ixigo bets on temple town tourism; MakeMyTrip sees TCS cut in Budget 2026 fueling outbound travel

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The focus on Tier II and Tier III cities, including temple-towns, through the city economic regions (CER) development budgetary allocation of Rs 5,000 crore should result in a big boost for tourism in those cities, noted Aloke Bajpai, Group CEO, ixigo.

Manjari Singhal, Chief Growth and Business Officer, Cleartrip also highlighted the impact of government’s focus on spiritual, cultural and heritage-led tourism. She said that during the Maha Kumbh 2025, Prayagraj saw nearly a 10 times year-on-year (YoY) jump in hotel bookings, a 65% rise in flight bookings and 3 times growth in hotel searches, with strong spillover demand into nearby destinations. Established spiritual centres such as Udupi and Tirupati recorded a 27% increase in visitors, while Amritsar saw a 33% rise.

In addition, the new Buddhist circuits announced in the FY27 Union Budget will significantly strengthen the development of tourism in the North East, across the states of Sikkim, Manipur, Assam, Arunachal Pradesh, Mizoram and Tripura, further enhancing connectivity and infrastructure in the region, Bajpai said.

"At ixigo last year, we have seen rising interest in North-eastern region tourism. It is encouraging to see the government continuing to invest in spiritual tourism capacity creation, an area where we’ve consistently seen massive demand and long-term potential,” Bajpai added.

The emphasis on nature-based and experience-led tourism with plans to build ecologically sustainable trekking and hiking trails across key mountain and forest regions is particularly encouraging and is likely to give a meaningful boost to leisure travel within India, which is increasingly being driven by Millennials and Gen Z, he said.

Singhal added that the Northeast is emerging as a strong growth story. While air bookings from major metros to key Northeast hubs remained steady YoY, hotel demand has surged, with overall bookings growing 180% in 2025. Cities like Dibrugarh, Imphal and Silchar stood out as rising stars, recording nearly 12 times growth compared to 2024. "Gen Z is playing a significant role here, accounting for more than 50% of flight bookings and more than 40% of hotel bookings to the region, signalling growing interest in experiential and offbeat destinations," she said.

The development of five new tourism destinations, with a push for Buddhist circuits across Assam, Manipur and Tripura, can reposition the region as a key cultural and spiritual travel hub, said Dr. Vikas Katoch, Founder and CEO Adotrip.

Yatra's CEO, Siddhartha Gupta welcomed the continued push on connectivity and planned urban development which he said will make inter-city travel more reliable and bring Tier-2 and Tier-3 cities further into the mainstream of both business and leisure travel. "For platforms like ours, this creates a stronger base for corporate travel, MICE and long-stay demand beyond the largest metros," he said.

By strategically mapping city economic regions around their inherent growth drivers and strengthening connectivity, India will be able to unlock the travel potential of Tier-2 and Tier-3 cities, said Govind Gaur, CEO, WanderOn.

Rajesh Magow, Chair, FICCI Tourism Committee and Co-founder & Group CEO, MakeMyTrip pointed to the rationalisation of Tax Collected at Source (TCS) on overseas tour packages. "This step addresses the upfront liquidity impact on Indian outbound travellers."

The government has proposed to reduce the TCS rate on overseas tour packages to a flat 2% from the earlier 5% and 20% slab based system.

The simplified flat 2% TCS on overseas tour programme packages replaces the earlier two-tier structure, easing compliance and unblocking cash flows for travellers, noted Mahesh Iyer, Managing Director & Chief Executive Officer, Thomas Cook (India).

Vishal Suri, Managing Director & CEO, SOTC Travel Limited, said that Budget 2026 sets the stage for accelerated growth in India’s travel and tourism sector. "The reduction of TCS on outbound travel to 2% will make international holidays more accessible and boost demand. While the establishment of five regional medical tourism hubs positions India as a leading destination for integrated hospitality and healthcare," he said.

In addition, the proposed revision of international baggage clearance processes to simplify procedures and reduce dwell time will help deliver a smoother and faster airport experience for inbound travellers, Rajnish Kumar, Group Co-CEO, ixigo, said.

The reduction in TCS on overseas tour packages will meaningfully improve affordability, transparency, and ease of travel for Indian consumers, said Hari Ganapathy, Co-Founder, Pickyourtrail. "This supports the rapid growth of India’s outbound market while enabling travel companies to design more personalised, seamless experiences."

However, Ravi Gosain, President, Indian Association of Tour Operators (IATO) said that while the 2% TCS on outbound spending is positive for regulating overseas travel, there is some unhappiness over the absence of a dedicated budgetary allocation for overseas tourism promotion.