As accommodation rates continue to rise across India, travelers and experts alike are questioning the affordability of domestic holidays. Ace investor Basant Maheshwari has stirred a nationwide debate, calling Indian hotel rates a “scam” and comparing the cost of domestic vacations to international ones. “If you can ignore the airfare, a holiday in India costs almost as much as one in a foreign country,” he said, igniting discussions on the structural issues plaguing the Indian hospitality sector.
Maheshwari’s statement has struck a chord with many, including finance educator and Wisdom Hatch founder Akshat Shrivastava. In a viral post on X (formerly Twitter), Shrivastava expressed his dismay, noting that popular destinations like Manali and Shimla are now more expensive than Georgia, while Mumbai rivals Dubai in terms of holiday costs.
The steep prices are not limited to luxury accommodations; they extend to guesthouses, dining, and everyday services in tourist-heavy regions. “A INR 400 cup of tea at the airport, INR1,000 for a pizza at the mall, INR150-per-hour parking—everyone is passing on their costs to consumers,” commented one user.
Real Estate Costs Behind Rising Prices
The surge in accommodation rates is being attributed to ballooning real estate prices in tourist hubs. According to recent data, property rates in these areas average INR21,600 per sq ft, more than 150% higher than the INR8,500 per sq ft in non-tourist regions. The need for property owners to recover their investments is directly impacting hotel tariffs.
In Ayodhya, real estate prices have reportedly surged tenfold in recent years. Meanwhile, Bengaluru and Hyderabad have witnessed nearly 90% appreciation in select pockets since 2019. Colliers predicts that India’s real estate market will reach USD1 trillion by 2030, adding further pressure on the hospitality sector to maintain profitability.
Impact on Tourism
The rising costs are forcing many Indian tourists to reconsider their travel plans. With competitive international airfares and affordable accommodations in countries like Thailand, Georgia, and Dubai, foreign vacations are becoming increasingly appealing. “A domestic trip that feels as expensive as an international one is pushing travelers to look overseas,” said a travel industry expert.
For the Indian hospitality sector, this shift could have long-term consequences. While real estate developers and investors may rejoice at the booming property market, the rising costs are reshaping how India vacations. If left unchecked, domestic tourism could face a significant decline as middle-class travelers seek cost-effective alternatives abroad.
Source: Business Today
