Indian Spending On Experiences To Outpace Physical Goods, Driven By Gen Z Demand, Says CBRE Report
New Delhi, June 22, 2026: Indian consumer spending on experiential activities like travel, dining out, and hospitality is projected to outpace expenditure on physical goods over the next five years. According to a new report by real estate services and investment firm CBRE, titled “Gen Z Checks In: The Rise of the Lifestyle Hotel,” household expenditure by Indians on physical goods is expected to grow at a compound annual growth rate (CAGR) of 9.1% between 2025 and 2030. In contrast, broader experiential spending is forecast to grow at a higher 10.3% CAGR, with spending on hotel accommodation leading the category at a sharp 10.6% CAGR.
The report attributes this macroeconomic shift to the post-pandemic landscape, where pent-up demand and a strong desire to make up for lost time have driven consumer behavior since 2022. The primary force behind this evolution is Generation Z, born between 1997 and 2012, who now make up the largest demographic bloc in the Asia-Pacific region. As this generation achieves financial independence, their spending is expanding faster than any other living generation. The report highlights that Gen Z travelers prioritize curated, striking design environments that double as social media backdrops, alongside highly personalized service, seamless technology like smart-room automation, and activated communal spaces hosting events like local acoustic performances and wine tastings.
In response to these generational demands, the hospitality industry has seen the emergence of “lifestyle hotels.” These properties bridge the gap between independent boutique hotels and global chains, offering local character combined with the institutional loyalty programs and distribution networks of major brands. The supply of lifestyle hotels across the Asia-Pacific region surged at a 19% CAGR between 2015 and 2025, compared to just 5% for the broader hotel market. Looking ahead to 2030, lifestyle hotel supply is projected to grow at a 10% CAGR, vastly outpacing the 2% growth forecast for traditional hotels. Furthermore, upper upscale lifestyle hotels across the region achieved a 13% revenue per available room (RevPAR) premium over traditional counterparts in 2025, driven by strong food and beverage revenues and lean operations.
While India currently has a lower penetration of lifestyle hotels compared to hubs like Singapore and Hong Kong, developers and investors view this gap as a significant near-term 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.”
Experts echo the sentiment that India is uniquely positioned to benefit from this changing consumer dynamic. 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.”
Amid rising construction costs and land prices, developers are increasingly capitalizing on this trend by converting and repositioning older, independent, unbranded properties rather than building from scratch. This strategy aligns with broader market liquidity, as smaller asset transactions valued under $100 million grew from 31% of Asia-Pacific hotel investments in 2020 to 42% by 2025. CBRE recommends that developers looking to tap into this market prioritize design flexibility, identify local market gaps, and transform public spaces and dining concepts into community-facing amenities that serve both travelers and neighborhood residents alike.
