Maldives-based hotel company Atomsphere Core has signed nearly 30 hotel projects across India as it seeks to tap growing demand for leisure travel.
"The leisure sector lacks quality hotels, which is why we will be chasing developments in resort locations," Salil Panigrahi, co-founder and managing director of Atmosphere Core, told Mint. India needs at least 25-30% more five-star and quality hotels to meet demand for leisure travel, he said.
The company operates nine resorts in the Maldives under brands such as Atmosphere Hotels & Resorts, OZEN Collection and Colours of OBLU, and looks to build a presence in destinations ranging from Goa and Rajasthan to Odisha and the Northeast.
Panigrahi said the opportunity is strong in resort destinations as travellers are prioritizing experiences over traditional city stays. "Gen Z travellers are increasingly looking for experiences and to understand India better," he said.
Industry executives say leisure destinations are increasingly rivalling traditional business hubs in terms of pricing power. Boutique resorts with limited room inventory are commanding premium rates while benefiting from lower development costs and strong operating margins.
"Large parcels of land with low room counts are commanding premium rates. Small-key boutique hotel formats are delivering average daily rates of ₹40,000-60,000, with operating margins north of 45%, driven by a strong traveller appetite," said Navneet Nagpal, founder and principal consultant at Spectra Hospitality.
Focus on expansion
Atmosphere Core is bullish on eastern India and the Northeast, where it has signed seven to eight projects across Assam and Meghalaya, alongside multiple developments in Odisha. "The Northeast has good potential. We will see development in states like Manipur, Arunachal Pradesh, Meghalaya and Assam," Panigrahi said, pointing to new airports, roads and connectivity projects that are making the region more accessible.
The company has also signed new projects in Rajasthan, Goa and Maharashtra. Its large hotel in Kolkata, a 235-room property, has been completed and is awaiting operating approvals. It has a 51-villa property in Goa, a 56-villa property in Coorg and a 70-villa property in Kannur. It also has a 46-villa hotel in Gurugram, placing it in the luxury category in most cities.
Unlike many hotel operators, Atmosphere Core is looking at an asset-light strategy. Most of its India projects will be operated through management contracts. Panigrahi said, “Ownership has its own challenges and multiplication becomes difficult just with owned hotels as it reduces the ability to build and operate too many hotels."
The company is taking a more direct role in only three projects—Mussoorie, Puri and Kannur—which together cost about ₹1,000 crore and are being developed by HNI investors, he said. Atmosphere Core is partnering on development and operations rather than financing them entirely.
Near-term pressure
Panigrahi expects some pressure on the hospitality sector over the coming quarters as global economic uncertainty and higher energy prices affect spending.
"The first thing oil affects is logistics, air tickets and shipping, and that has a direct impact on operations in hotels," he said.
According to him, occupancies in some markets are running about 20% below year-ago levels, while room rates softened across several major cities during April and May.
"Overall, the market rates will be compromised in the third and fourth quarter of this fiscal," Panigrahi said, though he added that high-demand luxury hotels and supply-constrained markets such as central Delhi are likely to hold pricing power.
Even so, he expects the industry to rebound as economic conditions stabilise. "Statistically, after every dip, the next high is always higher than the previous high," he said, adding that 2027 could mark the next strong upcycle for hospitality demand.
According to HVS Anarock, a hospitality consultancy, India's hotel sector closed calendar year 2025 on a strong note in Q4, supported by festive-season demand, weddings, year-end travel, and sustained MICE activity.
National occupancy improved sequentially during the quarter but remained broadly flat year-on-year, while average room rates grew 8-10% year-on-year, resulting in a 9-11% increase in RevPAR (revenue per available room). The overall performance was led by key metro and leisure markets.