This summer, Anisha and Karan Kapur, a Delhi-based couple in their mid-40s working corporate jobs, are skipping a ritual they rarely miss: an overseas holiday.
With only a few weeks off, they had planned a trip to Portugal, drawn by Europe’s pleasant summer weather. But with geopolitical tensions and the West Asia war, they decided to stay on safer shores instead, swapping the Portuguese summer for a shorter luxury break in Goa and along the Konkan coast.
Hotels in India, sensing an opportunity, are looking to lure such travellers with offers that range from longer stays to all-inclusive meals. Instead of discounts, hotel chains and travel companies are pushing a variety of packages, longer-stay formats and premium leisure experiences.
ITC Hotels is curating packages in keeping with the premium demand that remains resilient in popular leisure destinations. Radisson Hotel Group is prioritising long-term value over price-led volume growth.
The Leela Palaces, Hotels and Resorts is offering “stay for three nights, pay for two” packages at some of its Rajasthan properties. Uber luxury player The Postcard Hotels has flexible itineraries for long-stay guests.
This is helping these companies maintain room rates rather than discount aggressively. Oberoi Hotels has a similar 'Taste of Luxury' package with savings on spa and other services, along with major meal inclusions.
ITC Hotels is seeing a gradual shift in holiday spends towards domestic destinations, managing director Anil Chadha told Mint. “Factors such as global travel uncertainty, convenience and value are encouraging Indian travellers to explore leisure destinations within the country."
At The Postcard Hotel, founder and CEO Kapil Chopra said performance since December has outstripped last year’s growth, with a boost in March as overseas travel became more complicated.
Growth projections
“We are looking at a very clear growth of 10% on occupancy and 10% on rates over last year,” Chopra said, projecting about 20% revenue growth for the chain this summer. From December to March, Postcard’s same-store properties posted over 30% consolidated growth. Its recently opened Assam property grew at even higher multiples, he said.
Chopra said its flexible five-night itineraries allows travellers to experience multiple properties under one package, rather than the typical “stay two nights, get one free” deal. Indians may be taking shorter holidays overall, but hotel operators are trying to stretch those breaks into longer, higher-value stays.
For the Radisson Hotel Group, demand is “mixed but overall resilient”.
“There are also early signs of Indian travellers showing a preference for domestic destinations, with some outbound demand being redirected within the country. This is most visible across established leisure markets and drive-to destinations," said Nikhil Sharma, managing director and COO, South Asia.
According to ratings company Icra, hotel occupancy in India is expected at 72-74% in FY26 compared with 70-72% in the previous two years, and average room rates are projected to rise to ₹8,200-8,500 from ₹8,000-8,200 in FY25. Icra forecasts that overall hotel revenue will grow 6-8% in FY26.
About 14 million of the 32 million outbound departures by Indians last year were leisure trips, with West Asian countries accounting for a significant share, according to hospitality consultancy HVS ANAROCK — a portion of this demand will be redirected to domestic destinations this summer.
Pricing power
“Even a modest shift in outbound leisure travel can translate into meaningful incremental demand for India’s domestic tourism market,” said Akash Datta, managing director (South Asia) for HVS ANAROCK. “Resort destinations and drive-to leisure markets within a few hours of major metros are likely to see stronger demand." This is likely to reflect in firmer pricing in peak travel weeks rather than a sharp jump in occupancies, he added.
ITC Hotels said travellers this summer are responding more to destination-led leisure stays and curated offers than to standalone discounts. Its Storii and Welcomhotel brands are performing particularly well, with families and couples opting for experience-driven getaways in the hills and beaches.
Destinations drawing the most interest include Goa, Mussoorie, Manali, Chail, Shimla, Dharamshala, and Corbett Tiger Reserve.
Online booking platforms reflect the same pattern. Yatra Online reported strong domestic demand even after a 15-20% year-on-year rise in airfares, suggesting that Indians remain willing to travel, though more selectively.
Bharatt Malik, senior vice-president for flights and hotel business at Yatra, said booking lead times have shortened by 10-15%, with travellers planning trips closer to departure. Hill destinations such as Shimla, Manali, Mussoorie, and Munnar are popular as are Rajasthan, Kashmir and other drivable leisure markets.
Although 80-90% of the bookings are for short stays, averaging two nights, average booking values have risen 20-35% across destinations, Malik said. That is helping create a summer market defined less by bargain hunting and more by what travel companies describe as high-intent, high-value leisure demand.
Yatra said there are continuing signs of premiumization, with a segment of travellers opting for higher-quality stays and curated experiences in destinations such as Udhagamandalam (popularly known as Ooty), Coorg and Munnar.