Why Hilton calls this Asian country the fastest-growing tourism market

In this article HLT Hilton is betting India will become one of the world's largest hotel markets as it ramps up business throughout Asia-Pacific.

"India is the most exciting market for travel and tourism globally, and will be for the next decade," Alan Watts, Hilton's president of Asia Pacific, said on CNBC's "Inside India." He predicted India will become "the third-largest lodging market on the planet."

The bullish India outlook comes as weakness in Chinese consumer confidence weighs on Hilton's regional performance. Asia-Pacific revenue per available room, or RevPAR, rose just over 1% in the second quarter, which Watts said was "entirely related to the business in China," which has been hurt by low consumer confidence outside holiday periods.

Hilton's other four Asia markets are "well up," he said, with double-digit RevPAR growth in both North Asia and India. "We're seeing strong momentum across a number of Asia Pacific markets, including Southeast Asia and Japan," Watts said in a separate interview. "One of the most important trends shaping our business is the strength of intra-Asia travel.

Today, around eight out of every 10 room nights in the region are generated by travelers from within Asia, which gives us great confidence in the resilience and long-term growth prospects of the market." Religious tourism is one part of the strategy. Watts said there is "almost no branded supply" at India's pilgrimage destinations like Ayodhya and Tirupati, even though they draw enormous crowds.

What's more, Indian real estate owners are funding the build-out themselves, Watts said. "They're of course coming to us to manage their properties, but we haven't been asked for balance sheet commitment."

Hilton has 60 hotels in various stages of construction in India and commitments for 400 more with major partners, as the company pivots from flagship properties in tier-one cities to mid-scale brands such as Hampton and Spark by Hilton, aimed at domestic travelers in tier-two and tier-three cities. Hilton also sees potential in many levels of the business throughout the region.

"We see opportunity at all price points, and continue to benefit from rapid infrastructure investments, paired with rising consumer appetite for travel, expanding middle classes and improving connectivity across the region," Watts said. -CNBC's Joanna Ossinger contributed to this article.