As India heads into the Union Budget 2026, the hospitality and tourism sector has stepped forward with a unified call for policy reforms to sustain momentum and unlock its next phase of growth. Buoyed by strong domestic travel demand, rising occupancies and expanding leisure, wedding and MICE segments, industry leaders believe the time is ripe for structural support that matches the sector’s economic contribution. Key expectations include comprehensive infrastructure status for hotels, GST rationalisation, easier access to long-term and green financing, single-window clearances and incentives that encourage investment across Tier II and Tier III destinations. Stakeholders argue that such measures would not only accelerate capacity addition and improve ease of doing business, but also strengthen India’s position as a competitive global travel destination, generate large-scale employment and support the broader vision of a Viksit Bharat.
KB Kachru, President, Hotel Association of India (HAI) and Chairman – South Asia, Radisson Hotel Group
“For the upcoming Union Budget, Hotel Association of India (HAI), the national body for Indian hotels, urges policymakers to prioritise sector-specific reforms to drive growth and resilience in the hospitality sector. The hotel sector should be given due recognition for its significant contribution to GDP, jobs and foreign exchange earnings. The key policy interventions are according of infrastructure status and allowing of industry benefits to hotels. This will encourage investments in the sector and unleash the full potential of hotels to generate employment and play the desired role in realising India’s Vision of an Aatmanirbhar Viksit Bharat.
There is a need to further improve the ease of doing business by reducing both- the number and the costs of approvals, NoCs and clearances required to build and operate hotels. A single window clearance mechanism is a provision that requires urgent attention. Re-instating the rewards scheme for FX earnings, higher rate of depreciation for hotels are recommended. Though not related to the budget, the sector also awaits pragmatic GST reforms.”
Ajay K. Bakaya, Chairman, Sarovar Hotels & Director, Louvre Hotels India
“As India’s hospitality sector continues on a strong growth trajectory—supported by steady economic expansion in the 6–8% range, a stable policy environment, and rising domestic travel demand—the upcoming Union Budget presents an important opportunity to enable long-term, sustainable growth for the industry.
Domestic demand today is clearly outpacing supply, particularly as new hotel development faces challenges such as land acquisition complexities, regulatory approvals, and long project gestation cycles of 5–8 years. In this context, granting infrastructure status to hotels would significantly improve access to long-term financing and catalyse fresh investments, especially across Tier II and Tier III cities where demand is accelerating.
From an operational standpoint, rationalisation of GST—especially delinking GST on food and beverage services from room tariffs—would bring much-needed clarity, simplify compliance, and improve pricing transparency for guests, while supporting hotel profitability and greater formalisation of revenues.
We also expect continued focus on tourism and aviation infrastructure, including new airports and regional connectivity, which will unlock emerging and pilgrimage destinations and deepen travel flows beyond metros. Cities such as Jaipur, Lucknow, Raipur, Ranchi, and other fast-growing regional centres are already witnessing strong demand driven by local populations, banqueting, weddings, and food and beverage consumption.
In addition, greater emphasis on skill development, ease of doing business, and sustainability-linked incentives will strengthen India’s positioning as a competitive global travel destination while supporting large-scale employment generation.
Such policy measures will not only accelerate industry growth but also enable hotel operators to enhance guest experiences, develop new destinations responsibly, and contribute meaningfully to India’s broader economic and tourism objectives.”
Shwetank Singh, Executive Director, Chalet Hotels Limited
“As we approach the 2026 Budget, India’s hospitality sector waits with measured optimism. We’ve created 46.5 million jobs and are projected to support 64 million by 2035, yet do not get classified as infrastructure which is a looming constraint on scale.
The 2025-26 Union Budget extended infrastructure status to hotels in 50 select destinations, but the sector needs comprehensive recognition. Infrastructure classification unlocks soft financing, lower utility tariffs and rationalized property taxes, support that is routinely granted to highways and ports, but withheld from hotels despite equivalent capital intensity.
Equally critical is bringing tourism into the concurrent list. Policy coordination between center and states has long remained fragmented. To ensure seamless implementation across diverse destinations, tourism, and by extension, hospitality requires constitutional alignment within shared legislative space. This will further help in the holistic development of the destination giving a seamless experience to the traveller.
The pathway to USD 1 trillion contribution to the GDP from the sector would then be closer to reality.”
Col. Manbeer Choudhary, CMD, Noormahal Group
“The Union Budget 2026 presents a defining opportunity for India’s hospitality industry. Our sector has shown exceptional resilience over the past three years, making substantial contributions to GDP, employment, and foreign exchange earnings. To fully realize this potential, strategic policy reforms are essential. Our foremost priority is securing infrastructure status for hotels. This designation would fundamentally transform our ability to access capital on favorable terms, enabling faster capacity expansion despite robust demand from leisure and corporate segments. Granting industry status to hospitality would be a meaningful step, helping hotels, especially small and mid-sized properties, access institutional finance, reduce borrowing costs, and invest in long-term infrastructure. Currently, funding challenges and project delays are constraining growth.Equally critical is reducing Goods and Services Tax (GST) rates, particularly on accommodation, food & beverage, and allied services. This could stimulate consumer demand, improve affordability, and accelerate recovery in a segment that’s crucial for tourism, employment, and economic growth. We also advocate for targeted policy support to boost competitiveness and operational sustainability for hotels across India. Additionally, implementing a unified single-window clearance system to simplify the maze of approvals and NOCs across multiple departments would drive down costs and timelines considerably.
