Hotel and Resort Stakes: Profiting from Tourism Surge for 2025-26

1. Global Tourism Is Rebounding Strongly

According to JLL, global hotel investment is projected to rise by 15–25% in 2025, driven by improving demand, decelerating supply growth, and clearer debt markets. This surge reflects broader travel recovery: more international flights, higher tourist flows, and growing confidence in long-haul travel.

2. India’s Hospitality Sector Is a Key Growth Market

In Q1 2025, India saw a 16.3% year-on-year increase in RevPAR (Revenue per Available Room). For FY26, the hospitality sector is expected to deliver 7–8% growth in RevPAR, driven by a rebound in foreign tourist arrivals, strong domestic travel, and increased MICE (meetings, incentives, conferences, exhibitions) activity. Rating agency ICRA projects premium hotel occupancy rates in India will rise to 72–74% by FY26, with average room rates (ARR) increasing.

Government support is fueling this momentum: India’s Ministry of Tourism budget has been increased, and infrastructure investments are under way.

New supply: Branded hotel room inventory in India is expanding, and demand is expected to outpace supply growth in several markets.

Hiring in hospitality is accelerating: travel & hospitality employment in India is projected to grow by 5.9% in H2 FY26, indicating operational expansion.

3. Strong Investment Appetite

Investors are returning to the hotel sector. The projected jump in investment volume shows confidence in long-term travel demand. Real estate and hospitality investors are eyeing both established markets and emerging destinations due to the favourable risk-return mix.

4. Major Players Poised to Benefit

Hilton Worldwide (HLT) is emphasized by analysts for strong leisure travel demand, group travel recovery, and its loyalty program.

Hyatt Hotels is making a big push: it plans to deepen its presence in the all-inclusive resort space by acquiring Playa Hotels & Resorts for US$2.6 billion.

MGM Resorts is also benefiting: its earnings were boosted by increased bookings, especially in its casino-resort business, and it reports early demand for 2025.

5. Regional Dynamics Support Growth

In Spain, Melina (a major hotel chain) reported a 72% jump in first-half 2025 net profit to €88.5 million, supported by strong international tourist inflows. In Australia and New Zealand, the hotel market is also recovering: new room supply is rising, and global investors are taking notice. In Oman, hotel revenues rose by 18% in H1 2025, driven by a surge in tourist arrivals.

6. Upside from Policy & Structural Tailwinds

In India, speculation around GST reforms (“GST 2.0”) could help boost demand by reducing effective costs for travellers. Government-led infrastructure, such as airport expansion and tourist-circuit development, is enhancing travel connectivity and enabling higher hotel occupancy. Large-scale events weddings, spiritual tourism, major concerts are creating consistent demand for premium hotels.

7. Risks to Be Mindful Of

Supply-side risk: In some markets, new hotel construction could outpace demand if not managed carefully, pressuring room rates.

Economic uncertainty: Inflation, interest rates, and geopolitical risks could affect travel demand or investor appetite.

Operational cost inflation: Labour costs, maintenance, and energy prices may rise, compressing margins for hotels.

Demand concentration: Some hotel operators may be exposed to specific markets (e.g., luxury, MICE), which could be more volatile.

8. How Investors Might Position Themselves

Long-term plays: Established hotel chains with global reach (Hilton, Hyatt) are good candidates, especially those placing bets on resort and all-inclusive segments.

Regional bets: Investors may look at hospitality companies in growth markets like India, where domestic travel is strong and premium hotel occupancy is rising.

Real-asset exposure: Hotel REITs or lodging-focused real estate investors can benefit from both rising property values and operational cash flows.

Event-driven exposure: Companies that cater to MICE and large events may get outsized benefit from structural demand tailwinds.

9. Strategic Takeaways for 2025–26

The hospitality sector is likely to remain one of the top beneficiaries of the tourism rebound, given strong demand, rising room rates, and favourable investment conditions. Players who invest in resort and all-inclusive models will likely gain more, as these segments align with strong leisure demand. Geographic diversification (e.g., exposure in Asia, Europe, and Middle East) can balance risk and capture different recovery dynamics. Active capital deployment (new hotel development, acquisitions) paired with operational efficiency could drive strong returns. Monitoring policy shifts (e.g., tax reforms, infrastructure spending) will be critical for understanding the long-term outlook.