Tourism and hospitality stocks traded with a positive bias on Wednesday after the Union Budget 2026-27 unveiled a fresh set of measures aimed at strengthening India’s tourism ecosystem. The announcements placed strong emphasis on medical tourism, skilling initiatives, and institutional capacity building, boosting investor confidence across travel and hospitality counters.

Shares of Indian Hotels Company gained 1%, while EIH rose 2%. Market analysts noted that medical tourism is emerging as a steady and high-margin segment, with the potential to increase room demand in metro and tier-1 cities over time, particularly for premium hotel brands.

Mid-segment hospitality players outperformed broader markets, with Lemon Tree Hotels jumping 6% and ITC Hotels rising 1%. Investors appeared optimistic about broader-based demand from both domestic and international travellers. The budget proposals were also seen as supportive of long-term capacity expansion, especially with increased encouragement for private participation alongside state-led initiatives.

On the travel services front, Easy Trip Planners surged 9%, emerging as the top gainer among tourism-related stocks. Investors are factoring in higher booking volumes driven by improved tourist infrastructure, better last-mile connectivity, and the government’s focus on destination branding and global market linkages through initiatives such as ODOP.

Mahindra Holidays also advanced 3%, supported by expectations that stronger domestic tourism and skilling initiatives will drive sustained growth in leisure travel. Meanwhile, Thomas Cook (India) slipped 2%, largely due to profit booking after recent gains, even as the broader policy direction under Budget 2026 remains supportive for organised travel companies.

Overall, the market reaction highlights growing optimism that the Union Budget 2026-27 could usher in a new growth phase for India’s tourism and hospitality sector, benefiting hotels, travel platforms, and allied service providers.

The Budget 2026-27 has emerged as a significant boost for India’s tourism and hospitality sector, with Finance Minister Nirmala Sitharaman highlighting tourism as a key driver of employment generation and foreign exchange earnings. The budget outlines a wide range of initiatives aimed at improving infrastructure, affordability, sustainability, and skill development across the sector.

Presenting the budget in Parliament, Sitharaman announced that 15 archaeological sites across the country will be developed into vibrant and experiential cultural destinations. These sites will feature curated walkways, allowing the public to explore excavated landscapes while enhancing cultural tourism experiences.

A major highlight of the budget is the reduction in Tax Collected at Source on international tour programmes. The TCS has been brought down from the existing 5% and 20% rates to a flat 2%, with no minimum amount condition, making international travel more affordable for Indian travellers.

The government also announced the creation of five tourism hubs across the Purvodaya states of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. As part of this initiative, provisions will be made for 4,000 e-buses to improve connectivity and promote sustainable transportation.

To strengthen tourism education and industry collaboration, Sitharaman proposed the establishment of a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology. The institute will act as a bridge between academia, industry, and government. In addition, a pilot scheme will be launched to train tourist guides across major tourism hubs in India.

Sustainable and nature-based tourism also received focused attention in the budget. Ecologically sustainable mountain trails will be developed in Himachal Pradesh, Uttarakhand, Jammu and Kashmir, Araku Valley in the Eastern Ghats, and Pothigai Malai in the Western Ghats. Bird tourism development projects will also be initiated in Pazhaverkadu in Tamil Nadu. Further, turtle trails will be created along key nesting sites in Odisha, Karnataka, and Kerala.

Spiritual tourism is set to gain momentum under Budget 2026, with announcements for state-of-the-art infrastructure development, including meditation centres and enhanced facilities at spiritual destinations across the country.

The budget also places strong emphasis on connectivity and mobility. Seven high-speed rail corridors will be developed between key city pairs, including Mumbai–Pune, Hyderabad–Pune, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi, and Varanasi–Siliguri. These corridors are envisioned as growth connectors supporting environmentally sustainable passenger transport.

In a move to promote medical and wellness tourism, the government announced the development of five new regional medical hubs in partnership with private players. A hub for medical value tourism will also be established to attract international patients. Supporting infrastructure such as a National Destination Knowledge Grid will be introduced to manage and share information related to tourist destinations.

Further enhancing travel experiences, 20 new national waterways will be developed over the next five years to improve water transport efficiency. Incentives will be provided for seaplane operations through a Seaplane VGF scheme, making water-based connectivity more viable.

Adding further support to allied sectors, Sitharaman announced that no import tax will be collected on fish captured in international waters. This move is expected to benefit both the fisheries and hospitality sectors by supporting supply chains and cost efficiency.

With these wide-ranging measures, Budget 2026 sets the stage for a new wave of growth in tourism and hospitality, promising enhanced guest experiences, stronger infrastructure, and long-term benefits for hotels, tourism operators, and travellers alike.

With expectations rising ahead of Union Budget 2026, industry leaders across hospitality, travel and food services are collectively calling for policy measures that move beyond short-term relief and address structural challenges limiting sustainable growth. From destination development and connectivity to taxation reforms and easier access to capital, the sector believes the upcoming Budget can play a defining role in shaping India’s tourism trajectory.

Shruti Shibulal of Tamara Leisure Experiences highlighted the need for a more diversified tourism map, with greater emphasis on developing new destinations and strengthening regional connectivity through schemes such as UDAN. She stressed the importance of sustainable tourism frameworks, simplified visa processes for wellness-led travel, and deeper rural participation to ensure tourism growth translates into local employment and long-term economic value.

From the food services segment, Pranav Rungta of Nksha Restaurant drew attention to persistent financial pressures faced by operators. He underscored the need for GST relief, revival of SEIS benefits, improved access to SME financing and formal industry recognition for food services, which could collectively ease cash flow constraints and support organised growth in the sector.

Amrita Gupta of Manglam Group pointed to the steady rise in experiential, wedding and wellness travel, particularly in heritage-rich destinations such as Jaipur. She advocated for quality-led investments, green financing options and focused policy support for heritage cities, allowing tourism growth to align with sustainability and cultural preservation.

Dinesh Yadav of Fine Acers echoed long-standing demands from the hospitality industry, calling for infrastructure status, GST reforms, innovative financing models and single-window clearances. According to him, these measures are critical to reducing project costs, improving viability and sustaining expansion across both established and emerging destinations.

Highlighting the strength of domestic travel, Govind Gaur of WanderOn and Dr Vikas Katoch of Adotrip emphasised the importance of continued investment in infrastructure, GST rationalisation and easier access to credit. They also reiterated the need for sustained focus on sustainable and heritage tourism, which they see as key drivers of inclusive, long-term growth.

As Budget 2026 draws closer, the unified message from the industry is clear: targeted reforms, policy clarity and long-term vision will be essential to unlock the next phase of growth for India’s hospitality, travel and food services ecosystem