FreepikThe Rise of the Airport City as India's New Economic Engine
New data shows how airport ecosystems are generating billions in GDP and outperforming city hotels with higher occupancy rates
November 25, 2025Real Estate
Written by:Jorge Aguinaga
Key Takeaways
- Airports are evolving into mini cities that act as major economic engines, with the Bangalore ecosystem alone contributing 5.2% to the state's GDP and supporting an employment ecosystem of 285,000 people.
- Demand for on-campus real estate is surging, with projections for 5,200 hotel keys by 2035 and data showing airport hotels command 20% higher rates than city properties.
- These hubs are becoming lifestyle destinations featuring luxury retail streets, health tourism districts, and urban forest office parks, all connected by walkable infrastructure.
For decades, the airport was viewed strictly as a utility to transport people from point A to point B, but a radical shift is now transforming Indian aviation hubs into massive, self-contained economic engines known as “airport cities”.
This new asset class goes far beyond simply adding a hotel next to a terminal, as developers are building fully integrated mini-cities that drive regional growth on a massive scale.
The economic impact is immense, exemplified by the airport city currently under development as part of the Bangalore airport ecosystem, which spans 4,000 acres, supports the employment of 285,000 people, and contributed an impressive 5.2% to the state's entire GDP.
Beyond retail, these hubs are becoming hotspots for culture and wellness, with plans underway for a health tourism district to serve international visitors seeking medical care and large-scale entertainment facilities, such as a 12,000-seat arena, which transforms the location into a leisure hub for locals who aren't even flying.
The projections are aggressive, estimating a need for 5,200 hotel keys by 2035, a figure supported by performance data showing airport hotels currently clocking occupancy rates above 80% and commanding average daily rates that are 20% higher than their city-centre counterparts.
Simultaneously, the office sector is replacing sterile environments with concepts like the urban forest business park, where up to 28 million square feet of workspace is integrated with nature and connected by walkable infrastructure so executives can move from terminal to office without ever needing a car.
As India's aviation market expands and major metros like Mumbai and Delhi add second airports, the model of the airport as a standalone economic city is set to become a dominant theme for institutional investment.
These strategic insights were shared during the panel discussion on the "Strategic Blueprint of Retail & Hospitality's Evolution - Branded Vs. Boutique & Global Investor Preferences".
The session was moderated by Pankaj Renjhen, COO, ANAROCK Retail, and featured reflections from leading experts including Anshu Sarin, Chief Executive Officer, 91 Springboard; Karthik Krishna, Co-founder & Managing Partner, EverVantage; Rahul Pandit, MD & CEO, Advent Hotels International; Rajneesh Mahajan, CEO, Inorbit Malls; Ranvir Bhandari, President, Miros Hotels & Resorts; Rao Munukutla, CEO & Executive Director, BACL; and Zubin Saxena, Sr. Vice President, Region Head – South Asia, Hilton.
Access the full takeaways and C-level insights in the exclusive India GRI 2025 Spotlight.
This new asset class goes far beyond simply adding a hotel next to a terminal, as developers are building fully integrated mini-cities that drive regional growth on a massive scale.
The economic impact is immense, exemplified by the airport city currently under development as part of the Bangalore airport ecosystem, which spans 4,000 acres, supports the employment of 285,000 people, and contributed an impressive 5.2% to the state's entire GDP.
A Destination, Not Just a Gateway
The fundamental philosophy is that the airport must become a destination in its own right, expanding its vision far beyond traditional duty-free shopping to include Fifth Avenue style luxury retail streets where visitors can enjoy a high-end experience comparable to major city centres.Beyond retail, these hubs are becoming hotspots for culture and wellness, with plans underway for a health tourism district to serve international visitors seeking medical care and large-scale entertainment facilities, such as a 12,000-seat arena, which transforms the location into a leisure hub for locals who aren't even flying.
The Hospitality and Office Boom
This transformation is driving unprecedented demand for real estate within the campus, as annual passenger numbers in hubs like Bangalore surge toward a projected 110 million by 2032, necessitating a massive expansion of accommodation.The projections are aggressive, estimating a need for 5,200 hotel keys by 2035, a figure supported by performance data showing airport hotels currently clocking occupancy rates above 80% and commanding average daily rates that are 20% higher than their city-centre counterparts.
Simultaneously, the office sector is replacing sterile environments with concepts like the urban forest business park, where up to 28 million square feet of workspace is integrated with nature and connected by walkable infrastructure so executives can move from terminal to office without ever needing a car.
The Investor Takeaway
The Airport City represents a new frontier in Indian real estate, offering a high-yield, mixed-use ecosystem that outperforms traditional city assets in both occupancy and rental rates.As India's aviation market expands and major metros like Mumbai and Delhi add second airports, the model of the airport as a standalone economic city is set to become a dominant theme for institutional investment.
These strategic insights were shared during the panel discussion on the "Strategic Blueprint of Retail & Hospitality's Evolution - Branded Vs. Boutique & Global Investor Preferences".
The session was moderated by Pankaj Renjhen, COO, ANAROCK Retail, and featured reflections from leading experts including Anshu Sarin, Chief Executive Officer, 91 Springboard; Karthik Krishna, Co-founder & Managing Partner, EverVantage; Rahul Pandit, MD & CEO, Advent Hotels International; Rajneesh Mahajan, CEO, Inorbit Malls; Ranvir Bhandari, President, Miros Hotels & Resorts; Rao Munukutla, CEO & Executive Director, BACL; and Zubin Saxena, Sr. Vice President, Region Head – South Asia, Hilton.
Access the full takeaways and C-level insights in the exclusive India GRI 2025 Spotlight.