Tourism and Hospitality

India is one of the largest and most diverse markets for travel and tourism, offering a wide portfolio of niche products such as cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural, and religious tourism. Spiritual tourism has gained prominence, attracting both domestic travellers and the Indian diaspora. States like Uttar Pradesh are developing religious tourism circuits, while Uttarakhand and West Bengal are enhancing infrastructure for pilgrims to facilitate this growing segment.

The country has also emerged as the most digitally advanced traveller nation, with consumers relying extensively on digital tools for planning, booking, and experiencing journeys. A rising middle class, coupled with increasing disposable incomes, continues to fuel both domestic and outbound travel.

India ranked 39th in the Travel and Tourism Development Index (TTDI) 2024 published by the World Economic Forum, underscoring its growing global presence. The Indian hospitality sector is expected to sustain steady momentum, with revenue growth projected at 7-9% in FY25 and 6-8% in FY26. Premium hotel occupancy is forecast to improve from 70-72% in FY25 to 72-74% in FY26, supported by strong domestic demand across leisure, MICE, and business travel (ICRA).

According to the World Travel & Tourism Council (WTTC), the sector contributed Rs. 21,15,000 crore (US$ 250.2 billion) to India’s GDP in CY24 and is on track to grow to Rs. 43,25,000 crore (US$ 511.5 billion) by CY34, supporting nearly 63 million jobs. For 2025 alone, WTTC forecasts a record-breaking year, with the sector’s economic contribution set to exceed Rs. 22,00,000 crore (US$ 257.4 billion) and employment reaching more than 48 million.

As per JLL’s Hotel Investment Trends in India 2025 report, hotel investment activity in India increased by 67% year-on-year to Rs. 4,933 crore (US$ 567 million) across 28 transactions in CY2025, reflecting strong investor confidence in the hospitality sector. Institutional investors and private equity firms accounted for 35% of hotel transaction volume in CY2025, driving investment activity worth approximately Rs. 1,727 crore (US$ 198.5 million).

As per redBus India BusTrack Report 2026, India’s intercity bus industry recorded 147.19 million passenger journeys and a gross ticketing value of Rs. 142.16 billion (US$ 1.63 billion) during October 2025–March 2026, reflecting strong travel demand across the country. The intercity bus market grew by 24% year-on-year in terms of passengers travelled during October 2025–March 2026, highlighting the continued expansion of road-based travel in India.

As per JLL’s Hotel Investment Trends in India 2025 report, India recorded branded hotel openings of approximately 8,990 keys across 103 hotels in CY2025, with 64% of the new inventory added in tier-II and tier-III cities.

India’s branded hotel segment is expected to add nearly 20,000 new rooms over FY26–FY27, reflecting a 20% increase in supply driven largely by asset-light expansion strategies. Despite rising inventory, occupancies are projected to remain stable, and average room rates are likely to increase as travel demand continues to outpace supply across key destinations.

In 2023–24, the travel and tourism sector in India generated approximately 84.63 million jobs (including both direct and indirect employment). During the same period, the sector’s total contribution to India’s GDP stood at 5.22%, reflecting its significant role in the national economy.

In FY26, passenger traffic at Indian airports reached 420.09 million, registering a 1.9% year-on-year growth compared to 412.09 million passengers in FY25. The increase was driven by growth in both domestic and international air travel, reflecting continued expansion in tourism and business mobility.

As per provisional National Accounts Statistics 2025 estimates, the tourism sector contributed Rs. 15.73 lakh crore (US$ 177.4 billion) to India's GDP. This reflects the sector's strong economic role in India.

Indian hotels are tapping into the wellness tourism boom, with wellness tourism projected to be a US$ 1.3 trillion global market by 2025. In India, wellness tourism is growing strongly driven by health awareness and lifestyle shifts post-pandemic, with a focus on wellness packages that have boosted occupancy by 36% in some properties.

New GST reforms were implemented in India aimed at making travel more affordable, especially for budget and mid-range segments. The reforms reduced taxes on hotels, domestic flights, dining, and tourism activities, resulting in an expected boost in domestic travel and tourism entrepreneurship.

Domestic tourism has become the cornerstone of India's hospitality growth, contributing nearly 88% of total tourism spending. Urban Indians increasingly prefer shorter, experience-led breaks like wellness and adventure tourism. This regional travel focus is expanding new markets in Tier-II and Tier-III cities and driving infrastructure development.

Indian airlines and hotels are progressively accommodating pet owners, experiencing a notable surge in flight and accommodation bookings, which have risen by double digits in FY25. Industry data indicates that pet-related bookings for flights and hotels have increased year-over-year by between 26% and 43%.

