The travel, tourism and hospitality industry, represented by organizations such as FAITH, the Travel Agents Association of India (TAAI), and the Federation of Hotel & Restaurant Associations of India (FHRAI), has expressed disappointment and shock over the Union Budget 2024-25, despite Finance Minister Nirmala Sitharaman’s emphasis on tourism as a key driver for future growth. In her budget speech, the Finance Minister highlighted the government’s commitment to transforming India into a global tourist destination, which she believes will create jobs, stimulate investments, and unlock economic opportunities.
Ms Sitharaman announced comprehensive development projects for Vishnupad Temple Corridor and Mahabodhi Temple Corridor in Bihar, modelled after the successful Kashi Vishwanath Temple Corridor, aiming to turn these sites into world-class pilgrim and tourist destinations. She also mentioned initiatives for Rajgir and Nalanda, emphasizing their religious and historical significance, along with plans to support the development of Odisha’s tourism potential, known for its scenic beauty, temples, monuments, wildlife sanctuaries, and pristine beaches.
Despite these announcements, TAAI voiced its frustration over the lack of attention to key issues affecting the sector. The government did not address their pre-budget requests, such as reducing Aviation Turbine Fuel (ATF) taxes to lower airfares, rationalizing GST rates for travel, and abolishing Tax Collected at Source (TCS) on outbound travel, which they believe hinders business and competitiveness.
Mrs. Jyoti Mayal, President, TAAI said, “We have been reiterating to the Government of India to place the Travel and Tourism Trade, specifically the travel agents and tour operators, in the concurrent list and provide rebates to the trade as a result of granting industry status.
Missed Opportunities in Promoting Domestic Tourism: The budget falls short in launching robust campaigns to boost domestic tourism, which has become increasingly crucial in the current global context. Promoting local travel can drive immediate economic benefits and foster a culture of exploring India’s diverse attractions.
FHRAI echoed similar sentiments, noting the absence of structural changes needed to address fundamental challenges in the tourism and hospitality sectors. They called for GST rationalization, granting of infrastructure status, and policy reforms to stimulate growth. However, they acknowledged the budget’s positive focus on infrastructure, rural development, and skill enhancement, which are crucial for overcoming current challenges and fostering growth.
Mr. Rajiv Mehra, President, IATO said, “We are disappointed with the budget announcement. We had given multiple recommendations with regards to boosting inbound tourism, but they seem to have been ignored or not taken up”.
Mr. Pradeep Shetty, President of FHRAI said, “Although the budget falls short of our expectations for transformative changes in the tourism and hospitality sectors, we acknowledge its positive focus on infrastructure, rural development, and skill enhancement. These initiatives are crucial for overcoming current challenges and fostering growth. The commitment to develop iconic cultural sites and promote diverse forms of tourism is commendable and holds promise for attracting a broader range of domestic and international visitors”.
The hospitality sector is disappointed but not dejected as the overall focus on infrastructure development, employment generation skill development and the development of religious tourism centres are the silver linings which will help the sector tide over some of the critical challenges that it faces today.
The tourism industry also lamented missed opportunities in promoting domestic tourism and simplifying tax regimes for inbound cruise ships. The lack of a robust campaign to boost local travel, which is crucial in the current global context, and the absence of tax reductions for foreign shipping companies were seen as significant gaps in the budget.
According to Mr. Aashish Gupta, Consulting CEO, FAITH, “While it is encouraging the FM, announced that India has the potential to become a global tourism hub, it would also have been nice to see budget recommendation supporting the same, such as an increase in the marketing and publicity budget, infrastructure status support to hospitality, abolishment of TCS on travel and reduction in GST rates on tourism travel and hospitality. The support given to spiritual tourism through corridor development and cruise tourism through tax adjustment on foreign ships on Indian shores will support these sub-sectors. There was the potential for this budget to address a lot more opportunities for growth in Indian tourism in a structured manner”.
In conclusion, while the budget presented by the Finance Minister includes commendable initiatives for infrastructure and spiritual tourism development, it falls short of addressing the broader needs of the travel and tourism sector. A more comprehensive and supportive approach is necessary to unlock the full potential of India’s tourism industry and ensure its sustainable development.
