Experience economy to outgrow goods spending in India over next five years: Report

Indian household spending on experiences is projected to outpace expenditure on physical goods between 2025 and 2030, according to a report released today by real estate services and investment firm CBRE.

The report revealed that Indian spending on experiences – recreational and cultural activities, restaurants, hotels, and travel – is expected to increase at a compound annual growth rate (CAGR) of 10.3 per cent . Meanwhile, spending on physical goods is projected to expand at a lower CAGR of 9.1 per cent over the same period.

Within the experiential market, hotel accommodation spending leads to the highest projected growth at a 10.6 per cent CAGR. This structural shift has been accelerated by the COVID-19 pandemic, which fueled long-term pent-up demand.

This trend is fundamentally driven by Generation Z (born 1997-2012), currently the largest demographic bloc across the Asia-Pacific (APAC) Region. As Gen Z achieves financial independence, their spending is forecasted to expand faster than any other living generation. The report highlights that travelers demand social-media-friendly designs, activated communal spaces, wellness integration and seamless technology.

To answer this generational demand, CBRE proposes lifestyle hotels. The report defines lifestyle hotels as properties that combine localized, independent designs with the backend loyalty programs and distribution networks of major chains.

The shift is backed by significant pricing power. Regionally, lifestyle hotel supply is projected to grow at a 10 per cent CAGR through 2030, outpacing the broader hotel market, while upscale lifestyle properties already command a 13 per cent revenue per available room premium over traditional hotels, despite smaller rooms.

Anshuman Magazine, Chairman & CEO of India, South-East Asia, Middle East & Africa at CBRE noted that the segment offers investors a “capital-efficient conversion pathway that maximizes long-term asset value.”

While markets like Singapore and Hong Kong have established lifestyle hotel sectors, India’s low penetration highlights a significant near-term supply gap.

Ada Choi, CFA - Head of Research, Asia Pacific at CBRE, remarked that rising incomes and a maturing Gen Z consumer base are currently converging with a “significant undersupply of lifestyle hospitality product” across India

Driven by rising land and construction costs, regional hotel investments are shifting away from new builds toward the conversion of older, unbranded properties. This aligns with broader market liquidity, where transactions under $100 million grew from 31 per cent of total APAC hotel investment volume in 2020 to 42 per cent in 2025. Furthermore, independent hotels prime for repositioning are making up roughly 30 per cent of those traded assets. “