India’s hospitality sector is expanding at a significant pace, with a projected requirement of an additional 61.31 lakh workers by 2036–37, as mentioned in a report by the Confederation of Indian Industry (CII) and EY. While this growth is nationwide, it is particularly pronounced in tier-2 and tier-3 cities, driven by several factors—including the emergence of regional tourist destinations, the rise of new hospitality ventures, and improved transport infrastructure.
This article examines the key drivers of hospitality sector growth in these cities, highlights the in-demand job roles emerging from this trend, and offers actionable insights and recommendations for job seekers, entrepreneurs, and policymakers to leverage the opportunities in India’s booming hospitality sector.
Trends Influencing Hospitality Sector Growth in Tier-2 and Tier-3 Cities
Tourism surge in smaller cities
A study by the World Travel and Tourism Council (WTTC) highlights that international visitor spending in India reached a record ₹3.1 trillion in 2024. Additionally, Jones Lang LaSalle (JLL) Property Consultants India reports that approximately 42,071 key check-ins were made at top-branded hotels in 2024, with 77% concentrated in tier 2 and tier 3 cities. These figures reveal the growing prominence of tourism in India and the emergence of new regional hotspots beyond traditional metropolitan centres.
Favourable investment ecosystem
Research by Hotelivate reveals that hotels in tier-3 cities recorded higher Average Daily Rates (ADR) than those in tier-2 cities during the 2023–24 period. Cities such as Mathura, Bikaner, and Amritsar have benefitted from lower operating and land costs, coupled with greater pricing power. This combination reduces investment risk while catering to local demand, ultimately contributing to stronger Returns on Investment (ROI) when compared to metropolitan cities.
Event-driven demand
Weddings, festivals, and corporate events are increasingly being hosted in tier-2 and tier-3 cities, largely due to their cost advantages over metros. These events, in turn, generate localised demand for event planners, catering services, and other hospitality professionals.
Strong transport network
Transport Infrastructure upgrades are also playing a pivotal role. The development of new airports, expanded road networks, and improved railway connectivity is boosting visitor inflows, further stimulating demand for local talent across various hospitality services.
In-demand Careers and Certifications for Job Seekers
India’s rapidly expanding hospitality sector is creating exclusive opportunities for both freshers and experienced professionals across hotels, restaurants, travel & tourism, and event management.
Key job roles
- Receptionist / Front Office Associate
- Housekeeping Staff & Supervisors
- Food & Beverage (F&B) Service Staff / Managers
- Cooks / Chefs
- Revenue Managers & Yield Analysts
- Sales & Events / Banquet Managers
- Digital & Reservations / OTA Distribution Specialists
- Drivers & Transport Support Staff
Hiring managers consistently look for soft skills such as customer service, communication, attention to detail, problem-solving, and teamwork, alongside technical skills for the above roles.
Recommended certifications
To strengthen career prospects in the hospitality sector, aspiring professionals can pursue industry-recognised certifications, such as:
- Certified Professional in Hospitality, Travel & Aviation (CPHTA) – The Hotel School, Delhi
- Diploma in Front Office Services – Clarks Centre for Hotel Management Studies (CCHMS)
- Front Office Assistant Certificate – Lords Institute of Management (LIM) in collaboration with THSC
- Certificate Course in Tourism & Hospitality – NSDC Skill India under the PMKVY scheme
- Hotel Management / Culinary & Hospitality Courses – MIHMC (Mysore International Hospitality & Management College).
Insights for Business Owners
- Leverage Asset-Light Models: Consider franchising, management contracts, or partnerships with established hotel chains to minimise investment risks. Leading brands like Marriott, Hilton, and Taj actively operate through franchise and management models, enabling faster growth for local businesses.
- Target High-Growth Niches: Focus on attractive and profitable segments such as wedding tourism, religious travel, medical tourism, and eco-tourism, which are seeing rising demand in tier-2 and tier-3 cities.
- Diversify Revenue Streams: Move beyond traditional room bookings by expanding into food & beverage outlets, banquets, co-working spaces, wellness centres, and spa services to multiply revenue sources.
- Invest in Local Talent: Collaborate with THSC/NSDC to implement skill development programs that ensure access to a well-trained local workforce that can transform business growth.
- Embrace Digital Transformation: Adopt online travel agency (OTA) distribution platforms, revenue management systems, and social media marketing to enhance brand visibility and optimise pricing power.
- Tap into Government Incentives: Stay informed about tourism subsidies, Employment-Linked Incentive (ELI) scheme benefits, and Public-Private Partnership (PPP) opportunities to support long-term business growth.
Insights for Government and Policymakers
- Boost Regional Connectivity: Invest in airports, roadways, and railways to improve accessibility and attract tourists to tier-2 and tier-3 cities.
- Expand Hospitality Skilling Programs: Strengthen initiatives like THSC and Skill India, while incentivising small and emerging businesses to train and employ local youth.
- Enhance Ease of Doing Business: Provide tax incentives, land subsidies, and single-window clearance mechanisms to encourage new hospitality projects.
- Promote Sustainable Tourism: Introduce policies that support eco-friendly hotels, heritage conservation, and the growth of green tourism.
Tier-2 and tier-3 cities are rapidly becoming the new pillars of India’s hospitality boom, driven by rising tourism, favourable investment economics, regional events, and improved transport infrastructure. This growth is creating diverse career opportunities—from front office and housekeeping roles to revenue management and digital reservations for the aspiring local talents.
For business owners, smaller cities offer scalable opportunities through niche markets, asset-light models, and diversified revenue streams, supported by digital tools and government incentives. Policymakers can sustain this momentum by promoting skill development, simplifying business processes, encouraging sustainable tourism, etc, that would position India’s hospitality industry as a major engine for job creation in the future.
