Budget 2026 expectations: The travel, tourism and hospitality sector in India is seeking structural reforms from Union Budget 2026 in order to sustain growth.
Noting that this is a critical time, stakeholders feel that the sector has emerged as a major for economic recovery, regional development and jobs creation, and needs structural and strategic reforms to address fiscal and regulatory gaps. They added that this could lead the move for the sector from being purely service based to becoming a key infrastructure and growth driver for the country.
According to Vishal Suri, MD and CEO of SOTC Travel, Union Budget 2026 is a chance to strengthen India’s tourism foundations and accelerate growth.
“Budget presents yet another opportunity to further strengthen India’s travel and tourism sector. Reducing indirect taxes would increase affordability, boost global competitiveness, and encourage tourism,” Abhishek Sahai, General Manager of Conrad Pune said.
Harshavardhan Neotia, Chairman of Ambuja Neotia Group noted that a forward-looking Budget that continues to prioritise infrastructure, urban development, healthcare, education, and tourism will strengthen both economic confidence and social foundations.
Tourism sector has high expectations from Budget 2026
Stakeholders across various segments of the Indian tourism sector feel that Union Budget 2026 has a chance to transform the industry. For this, the biggest demands are simplified goods and services tax (GST) rules, better financing models, and support for new ownership models.
Overall, stakeholders also noted the importance of heavy domestic tourism and increasing interest from international travelers, which can also help establish tourism and hospitality as a key driver of India’s economic and job growth.
Mahesh Iyer, MD and CEO of Thomas Cook (India) noted the need for review of visa policies (faster e-visa processing, expanded e-visa categories, targeted visa-on-arrival schemes), and enhanced allocation for global marketing campaigns like Incredible India.
Dinesh Yadav, Founder and MD of Fine Acers noted that the industry is expanding at a projected 10-11% CAGR, adding, “If the industry wants to keep the same pace, it needs a complete policy overhaul and not just short-term remedies.”
Unlock full potential: ‘Strengthen India’s tourism foundations’
Iyer feels that the Budget could “unlock” the sector’s full potential. He called for industry status, while also highlighting the need for affordable financing, lower interest rates, and institutional credit—particularly for MSMEs.
“Investments in infrastructure across under-served regions, spiritual destinations, and Tier II/III cities — combined with a single-window clearance system for hospitality projects — will serve to accelerate development,” he added.
Sahai also pushed for government funding for improved tourism infrastructure and facilities for domestic and international travelers, and industry status.
Further, SOTC’s Suri had the following recommendations:
- GST Procedural Reforms: After GST 2.0, it is time to implement an option for Centralized Registration, seamless single returns and reporting across all states and procedural simplification to achieve a truly ‘Good and Simple Tax’ system.
- Flat 1% TCS: Replace the complex multi-tier structure with high tax rates (5%/ 20%) with a universal 1% rate. This ensures a clear audit trail of information to the tax department and enforcement authority, while avoiding needless cash/ liquidity blockage at travellers’ end.
- Industry Status: Grant ‘Industry Status’ to the tourism sector to unlock its potential and facilitate growth.
Meanwhile, Yadav also batted for “industry status, GST reform (especially concerning room rates and bundled hospitality services where the high tax rates still pose a threat to price competitiveness, new forms of ownership and financing (e.g. sale-leaseback model), single-window clearance system, and standardised compliance procedures across states”.
Domestic tourism: The big driver in India
Govind Gaur, CEO, WanderOn underscored the importance of domestic tourism and infrastructure-led growth, “Domestic tourism can become the backbone of India’s tourism landscape, if the government focuses more towards increased infrastructural connectivity, expansion of airports and improving rail travel.”
Elton Rodrigues, Director of HostMyTrips concurred that one of the key areas that needs attention is tourism infrastructure development. “Better roads, improved rail and air connectivity, and enhanced facilities at tourist destinations can make travel easier and more affordable for Indian travellers.”
Vikas Katoch, Founder and CEO of Adotrip stressed the need of policy support for sustainable tourism, heritage circuits, and domestic travel promotion. “The government has already demonstrated strong intent through sustained investments in infrastructure, destination branding, and tourism-led regional development. Building on this momentum in Budget 2026 can help India unlock significantly higher economic value, employment generation, and inclusive growth through tourism,” he added.
Husain Khatumdi, MD and co-founder of EkoStay also backed the thought that continued investment in tourism infrastructure, regional connectivity, and destination promotion is equally critical, especially for unlocking Tier II and Tier III markets.
Wilfred Selvaraj, MD of LGT Holidays feels that on the outbound tourism front, the current tax and regulatory framework continues to challenge organised travel players. “High GST on tour packages and a 20% TCS on overseas tour programs have materially increased travel costs for consumers. Additionally, foreign spending caps and compliance complexities under the LRS further constrain seamless outbound travel. A balanced approach, strengthening inbound tourism to enhance foreign exchange inflows while rationalising GST, moderating TCS rates, and simplifying remittance norms for outbound travel will support formalization, improve competitiveness, and drive sustainable long-term growth of India’s travel and tourism ecosystem,” Selvaraj feels.
International tourism on the growth path: How can Budget support?
Ravi Gosain, President of the Indian Association of Tour Operators (IATO) feels that there is “great potential” for inbound tourism, but focused financial support is imperative.
“For Brand India, international marketing (primarily between long haul and emerging source markets) should be elevated in priority. Setting up the “India Tourism Promotion Board” dedicated to promoting India will be a great step in this direction. Worldwide promotion adequately funded would be an important step forward,” Gosain said.
He also pointed to the need for rationalised GST for tourism services, e-visa facilities and increased benefits for improving international air connectivity to Tier-2 and Tier-3 destinations.
Vishal Puri, Co-Founder of Spalba suggested that an “UDAN-like framework for tourism and accommodation can help unlock destinations that have demand potential but lack enabling infrastructure”. He also suggested targeted incentives for hotels and homestays, improved last-mile connectivity, and affordable financing for local operators from government to help increase footfall in emerging tourism circuits.
Industry looking forward to a ‘reform-led budget’
Nikhil Sharma, MD and COO, South Asia of Radisson Hotel Group noted that the sector contributes nearly 7–8% to India’s GDP, but sustaining this momentum requires policy frameworks that recognise hospitality as productive economic infrastructure rather than discretionary consumption.
Aviral Gupta, CEO at Zo World and Zostel conurred that simplified regulatory frameworks for hospitality-led MSMEs “can unlock significant employment while helping India build globally competitive travel brands rooted in local culture”.
Jyoti Mayal, Chairperson of Tourism and Hospitality Skill Council, expects the government to prioritise long-pending skilling reforms. This includes industry-aligned curriculum, modernised training with digital and AI-integrated modules, regional hospitality skill centres, streamlined apprenticeship pathways, and stronger PPP models to boost hands-on training, employability, and wage growth for youth.
Shwetank Singh, Executive Director of Chalet Hotels noted, “India’s hospitality sector waits with measured optimism. We’ve created 46.5 million jobs and are projected to support 64 million by 2035, yet do not get classified as infrastructure which is a looming constraint on scale.”
Singh added that policy coordination between center and states — bringing tourism into the concurrent list — is important. Noting, “The pathway to $1 trillion contribution to the GDP from the sector would then be closer to reality.”
