Travel stocks rise on measures to boost domestic tourism

In the interim Union Budget, approximately Rs 2,450 crores were earmarked for the sector -- a 44.7 percent increase from the previously revised allocation -- to boost employment and stimulate tourism growth.

From the Budget, the industry players had been expecting a rationalisation of Goods and Services Tax (GST), through uniformity in taxation of hotel-rooms, and giving tourism sector infrastructure status, among other things. Infrastructure status to a sector gives entities operating in it access to cheaper loans and ease-of-doing business.

In pre-Budget discussions with Moneycontrol, analysts had noted the significant growth the industry has seen post pandemic and the need for government support to keep the momentum going.

Axis Securities highlighted that India has the potential to become a top tourism centre globally. The brokerage pointed to the interest both foreign and domestic tourists have shown in travel post the pandemic.

The travel and tourism market in India is set to generate a revenue of $23.72 billion in 2024, with a projected annual growth rate of 9.6 percent over the next four years, according to a report by the India Brand Equity Foundation (IBEF).

To help further improvement in the sector, Axis Securities suggested lowering GST rates for the sector, granting infrastructure status to the hospitality industry, and promoting local destinations through fiscal incentives.

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