The Central Government is promoting lighthouse tourism under Maritime India Vision 2030 and Amrit Kaal Vision 2047, investing Rs. 60 crore (US$ 7 million) to develop 75 lighthouses with modern amenities such as museums, amphitheaters, and parks, blending heritage with recreation.

Foreign Tourist Arrivals (FTAs) in India stood at around 9.15 million in 2025, reflecting sustained international travel interest supported by improved connectivity and diversified tourism offerings. In 2025, the top source countries were the USA (20.1%), UK (11.9%), Australia (6.0%), Canada (5.9%), and Bangladesh (5.1%). Foreign exchange earnings in 2025 totaled 2,76,831 crore (US$ 31.69 billion).

In 2024, domestic visitor spending reached Rs. 15,50,000 crore (US$ 185.60 billion), 22% higher than 2019 levels. This is projected to rise further to Rs. 16,80,000 crore (US$ 200.17 billion) in 2025, fueled by younger demographics, higher disposable incomes, and a stronger post-pandemic preference for local exploration.

International visitor spending in India rose to Rs. 3,10,000 crore (US$ 36.80 billion) in 2024, up from Rs. 2,80,000 crore (US$ 33.10 billion) in 2019, and is projected to reach Rs. 3,20,000 crore (US$ 37.47 billion) in 2025.

Cumulative FDI equity inflow in the Hotel and Tourism industry is Rs. 1,22,558 crore (US$ 19.07 billion) during the period April 2000-March 2026. This constitutes 2.42% of the total FDI inflow received across sectors.

The G-20 Presidency will give India’s tourism sector an unparalleled opportunity to highlight India’s tourism offerings and share India’s tourism success stories on a global stage.

Tourism Ministry has undertaken the ‘NamasteIndia’ Campaign for encouraging international visitors to travel to India.

The Union Budget 2026–27 positions tourism as a high-impact growth sector, focusing on infrastructure upgrades, workforce development, and sustainable destination planning to boost employment, investment, and regional tourism growth across India.

Ongoing initiatives such as Swadesh Darshan 2.0 continue to strengthen tourism infrastructure, with over 75 projects completed nationwide to improve accessibility, amenities, and destination competitiveness.

India’s Union Budget FY27 has allocated Rs. 2,335 crore (US$ 253.8 million) to boost its tourism sector, focusing on improving infrastructure, skill development, and travel facilitation through measures like developing 50 top tourist destinations, offering MUDRA loans for homestays, enhancing connectivity.

The medical tourism sector in India is valued at US$ 8.71 billion in 2025 and is projected to nearly double to US$ 16 billion by 2030 with a CAGR of 13.23%. India is recognized for building a holistic medical tourism ecosystem offering affordable and high-quality care.

In May 2026, Radisson Hotel Group announced plans to expand its portfolio in India to 157-160 hotels with up to 19,500 keys by the end of 2026. The expansion reflects the group’s continued focus on India’s growing hospitality market, supported by strong development activity across metro as well as tier-II and tier-III cities.

In May 2026, Hotel Palacio launched its second property in Guwahati and announced an expansion roadmap of Rs. 800 crore (US$ 87.0 million) to develop 10 new properties over the next decade. The investment is aimed at strengthening hospitality infrastructure in Northeast India and supporting the region’s growing tourism and business travel demand.

In May 2026, IHG Hotels & Resorts signed a strategic agreement with Adani Airport Holdings to develop five hotels with nearly 1,500 keys across key airport-led destinations in India.

In April 2026, Nomura stated that India’s hospitality sector has entered a “golden cycle”, supported by sustained growth in average room rates, strong investment returns and attractive valuations. The report highlighted that demand, particularly in the luxury hotel segment, is expected to continue outpacing supply, driven by rising business travel, tourism activity and increasing discretionary spending.

On October 31, 2025, Goa's tourism sector saw a 6.23% rise in tourist arrivals during the 2025-26 season, with new international flights and sustainable tourism policies boosting arrivals, as reported by the local tourism minister.

India recorded approximately 10.07 lakh foreign tourist arrivals in January 2026. Domestic tourism is also strong; various thematic circuits developed under government schemes like 'Swadesh Darshan' are enhancing leisure tourism options, such as cultural, coastal, and tribal circuits.

Indian overseas travel data shows a sharp uptick in leisure travel by Indians abroad, with leisure travel making up 42.52% of foreign departures by Indians in 2024. This underscores leisure travel as a growing segment both inbound and outbound for India.

