As India moves closer to the Union Budget 2026, stakeholders across the hospitality and travel-tech ecosystem are calling for structural reforms to sustain domestic travel growth and strengthen tourism-led development. With improving hotel occupancies and rising demand for alternative accommodations such as homestays and BnBs, the sector believes consistent policy support can help maintain momentum across emerging destinations.

Highlighting the growing role of digital booking platforms, Vinesh Gupta noted that online hotel and alternative accommodation platforms are becoming key enablers of destination-led tourism, particularly in Tier II and Tier III cities. He emphasised the need for further GST rationalisation on hotel rooms, especially in the mid-scale segment, to ensure affordability for travellers and price consistency across hotels and alternative accommodation providers.

“As we look ahead to the Union Budget 2026, the online hotel and alternative accommodation booking ecosystem is playing an important role in supporting India's domestic and destination-led travel growth. With hotel occupancies improving and demand for homestays and BnBs rising across Tier-II and Tier-III cities, continued policy support can help sustain this momentum,” Gupta said.

He added that GST reforms would not only benefit consumers but also encourage better quality stays across destinations. As a travel-tech platform preparing to expand into flight bookings, Gupta said government support for digital travel platforms, integrated booking experiences, and skill development across tourism services would improve transparency, customer choice, and overall travel accessibility for Indian travellers.

Echoing similar concerns from the broader hospitality investment perspective, Vinesh Gupta pointed out that despite strong operating performance driven by robust travel demand, returns on investment continue to face pressure due to the sector’s capital-intensive nature and high acquisition costs.

“Introducing tax incentives on capital expenditure and granting the long-awaited infrastructure status would provide a significant boost. This would unlock access to long-term institutional credit at competitive repo-linked or international benchmark rates, thereby easing the cost of capital and fuelling sustainable growth,” he said.

He further highlighted the need for stronger government-led manpower development and training initiatives to address the widening skills gap within hospitality. In addition, strengthening aviation connectivity and expanding the domestic airline network were cited as critical factors in opening new travel corridors and reinforcing India’s position as a leading global tourism destination.

With domestic tourism continuing to grow and digital platforms reshaping how Indians travel, industry leaders believe Budget 2026 presents a timely opportunity to align policy reforms with the sector’s long-term growth potential.

With the Union Budget 2026 approaching, India’s hospitality sector is looking to the government for meaningful reforms that can support long-term, sustainable growth. Industry leaders believe the coming year presents a crucial opportunity to strengthen tourism-led economic development, especially as travel preferences continue to evolve.

According to Ms. Amrita Gupta, Director of Manglam Group and CEO of Manglam Spa and Resorts, demand entering 2026 is being driven by experiential travel, destination weddings, and wellness-focused stays. This shift, she notes, highlights the need for policy support that encourages quality-led investments rather than short-term expansion.

“The coming year presents an important opportunity for India's hospitality sector to scale sustainably while deepening its contribution to tourism-led economic growth,” said Gupta. She added that reforms such as granting tourism industry status, rationalising GST, and improving access to infrastructure and green financing could significantly strengthen the sector.

Gupta also highlighted the importance of destination-specific support, particularly for heritage cities like Jaipur. Targeted budgetary allocation for tourism infrastructure, heritage-sensitive development, and sustainable hospitality projects, she said, would help improve global competitiveness while preserving cultural identity.

As India continues to position tourism as a key economic driver, industry voices believe that balanced policy measures in Budget 2026 could play a decisive role in ensuring inclusive growth, employment generation, and long-term resilience for the hospitality sector

The tourism and hospitality sector currently faces a critical moment as India prepares for its Union Budget 2026. The sector which emerged as a major force for economic recovery and job creation and regional development now seeks permanent changes through structural policy reforms instead of temporary benefits. Industry leaders believe that with the right fiscal and regulatory support, tourism and hospitality can evolve from being viewed purely as a service segment to becoming a key infrastructure and growth driver for the country.

Sharing his expectations, Dinesh Yadav, Founder and MD of Fine Acers, highlights the urgent need for comprehensive policy support to match the sector’s rapid expansion, “As we approach Budget 2026, the hospitality sector is looking for structural policy support that reflects its growing economic contribution and long-term capital intensity. The industry is experiencing a significant expansion, with the projected CAGR being about 10-11%. This growth is mainly owing to the attraction of domestic tourists, the MICE sector and the swift advent of experiential travel in Tier II and III destinations. On the other hand, if the industry wants to keep the same pace, it needs a complete policy overhaul and not just short-term remedies.

One of the long-awaited measures is to give the whole hospitality industry, rather than just selected parts, the status of an infrastructure. This move would pave the way for the access of long-term and low-cost funding which is vital for the completion of the projects that have long gestation periods. Besides this, the GST reform especially concerning room rates and bundled hospitality services where the high tax rates still pose a threat to price competitiveness and thus indirectly to occupancy-led growth, is peremptory.

New forms of ownership and financing, like the sale-leaseback model, should be more clearly recognized in terms of policy. These models help developers recycle capital, improve balance sheets and attract institutional participation. Simplifying approvals granting single-window clearances and standardizing compliance procedures across states, which would lead to a significant reduction in the time and cost involved in project execution. Even more, the tourism sector, which has been the main recipient of Budget 2026, can really reposition hospitality not only as a service industry but also as one of the main infrastructure drivers of India's growth story." Yadav Added

Govind Gaur, CEO, WanderOn

Echoing similar sentiments from the travel segment, Govind Gaur, CEO, WanderOn, underscores the importance of domestic tourism and infrastructure-led growth, “As we look ahead to the upcoming Union Budget 2026, the travel and tourism sector hopes for continued emphasis on growth, infrastructure and strengthening of consumer confidence. 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.

The industry is also looking forward to an ‘Industry status’ to travel and tourism, which would enable easier access to credit and lower financing costs. If these measures are addressed in Budget 2026, travel would become more affordable for consumers, enhancing margins and boosting the circular economy.”

Dr Vikas Katoch, Founder and CEO, Adotrip

From a digital travel and destination discovery perspective, Dr Vikas Katoch, Founder and CEO, Adotrip, stresses the need for GST rationalisation, easier financing, and continued support for sustainable tourism initiatives, “As India’s travel industry continues with its robust recovery, we expect budget 2026 to rationalize GST for the sector. It is also important to make compliance more seamless, improve credit access so that financing can become easier. Addressing these will benefit both consumers and businesses, as travel and hospitality will become more affordable for them, businesses can get a change to innovate and grow and there will be healthy competition in the market.

The government’s further support for sustainable tourism, heritage circuits, and domestic travel promotion will be critical in diversifying demand across regions. 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.”

Budget 2026 gives India a chance to transform its tourism and hospitality industry according to the expert opinion of industry professionals. The sector seeks reforms which will create sustainable growth through industry recognition and infrastructure status and simplified GST rules and better financing options and support for new ownership models. The upcoming budget needs strategic policy changes because domestic tourism is increasing and international interest in India is growing, which will establish tourism and hospitality as a key driver of India's economic and job growth.