Tourism Operators Applaud Budget 2026 Experiential Push but Question Marketing Strategy Vacuum

Finance Minister Nirmala Sitharaman's Union Budget 2026-27 proposals for tourism, headlined by upgrading the National Council for Hotel Management into a National Institute of Hospitality, training 10,000 tourist guides through IIM-designed programmes, and slashing TCS on overseas packages to 2%, have elicited cautious optimism from industry stakeholders who welcome the experiential shift whilst flagging persistent gaps in international marketing and execution capacity.

"The Union Budget 2026 marks a decisive moment for India's tourism sector, positioning it as a powerful engine for economic growth, youth employment, forex earnings, and regional development," observed Hari Ganapathy, Co-Founder of Pickyourtrail. However, with India capturing merely 1.5% of global tourist arrivals, 9.7 million visitors in 2024 against Thailand's 35 million, operators emphasise institutional reforms cannot substitute for aggressive destination branding. Tourism contributed Rs. 21.15 lakh crore (9.1% of GDP) in 2024 according to WTTC data, yet arrivals lag 10% behind 2019 levels whilst Southeast Asian competitors surpass pre-pandemic benchmarks.

Hospitality Institute and Guide Training Draw Mixed Assessments

This year's Budget proposes transforming the National Council for Hotel Management into a National Institute of Hospitality, an apex body to standardise curricula and align training with international benchmarks in a sector supporting 46.5 million jobs, projected to reach 64 million by 2035.

Abhishek Sahai, General Manager of Conrad Pune, welcomed the initiative, "Initiatives such as National Institute of Hospitality and the upskilling of tourist guides will elevate India's tourism story beyond infrastructure, moving towards experiences rooted in storytelling, service excellence and authenticity."

The parallel scheme to train 10,000 tourist guides across 20 iconic sites through a 12-week IIM-designed programme has drawn nuanced reactions. Umair Sikkawala,who conducts heritage walks in Delhi, cautioned, "We need to make sure that these guides have that thing in them for the passion, the passion of storytelling. I think it's a good initiative." His observation underscores concerns that standardised certification may not capture locality-specific knowledge distinguishing exceptional guides. 

When asked about the possibility of a competitive market with heritage walks, Sikkawala assures, “Guides have a very different target market as compared to the people who come for the walks.”

Budget 2026 also announces a National Destination Digital Knowledge Grid cataloguing heritage sites. Whilst operators acknowledge this addresses digital gaps, several note it cannot substitute for coordinated international marketing campaigns that Thailand and Vietnam deploy with dedicated budgets.

Heritage Sites and Medical Hubs Target Experiential Segments

This year's Budget allocates resources to transform 15 archaeological sites, including Lothal, Dholavira, Rakhigarhi, and Sarnath, into experiential destinations with interpretation centres. Buddhist Circuit development across six North-Eastern states receives dedicated funding. While already existing sites like Odisha Buddhist Diamond, which is also aspiring to get more substantial recognition through UNESCO this year, have not received any backing.

Poonam Singh, General Manager of Dharana at Shillim, responded positively, "The emphasis on infrastructure development, skill enhancement, and institutional support, alongside a continued focus on India's traditional wellness systems such as Ayurveda and Yoga, signals an intent to strengthen destinations grounded in authenticity, wellbeing, and a mindful engagement with cultural and natural heritage."

Budget 2026's five Regional Medical Hubs through public-private partnerships will house multi-speciality hospitals, AYUSH centres, and Medical Value Tourism Facilitation Centres. However, operators note that success depends on visa efficiency and insurance portability, aspects that the Budget addresses without specifying process reforms.

Connectivity and Clean Mobility Integration

The Budget's expansion of high-speed rail corridors and national waterways has drawn positive responses from surface transport operators, positioning themselves as complementary links.

Sudhakar Chirra, Founder and CEO of Freshbus, observed, "The expansion of high-speed rail corridors and national waterways is a strong signal that India is moving towards an integrated, multi-modal mobility ecosystem. At Fresh Bus, we see electric inter-city buses as a natural complement to these large transport nodes rather than a competitor. As rail and waterway connectivity improves between major hubs, the demand for reliable, comfortable and sustainable surface mobility for first-mile and last-mile inter-city travel will only grow."

On sustainability measures, Chirra noted, "Budget 2026 reinforces a very important direction, that clean mobility is no longer optional, it is foundational to India's growth and tourism ambitions. Measures that reduce costs across the EV and clean-energy value chain directly strengthen the economics of electric bus operations, especially for long-distance travel." However, he flagged challenges: "Charging infrastructure readiness, power availability, and operational coordination across states remain areas that need continuous policy and ecosystem support."

TCS Reduction Provides Immediate Relief, Inbound Impact Questioned

Budget 2026's most tangible consumer measure reduces Tax Collected at Source (TCS) on overseas packages from a tiered 5-20% structure to a uniform 2%. For a Rs. 15 lakh international holiday, TCS falls from Rs. 3 lakh to Rs. 30,000, a ninefold reduction.

Ganapathy noted, "The reduction in TCS on overseas tour packages meaningfully improves affordability, transparency, and ease of travel for Indian consumers, supporting rapid growth of India's outbound market whilst enabling travel companies to design more personalised, seamless experiences."

The measure benefits India's outbound sector, projected to reach 40 million departures by 2030. However, its contribution to inbound tourism remains indirect, offering no solution to why India attracts just 9.7 million arrivals compared to regional competitors.

Critical Gaps in Marketing and Implementation

Industry consensus recognises Budget 2026's comprehensive architecture spanning institutional capacity, human capital, infrastructure, and fiscal incentives. Singh noted, "These measures create opportunities to advance sustainable tourism, enable meaningful regional employment, and elevate service standards, reinforcing India's position as a globally credible destination for holistic wellbeing and conscious travel."

However, stakeholders identify three critical deficits. First, no dedicated allocation exists for international marketing when Thailand operates coordinated global campaigns. Second, execution quality remains uncertain, with previous initiatives frequently faltering. Third, achieving Vision@2047's target of 100 million inbound tourists from the current 9.7 million requires addressing why India captures just 1.5% of global arrivals.

Ganapathy emphasised that "experience-led growth through integrated medical and tourism hubs, immersive heritage destinations, and eco-tourism significantly strengthens India's appeal for international travellers." Yet translating Budget 2026's framework into tourism's projected 10-11% GDP contribution by 2047 depends on implementation rigour and marketing investments conspicuously absent. Whether institutional reforms can compensate for this strategic vacuum will determine if Budget 2026 marks a genuine inflection point.