Market conditions are highly favorable: occupancy levels and room rates are approaching historical peaks, and domestic travel appetite remains strong. With supportive budget measures including reinstated forex incentives and enhanced depreciation rates, the hospitality sector is positioned to significantly amplify employment opportunities and become a stronger pillar of India’s economic expansion.”
John Royerr, Founder, Ochre Spirits
“As a founder in India’s craft and premium spirits industry, my pre-Budget expectation is centred on long-overdue regulatory reform rather than incremental relief. The current label registration process remains fragmented, manual, and unpredictable across states, directly slowing innovation and capital efficiency. Introducing nationally aligned, time-bound, and fully digitised label approvals would meaningfully improve ease of doing business without diluting regulatory control. Equally critical is the issue of GST on procurement. While the industry is excluded from the GST framework, almost all production inputs attract GST, converting input tax into a structural cost. For emerging players, this erodes competitiveness and discourages formalisation. Exploring solutions such as input tax offsets, refunds, or a limited credit mechanism for non-alcohol inputs would create parity while preserving state excise revenues. A reform-led Budget that addresses these systemic issues can unlock sustainable growth, investment confidence, and long-term value creation across India’s alco-bev sector.”
Amrita Gupta, Director of Manglam Group and CEO , Manglam Spa and Resorts
“The coming year presents an important opportunity for India’s hospitality sector to scale sustainably while deepening its contribution to tourism-led economic growth. Entering 2026, demand is being driven by experiential travel, destination weddings and wellness-led stays, creating the need for policy support that encourages long-term, quality-led investment. Reforms such as granting tourism industry status, rationalising GST and improving access to infrastructure and green financing can meaningfully strengthen the sector. For destinations like Jaipur, targeted budgetary support for tourism infrastructure, heritage-sensitive development and sustainable hospitality projects will help enhance global competitiveness while preserving cultural identity and driving inclusive growth.”
Srikumar Krishnamurthy, Senior Vice President & Co-Group Head, Corporate Ratings, ICRA Ltd
“The Indian hospitality industry has been in a sweet spot in recent years amidst persistent demand-supply imbalances and a structurally favourable environment. However, foreign tourist arrivals are still below past peak levels. ICRA expects the upcoming Union Budget to continue its focus on tourism and infrastructure investments, ease of doing business, enhanced connectivity and accessibility. With supply growth continuing to lag demand, policy frameworks aiding favourable financing terms shall support inventory addition.”
Sanjay Manohar Vazirani, Chairman and Managing Director,Foodlink F&B Holdings (India) Limited
“The hospitality and foodservice sector has become a strong reflection of India’s evolving consumption story, driven by rising
disposable incomes, experiential spending and renewed momentum in tourism and events. As we look to the Union Budget, continued focus on infrastructure development, tourism promotion and urban connectivity will have a meaningful multiplier effect on hospitality-led businesses, enabling India to position itself
as a global destination for premium culinary and lifestyle experiences.
From an industry perspective, rationalisation of GST, clarity on compliance norms and support for skill development will help
improve operating efficiencies while strengthening employment generation. Measures that ease access to credit, simplify trade processes and support globally expanding Indian hospitality brands will not only benefit the sector but also contribute to a stronger services-driven economy. A growth-oriented Budget that balances fiscal discipline with consumption and tourism-led growth can further accelerate India’s hospitality and experiential economy.”
Salim Shaikh, Co Founder, Monday Hotels
We look forward to a Union Budget that strengthens India’s position as a leading global travel destination, with increased investment in tourism infrastructure, last-mile connectivity, and urban hospitality development. Simplified licensing, single-window clearances, and access to affordable financing will enable hotel groups like Monday Hotels to expand responsibly and sustainably.
Key priorities for the hospitality sector include:
Sustainability incentives, including solar open access and energy-efficient infrastructure for mid-scale and large hotels.
Support for hospitality education and skill development to address workforce shortages and enhance service quality.
Policies to attract long-term, patient investors to encourage responsible sector growth.
Tax rationalisation and GST clarity to improve compliance, boost cash flow, and retain tourism revenue within the country.
Promotion of emerging and hidden leisure destinations to diversify travel demand beyond traditional hubs.
Digital transformation and innovation incentives to enhance operational efficiency and guest experiences.
Implementing these measures will help the hospitality industry grow sustainably, generate employment, and deliver memorable experiences to guests, while enabling India to maximize its tourism potential and strengthen its global competitiveness.
