Travel & tourism sector hopes for infrastructure status, GST Reforms in Budget 2024

The interim Union Budget allocated approximately Rs 2,450 crores to the sector, a 44.7 percent increase from previous allocations, aimed at boosting employment and tourism growth.

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26 Aug, 2025 12:21

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The travel and tourism sector is eagerly anticipating several measures in Budget 2024, including the grant of infrastructure status, Goods and Services Tax (GST) rationalization, changes to Leave Travel Allowance (LTA) rules, and incentives aimed at boosting local destinations.

On July 22, Oriental Hotels, Asian Hotels, Chalet Hotels, and Indian Hotels were the major gainers as they rose 4.0-7.3 percent. EaseMyTrip, IRCTC, and Yatra Online were up 0.1-4.0 percent.

Also Read | Indian Hotels jumps 7% on healthy Q1 results; stock up 40% so far this year

Amit Jain, Founder of Magicfares, highlighted that the growing demand for hospitality services, busy airports, and popular travel spots underscore the sector's vital role in economic expansion. Jain believes that increasing travel-related tax exemptions could encourage higher spending on travel by consumers. He also emphasizes the need for GST adjustments to make hotel stays more affordable for tourists.

Jain advocates for including hotel stays under LTA expenses and providing corporate incentives for hosting meetings and conferences in India, either through partial or full tax exemptions on expenses, to further stimulate domestic tourism.

Axis Securities noted India's potential to become a leading global tourism hub. According to a report by the India Brand Equity Foundation (IBEF), the travel and tourism market in India is expected to generate $23.72 billion in 2024, with a projected annual growth rate of 9.6 percent over the next four years. The sector has rebounded significantly post-pandemic, with foreign and domestic travel numbers returning to pre-COVID levels.

Also Read | Growth set to slow to 6.5-7% in FY25; Eco Survey asks corporates to pick the baton on job creation

The interim Union Budget allocated approximately Rs 2,450 crores to the sector, a 44.7 percent increase from previous allocations, aimed at boosting employment and tourism growth.

Despite the recent upturn in hotel stocks due to strong demand, challenges such as a severe heat wave and election disruptions during the April-June quarter impacted recreational spending. Nevertheless, domestic aviation traffic remained resilient, rising 4.4 percent year-on-year in May.

Stocks of companies like Chalet Hotels, Lemon Tree Hotels, IRCTC, Safari Industries, and Interglobe Aviation have surged between 9-44 percent over the past six months. ICRA reports steady growth in the hotel sector, with high demand outpacing supply. CRISIL Ratings projects robust revenue growth of 11-13 percent for the Indian hotel industry in FY25, suggesting the sector will continue its positive momentum into the new fiscal year.

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