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.