The spending by Indians on experiences – recreational and cultural activities, restaurants, hotels, and travel – is expected to outpace the spending on physical goods between 2025 and 2030, according to a report titled “Gen Z Checks In: The Rise of the Lifestyle Hotel” released by world’s leading real estate services and investment firm CBRE. The expenditure on hotel accommodation is expected to grow even faster, making it one of the most dynamic consumer spending categories in the country.
An analysis of Oxford Economics data by CBRE Research projected that household expenditure by Indians on physical goods is likely to grow at a compound annual growth rate (CAGR) of 9.1% between 2025 and 2030. However, broader experiential spending is forecast to grow at a higher 10.3% CAGR over the same period. The spending on hotel accommodation is expected to grow at an even sharper 10.6% CAGR.
The report noted that the shift towards experiences was fundamentally accelerated by the COVID-19 pandemic. Pent-up demand and a desire to make up for lost time have been driving the trend since 2022.
Gen-Z Driving the Shift
The trend is being primarily driven by Generation Z, which currently accounts for the largest demographic bloc across the Asia Pacific region. As Gen Z, born between 1997 and 2012, achieve financial independence, their spending is forecast to expand faster than any other living generation, according to the report.
It added that Gen Z travelers demand striking, curated design environments that double as social media backdrops, personalized service that avoids corporate predictability, and activated communal spaces that host experiences such as wine tastings, acoustic performances, and local cultural events.
Wellness integration is equally non-negotiable, with seamless technology from self-check-in to smart-room automation, now firmly an expectation rather than differentiation.
Emergence of Lifestyle Hotels
According to CBRE, a new category of property, the lifestyle hotel, has emerged as the industry’s answer to this generational demand. Unlike boutique hotels or global chains, these hotels occupy a middle ground: the design and local character of an independent property, backed by the operational scale, distribution networks, and loyalty programs of an institutional brand.
Between 2015 and 2025, the overall hotel supply across the Asia Pacific region grew at a steady 5% CAGR. However, lifestyle hotels grew at 19% over the same period. Now till 2030, the supply of lifestyle hotels is projected to maintain a 10% CAGR, five times the 2% growth forecast for the broader hotel market.
Moreover, this growth is backed by clear pricing power. The report highlighted that in 2025, upper upscale lifestyle hotels across Asia Pacific commanded a 13% revenue per available room (RevPAR) premium over traditional properties in the same category. Upscale lifestyle brands added a further 7% premium, achieving this despite smaller room sizes by generating stronger food and beverage revenues and running leaner operations.
In India, the penetration of lifestyle hotels remains low as compared to markets like Singapore and Hong Kong. That gap is increasingly being read by developers and investors as an opportunity.
“The contemporary consumer no longer just purchases lodging but wants unique, culturally immersive, and digitally shareable environments,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE. “This structural shift towards experiential consumption is an enduring macroeconomic trend. For property owners and institutional investors, the lifestyle hotel segment represents a compelling double-win: measurable RevPAR and ADR premiums over standardized assets, and a capital-efficient conversion pathway that maximizes long-term asset value.”
Ada Choi, CFA – Head of Research, Asia Pacific, CBRE, said, “The experience economy is not a trend but a structural reset. The hospitality sector in the APAC region is at an exciting point in this journey. In India specifically, rising incomes, a maturing Gen Z consumer base, and a significant undersupply of lifestyle hospitality product are converging to create one of the most attractive investment environments in the region.”
The Investment Opportunity
According to CBRE, developers are increasingly turning to existing properties rather than building from scratch, given the rising land costs and construction expenses. Older, independent, unbranded hotels – of which India has a significant stock – are being converted and repositioned as lifestyle properties, often at a fraction of the cost of new development.
The smaller asset transactions are also dominating market liquidity. Assets valued under $100 million grew from 31% of total hotel investment volume across Asia Pacific in 2020 to 42% by 2025, with roughly 30% of traded assets comprising independent hotels ripe for repositioning.
To capitalize on the opportunity, CBRE suggested that developers adopt a market-specific approach, identifying local white spaces, prioritizing design flexibility to preserve future exit optionality, and activating public spaces and food and beverage concepts as community-facing amenities that serve transient guests and local neighborhood demand alike.