The destinations of choice – Udaipur, Jaipur, Goa, Kerala, and Uttarakhand – now compete with Bali and Phuket for global wedding traffic.

Eco-resorts and sustainable properties 🔗

A new generation of resorts is being built on sustainability principles from day one. The Ministry of Tourism has formalised this trend with the Sustainable Tourism Criteria for India (STCI), which requires hotels and resorts to integrate sewage treatment, rainwater harvesting, waste management, pollution control, and energy and water conservation measures at the project stage. Properties like Evolve Back in Coorg, Dune Eco Village in Pondicherry, and CGH Earth’s portfolio across South India have demonstrated that ecological responsibility and high-end hospitality can coexist comfortably.

Boutique and heritage resorts 🔗

The conversion of palaces, havelis, and colonial-era estates into intimate boutique resorts has carved out a distinctive niche. Rajasthan leads this segment, but properties in Madhya Pradesh, Gujarat, and Karnataka are increasingly tapping heritage architecture as a differentiator. These properties typically operate with fewer than 50 keys but command premium rates because of their character and exclusivity.

The rise of Tier 2 and Tier 3 destinations 🔗

Resort development is no longer concentrated in the traditional pockets of Goa, Kerala, and Rajasthan. Over 80% of new hotel projects are coming up in Tier II and Tier III cities, showing how smaller towns are becoming big travel hubs. Destinations like Coorg, Chikmagalur, Lonavala, Wayanad, Mussoorie, Jim Corbett, and Munnar have seen significant resort development. The North-East, traditionally underserved, is projected to grow at 16.46% CAGR through 2031 as regional connectivity and accommodation options improve from a low starting point.

This decentralisation is being supported by improved highway networks, regional air connectivity through schemes like UDAN, and aggressive state-level tourism marketing. States like Madhya Pradesh, Odisha, and Uttarakhand have invested heavily in destination branding, helping previously overlooked locations gain visibility.

Technology and personalisation 🔗

Today’s resort guest expects digital sophistication alongside physical comfort. Contactless check-in, app-based service requests, IoT-enabled rooms, and virtual concierge services have moved from novelty to baseline. Resorts are using guest data to anticipate preferences, customise experiences, and build loyalty programmes that span multiple properties. Around 92% of Indians say they want to combine work and leisure, prompting resorts to add co-working zones, dedicated business amenities, and high-speed connectivity to traditional leisure offerings.

Government policy as a catalyst 🔗

Public policy has played a meaningful role in accelerating resort development. The Swadesh Darshan Scheme 2.0 was rolled out with the aim of developing sustainable and responsible tourism destinations across the country, while the National Strategy for Sustainable Tourism, launched in 2022, set out seven strategic pillars to guide ecologically sound development. The Union Budget 2026-27 announced eco-trails in Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Araku Valley, and Podhigai Malai, signalling continued government interest in spreading tourism beyond traditional hotspots.

The GST Council’s recent rationalisation has further boosted the segment. Rooms priced below ₹7,500 per night now attract only 5% GST, down from 12%, giving mid-market hotels a major boost, while infrastructure status has been granted to exhibition-cum-convention centres. These structural changes make resort development more financially viable, especially in emerging destinations.

Challenges shaping future growth 🔗

Despite the strong momentum, the segment faces real headwinds. Skilled labour shortages remain acute, particularly in remote resort locations. Coastal regulation zone (CRZ) rules influence resort footprints by capping height and floor area parameters in designated zones, which shape new project economics and push some developments to inland locations. Seasonality affects revenue patterns, and over-tourism in popular destinations has begun raising concerns about ecological carrying capacity. Goa, for instance, now hosts more than 1.1 crore tourists annually, putting pressure on infrastructure and natural resources.

Operators are responding with longer-stay programming, off-season packages, and investments in experiences that work year-round. The most successful properties are those that have moved away from purely seasonal models towards experience calendars that draw guests in monsoon, winter, and shoulder seasons alike.

Where the market is heading 🔗

Looking ahead, three patterns seem likely to define the next phase of growth. First, quality and differentiation will matter more than scale – guests are increasingly choosing properties with distinctive character over generic chain experiences. Second, integration of wellness, sustainability, and culture will become standard rather than premium positioning. Third, asset-light expansion models, particularly management contracts and franchise arrangements, will allow brands to enter new geographies without heavy capital commitment.

The branded rental villa sub-segment offers a glimpse of where things are headed. It expanded from USD 329.6 million to an expected USD 1.377 billion by 2028, translating to a 33.2% CAGR, as guests opt for privacy-rich inventory such as pool villas and heritage bungalows. The line between resort, villa, homestay, and boutique hotel is blurring – and the winners will be operators flexible enough to deliver across formats.

What do you think? As resort experiences become more diverse and sophisticated, do you think Indian travellers will continue to favour culturally rooted properties, or will the convenience of internationally branded resorts win out? And how can the industry balance rapid growth in fragile destinations with the principles of sustainable tourism?

References

1. https://www.mordorintelligence.com/industry-reports/india-luxury-hotel-market
2. https://tourismindiaonline.com/indian-tourism-hospitality-in-2025-reset-resurgence-and-the-race-for-global-relevance/
3. https://www.mordorintelligence.com/industry-reports/india-wellness-tourism-market
4. https://www.ibef.org/industry/tourism-hospitality-india
5. https://www.travelandtourworld.com/news/article/how-indias-wellness-tourism-market-is-expanding-growth-drivers-trends-and-regional-insights-by-2033/
6. https://travelmedia.in/2025/12/14/sustainable-tourism-criteria-for-india-launched-by-the-ministry-of-tourism.html
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