Development of top tourist destinations to fuel hotel supply, e-visa to make India more attractive

Tourism gets boost in Budget 2025.

The budget announcement that the government would develop 50 tourist destinations and include hotels in these destinations in the infrastructure harmonised list will boost room supply and enhance India’s global tourism footprint, while creating long-term employment opportunities, said travel and tourism experts.

The inclusion of hotels in the harmonised master list as well as the granting of infrastructure status to the hospitality sector is a significant move and aligns with the long-standing request of granting such status to the industry, noted K Syama Raju, president of the Federation of Hotel & Restaurant Associations of India.

This will facilitate access to cheaper, long-term financing, enabling hotels in these newly developed destinations to upgrade their facilities and offer world-class services, further boosting the sector, he added.

Hotel room supply will be fast-tracked, said Rajiv Mehra, general secretary, Federation of Associations in Indian Tourism and Hospitality (FAITH).

Somesh Agarwal, chairman and managing director at Radisson Blu Palace Resort & Spa, Udaipur, also noted that the inclusion of hotels in the harmonised scheme for enhanced tourism infrastructure will improve infrastructure and streamline operations for hospitality players.

The current hotel room supply pipeline is lower than the post-FY09 global financial crisis period, according to ratings agency ICRA.

In the last two financial years, while room inventory increased by around 5 percent, demand grew by 8-10 percent and this trend is expected to continue in FY25 and FY26 with the pace of hotel room supply growing between 4 percent and 5 percent and demand increasing by 8-9 percent.

Mehta said that the alternative accommodation segment will grow as well, given the proposed loans—under the MUDRA scheme, which is focused on funding small businesses—for those operating home stays.

These loans will give local entrepreneurs the chance to start and grow small tourism businesses, especially in lesser-known areas, and help create more jobs and encourage tourism in these regions, Raju added.

Employment growth in the travel and hospitality sector is a key focus of the budget with new initiatives aimed at generating jobs and strengthening the workforce will create numerous employment opportunities, said Ashish Sidhra, co-founder at Alike.io, a curated holidays platform. "This is particularly important in a sector that was hard-hit by the pandemic and is now poised for a strong recovery," Sidhra underlined.

He added that with a multi-faceted approach, the government aims to elevate the sector's contribution to GDP to an ambitious 9-12 percent, aligning with global peers.

Strengthening infrastructure and supporting grassroots businesses will not only fuel job creation but also establish India as a global tourism hub, said Dharamveer Singh Chouhan, co-founder and CEO of Zo World and Zostel.

Streamlined e-visa facilities and visa-fee waivers will also position India as a more attractive global travel destination, said Rikant Pittie, CEO and co-founder, EaseMyTrip.

Karan Agarwal, director of Cox & Kings agreed, saying, "It will make India more accessible to international tourists and will boost arrivals."

"It will promote inbound tourism as the country is getting ready to host 3-5 percent more foreign tourists in 2025 versus last year," noted Aditya Sanghi, CEO of Hotelogix.

Budget 2025 continued the emphasis on religious tourism with special focus on destinations related to Buddha.

"Spiritual tourism has been witnessing strong growth in the last two years. Bookings to destinations like Varanasi, Gaya, Shirdi, Puri, Haridwar and Vaishno Devi increased by 100-150 percent year-on-year on ixigo last quarter,”said Aloke Bajpai, group CEO of the ticketing and room booking platform.

He added that it is great to see a focus on developing greenfield and brownfield airports in Bihar and the expansion of Patna airport. "For a population of over 120 million, we had only three operational airports there. The development of new airports is essential to meet the rising demand for air travel, support first-time flyers and accommodate the region’s growing air traffic," said Bajpai.

By attracting travellers from countries with significant Buddhist populations, this initiative will not only boost cultural and spiritual tourism but also foster greater international understanding and goodwill, Sidhra added.

The government has consistently looked at leveraging India's natural beauty and mixed topography to increase employment and generate revenue, said Sneha Pai, senior director, direct tax, Nexdigm, a professional services provider. "With an increase in India tourism, it also indirectly helps in reducing foreign exchange outflow for tourism overseas."

The promotion of medical tourism and the ‘Heal in India’ initiative positions India as a global wellness hub, attracting travellers seeking rejuvenation and holistic healing, said Jatinder Paul Singh, co-founder and CEO, Viacation.

FAITH's Mehra pointed out that the proposed enhancement of slabs on TCS or tax collected at source on remittance from Rs 7 lakh to Rs 10 lakh should benefit travel agents.

"The increase in the (income) tax exemption ceiling to Rs 12 lakh and rationalisation of TCS on remittances will support discretionary spending on travel, both domestic and international," said Mahesh Iyer, managing director and CEO, Thomas Cook (India) Limited.

This year’s budget brings some exciting developments for tourism and hospitality, especially with the expansion of regional airport development scheme UDAN, said Jaikar Singh, director at Symphony Resorts, a chain of luxury hotels and resorts located in the Andaman and Nicobar Islands.