The hospitality sector in India is experiencing a significant yet subtle change—transforming traditional categories like budget, mid-scale, and luxury into a more fluid concept: intent-driven travel.
At the heart of this change is a new type of traveller who defies clear categorizations. A single customer might choose a social hostel, a comfort-focused hotel, and a boutique luxury stay—all during one journey.
“The change in Indian travel habits is now a structural shift rather than just anecdotal evidence,” explains Abhishek Khandelwal, Co-Founder of Moustache. “Travelers no longer fit into rigid classifications like budget or luxury; they are selecting accommodations based on the goals for each segment of their trip.”
The emergence of ‘situational travel’
This change in behaviour—often referred to as situational travel—is reshaping how hospitality brands create, price, and position their products.
“The key development is that hostels are increasingly chosen for the experiences they provide, not merely their price,” Khandelwal notes, highlighting a hostel market already worth over ₹1,400 crore and expanding beyond metropolitan areas.
The consequences of this shift are extensive. Traditional segmentation based on pricing tiers is losing relevance.
“Categories like budget, mid-scale, and luxury will persist because pricing is still a significant factor, but they no longer sufficiently explain consumer choices,” he adds.
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Experience prioritized over price—but with complexity
While it may be tempting to view this change as a transition from price to experience, the truth is more nuanced.
“Travellers are not disregarding price or location; rather, they are evolving beyond them. What’s shifting is that price must now align with experiential value,” Khandelwal remarks.
This evolution is further fueled by digital habits. Social media, mobile-centric bookings, and real-time discovery are bridging the gap between inspiration and action. Almost 40% of travellers book immediately after encountering travel content online, with mobile bookings dominating last-minute choices.
The outcome: a traveller who is more informed and intentional.
Multi-format as the new strategy
This shift necessitates a strategic reevaluation for hospitality companies.
Moustache, originally a hostel-centric brand established in 2016, has since diversified into a three-tier system—Hostels, Select (mid-market), and Luxuria (boutique premium).
“Our expansion was driven by the realization that Indian travel demand is no longer linear,” states Co-Founder Deepak Agarwal. “People are travelling more frequently, but not always for identical reasons, nor with the same expectations regarding their accommodations.”
This multi-format strategy enables brands to cater to various demand segments while maintaining a cohesive identity.
“We’re creating a hospitality platform where the offerings adapt to travel needs while the brand commitment remains constant,” Khandelwal explains.
Mid-market and premium segments gaining traction
Though all segments are on the rise, the strongest momentum is seen in mid-market and premium experiential stays.
“Mid-market is particularly robust because it intersects comfort, reliability, and value,” Agarwal comments.
At the same time, demand in the premium sector continues to exceed supply, enhancing pricing power at the top end. Boutique hospitality is projected to grow significantly, driven by increasing demands for privacy, design, and destination-oriented experiences.
Clarity as a competitive edge
In a crowded digital landscape, where travellers sift through numerous choices in mere seconds, clear brand messaging is becoming a key differentiator.
“If a brand fails to clearly articulate its target audience, it risks being overlooked,” Khandelwal warns.
The recent restructuring of Moustache into well-defined verticals was designed to address this challenge.
“This three-tier system alleviates decision-making stress, clarifies what each format represents, and simplifies the process for guests to identify the accommodation that best suits their journey.”
The broader perspective
With India’s hotel market expected to grow substantially in the coming years, the sector is trending towards refined segmentation, distributed demand across emerging locales, and increased premiumisation.
Yet fundamentally, the shift is behavioural.
“The defining trend will be the rise of intent-driven travel, where individuals select trips based on desired experiences, rather than just destinations,” concludes Khandelwal.
For hospitality providers, this indicates one critical truth: simply selling rooms is no longer sufficient. The future belongs to those who can offer experiences that resonate with the travellers’ intents.
