Budget 2026 Expectations: Travel & Tourism Sector Seeks Structural Reforms to Drive Growth
The travel, tourism, and hospitality sector in India is actively seeking comprehensive structural reforms from the upcoming Union Budget 2026 to sustain its growth trajectory. Stakeholders across the industry emphasize that this is a critical juncture, as the sector has emerged as a major catalyst for economic recovery, regional development, and job creation. They believe that strategic and structural reforms are essential to address existing fiscal and regulatory gaps, which could propel the industry from being purely service-based to becoming a key infrastructure and growth driver for the nation.
Industry Leaders Voice Their Expectations
According to Vishal Suri, MD and CEO of SOTC Travel, Union Budget 2026 presents a significant opportunity to strengthen India’s tourism foundations and accelerate growth. He highlighted that reducing indirect taxes would enhance affordability, boost global competitiveness, and encourage tourism. Abhishek Sahai, General Manager of Conrad Pune, echoed this sentiment, noting that the budget offers another chance to further fortify India's travel and tourism sector.
Harshavardhan Neotia, Chairman of Ambuja Neotia Group, pointed out that a forward-looking budget that continues to prioritize infrastructure, urban development, healthcare, education, and tourism will strengthen both economic confidence and social foundations. This holistic approach is seen as vital for long-term sustainability.
Key Demands from the Tourism Sector
Stakeholders across various segments of the Indian tourism sector feel that Union Budget 2026 has the potential to transform the industry. The primary demands include:
- Simplified goods and services tax (GST) rules to reduce complexity and enhance competitiveness.
- Better financing models and support for new ownership structures to foster innovation.
- Granting 'Industry Status' to the tourism sector to unlock its full potential and facilitate growth.
Overall, stakeholders also noted the importance of robust domestic tourism and increasing interest from international travelers, which can help establish tourism and hospitality as a key driver of India's economic and job growth.
Specific Recommendations for Policy Overhaul
Mahesh Iyer, MD and CEO of Thomas Cook (India), emphasized the need for a review of visa policies, including faster e-visa processing, expanded e-visa categories, and targeted visa-on-arrival schemes. He also called for enhanced allocation for global marketing campaigns like Incredible India to boost inbound tourism.
Dinesh Yadav, Founder and MD of Fine Acers, noted that the industry is expanding at a projected 10-11% CAGR. He stressed, “If the industry wants to maintain this pace, it requires a complete policy overhaul rather than just short-term remedies.”
Unlocking Potential Through Infrastructure and Reforms
Iyer further elaborated that the budget could “unlock” the sector's full potential by advocating for industry status, affordable financing, lower interest rates, and institutional credit—particularly for MSMEs. He added, “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 accelerate development.”
Sahai also pushed for government funding to improve tourism infrastructure and facilities for both domestic and international travelers, alongside granting industry status.
GST and TCS Reforms: A Call for Simplification
SOTC's Suri provided specific recommendations for GST procedural reforms, suggesting an option for Centralized Registration, seamless single returns, and reporting across all states to achieve a truly 'Good and Simple Tax' system. He also proposed replacing the complex multi-tier TCS structure with high tax rates (5%/20%) with a universal 1% rate. This would ensure a clear audit trail for tax authorities while avoiding unnecessary cash or liquidity blockage for travelers.
Yadav supported these views, advocating for GST reform, especially concerning room rates and bundled hospitality services where high tax rates threaten price competitiveness. He also emphasized the need for new forms of ownership and financing, such as the sale-leaseback model, a single-window clearance system, and standardized compliance procedures across states.
Domestic Tourism: The Backbone of Growth
Govind Gaur, CEO of WanderOn, underscored the importance of domestic tourism and infrastructure-led growth. He stated, “Domestic tourism can become the backbone of India’s tourism landscape if the government focuses more on increased infrastructural connectivity, expansion of airports, and improving rail travel.”
Elton Rodrigues, Director of HostMyTrips, concurred, highlighting that better roads, improved rail and air connectivity, and enhanced facilities at tourist destinations can make travel easier and more affordable for Indian travelers.
Vikas Katoch, Founder and CEO of Adotrip, stressed the need for policy support for sustainable tourism, heritage circuits, and domestic travel promotion. He added, “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.”
International Tourism: Enhancing Inbound and Outbound Flows
Ravi Gosain, President of the Indian Association of Tour Operators (IATO), noted the “great potential” for inbound tourism but emphasized that focused financial support is imperative. He suggested elevating international marketing priorities and setting up an “India Tourism Promotion Board” dedicated to promoting India globally.
On the outbound front, Wilfred Selvaraj, MD of LGT Holidays, pointed out that high GST on tour packages and a 20% TCS on overseas tour programs have increased travel costs for consumers. He called for a balanced approach to strengthen inbound tourism while rationalizing GST, moderating TCS rates, and simplifying remittance norms for outbound travel to support formalization and improve competitiveness.
Looking Forward to a Reform-Led Budget
Nikhil Sharma, MD and COO, South Asia of Radisson Hotel Group, highlighted that the sector contributes nearly 7–8% to India’s GDP. However, sustaining this momentum requires policy frameworks that recognize hospitality as productive economic infrastructure rather than discretionary consumption.
Aviral Gupta, CEO at Zo World and Zostel, concurred 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 prioritize long-pending skilling reforms, including industry-aligned curriculum, modernized training with digital and AI-integrated modules, and stronger PPP models to boost employability.
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.” He added that policy coordination between the center and states—bringing tourism into the concurrent list—is crucial to achieving a $1 trillion contribution to GDP from the sector.