Luxury travelers have the highest average spend per person as per the Skift-FICCI report at Rs. 3,52,656 (US$ 4,041)*, the total revenue generated by this segment stands at Rs. 86,324 crore (US$ 10.1 billion)*.

Sarovar Hotels is set to launch Nepal's largest hotel, featuring 304 rooms under the Royal Tulip brand, in the first half of CY25.

The budget also supports sustainable tourism with the Swadesh Darshan Scheme 2.0, promotes medical tourism under "Heal in India," revitalizes spiritual tourism, and preserves heritage through the Gyan Bharatam Mission, aiming to drive employment and economic growth.

The Ministry of Tourism launched the Swadesh Darshan Scheme to develop theme-based tourist circuits, sanctioning 76 projects. Upgraded to Swadesh Darshan 2.0 (SD2.0), it targets sustainable tourism, selecting 57 destinations for development, with States/UTs preparing plans accordingly.

The Prime Minister Mr. Narendra Modi inaugurates and unveils 52 tourism sector projects valued at over Rs. 1,400 crore (US$ 168.5 million) under the Swadesh Darshan and PRASHAD Scheme.

Accor, a French hospitality major will expand its India portfolio by adding nine additional hotels in the mid-scale and economy categories, bringing the total number of hotels to 54 in India.

The Ministry of Tourism has undertaken Destination Based Skill Development training programme at various places in the country to train, local people residing near the tourist sites and destinations. Around 12,187 candidates have been trained at 145 destinations.

The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can register online for All India Tourist Authorisation/Permit. This permit will be issued within 30 days of submitting the application.

India's hotel market is shifting to rate-led growth supported by infrastructure expansion and growing domestic tourism. The sector attracted US$ 340 million in hotel transactions in 2024, making India the second-largest hotel investment market in Asia Pacific, with over 690 new hotel projects underway.

India has emerged as Marriott International’s hotspot in the Asia Pacific region excluding China (APEC), as it celebrated a milestone year in 2025 with 99 hotel signings and over 12,000 rooms added.

In January 2026, Thomas Cook India signed an MoU with Gujarat Tourism during the Vibrant Gujarat Summit to strengthen destination promotion and boost leisure and MICE travel. The partnership aims to enhance Gujarat’s tourism visibility through targeted marketing, training initiatives, and an omnichannel strategy to drive higher visitor engagement and arrivals.

In March 2024, MakeMyTrip revealed a partnership with the Department of Tourism, Madhya Pradesh, and redBus to boost tourism in the region, aiming for sustainable development and positioning Madhya Pradesh as a premier destination.

In March 2026, MakeMyTrip announced the acquisition of a majority stake in regional tour operator Flamingo Transworld to strengthen its holiday packages business and expand its presence across key regional markets in India.

‘Medical Visa’ has been introduced, which can be given for specific purpose to foreign travellers coming to India for medical treatment. ‘E-Medical Visa’ has also been introduced for 166 countries.

India has invested heavily in AYUSH and is in a unique position to attract medical value travellers for a cure through AYUSH and for enhancing wellness.

In 2024, India issued 4,63,725 medical visas, a significant increase from 3.75 lakh in 2019.

Additionally, India issued 173 AYUSH visas, 221 AYUSH e-visas, and 17 AYUSH attendant visas in 2024 to support wellness tourism under traditional medicine systems like Ayurveda and related practices.

India’s medical tourism market is expected to grow from Rs. 1,55,555 crore (US$ 18.2 billion) in 2025 to Rs. 4,97,435 crore (US$ 58.2 billion) by 2035 (CAGR 12.3%), driven by advanced clinical care combined with traditional wellness like Ayurveda, supported by the ‘Heal in India’ initiative and expanded medical visas.

Cruise tourism is one of the most vibrant and fast-growing sectors of the leisure and travel industry. The Indian government has estimated that India would emerge with a market size of 1.2 million cruise visitors by 2030-31.

National strategy and roadmap for the development of rural tourism aims at prioritization of rural tourism at the national level.

This can benefit the local community economically and socially and facilitate interaction between tourists and locals for a mutually enriching experience.

India has rich natural and eco-tourism resources ranging from pristine forests, the snow-clad Himalayas, montane grasslands, golden and silver deserts, rivers, lakes, wetlands, mangroves, beaches, volcanoes and corals, housing tremendous biodiversity.

India’s travel and tourism sector is on a strong growth path, fuelled by rising domestic demand, global interest, and supportive policies. With world-class infrastructure, digital adoption, and diverse offerings spanning wellness, medical, spiritual, and experiential travel, India is well-positioned to emerge as a leading global destination in the coming decade, driving jobs, investments, and cultural exchange.

Note: * - Data as of May 2026