Reactions to the Union Budget 2024: Tourism Industry Leaders Speak Out
Mr. Manoj Bhat, MD & CEO, Mahindra Holidays and Resorts India Ltd
“The budget is focused on fiscal prudence, stimulating investments, providing employment, and encouraging economic growth. The emphasis on improved connectivity and infrastructure will greatly benefit the domestic tourism sector. The spotlight on developing religious tourism will further boost the local economy by providing investment and employment.”
Mr. Animesh Kumar, Head of Commercials at ibis & ibis Styles India
“It is highly encouraging to see that the Hon’ble Finance Minister has underscored the vital role of tourism in driving our economy and boosting employment and GDP. The enhanced focus on developing tourism corridors at Vishnupad Temple and Mahabodhi Temple modelled after the successful Kashi Vishwanath Temple initiative, will significantly contribute to tourism growth during the Amrit Kal. Additionally, the government’s support for transforming Nalanda in Bihar into a major tourist destination is a noteworthy step forward. The robust allocation of Rs 11.11 lakh crore for capital expenditure also highlights a strong commitment to infrastructure development. However, to fully harness the potential of the hospitality sector and further enhance tourism, the government needed to consider more lenient tax policies and allocate a substantial budget to elevate hotel standards. We are optimistic that future support from the Government will include granting infrastructure status to the hospitality and tourism sectors, which will help us achieve long-awaited progress and drive sustained growth.”
Mr Anuj Rathi, Chief Business and Growth Officer, Cleartrip
“Today’s budget announcement is a welcome move that promises to strengthen India’s position as a global hub for spiritual tourism. The continued investment in developing corridors will create a multiplier effect, stimulating the local economy and generating job opportunities. This initiative will add to the momentum that the industry gained from the Ayodhya boom earlier this year. In the first half of 2024, Cleartrip has registered a double-digit increase in searches on a month-on-month basis for destinations such as Varanasi, Tirupati, Bhubaneswar, Bodh Gaya, Amritsar, and Ajmer. The enhanced focus on infrastructure and road connectivity will make travel, especially road transportation, more accessible and affordable. These initiatives will further bolster India’s status as a premier travel destination facilitating economic growth.”
Mr. Akash Bhatia, CEO of Eco Hotels and Resorts Limited
“The recent budget plan highlights a game-changing vision for India’s tourism industry. Building up the Vishnupad and Mahabodhi Temple corridors, along with the extensive development of Rajgir and re-establishing the Nalanda University, will elevate India’s cultural and historical charm. We’re delighted about the assistance in making Odisha an ultimate top spot for tourists. As one of the key players in the hotel business, we aim to ensure that our services will be exceptional enough to match these improvements and give guests amazing experiences that draw attention to India’s deep roots and vibrant culture.”
Mr. Aloke Bajpai, Chairman, Managing Director & Group CEO, Ixigo
“The government’s policy initiatives to enhance spiritual tourism are a welcome move towards growing domestic tourism as well as making India a global travel destination. We saw a 40-50% increase in demand for spiritual tourism last year, for destinations like Varanasi, Ayodhya, and Tirupati. The government’s PRASAD Scheme has led to a remarkable transformation in Varanasi’s tourism sector, attracting an unprecedented 100 million visitors to Kashi Vishwanath Dham after the corridor project completion. We expect a similar boost in tourism to Bihar and Odisha with spiritual tourism corridors coming up for Vishnupad Temple and Mahabodhi Temple at Bodh Gaya, along with comprehensive initiatives for Rajgir, Nalanda, and Odisha. We expect this to benefit our large next billion user (NBU) base which predominantly relies on buses and trains to access these spiritual towns, and where our market share continues to improve across modes of transport.”
Mr. Chirag Agrawal, Co-Founder of TravClan
“The Finance Minister’s proposals to develop tourism corridors at Vishnupad Temple and Mahabodhi Temple, along with support for Nalanda as a tourist hub, represent a positive leap towards enhancing India’s tourism infrastructure. These initiatives could stimulate local economies and attract more visitors, promising substantial growth for the travel and tourism sector. At TravClan, we believe that integrating these developments with advanced technology is crucial. Incorporating digital tools for better visitor management and promoting seamless travel solutions could significantly enhance their impact. While the focus on Odisha’s tourism is commendable, a more comprehensive strategy that leverages technology to address the needs of modern travel agents and improve domestic tourism efficiency would be even more beneficial. The economic policy framework for next-generation reforms is a step in the right direction, but practical implementations will be key to fully realizing these goals. Overall, the budget shows great promise for the tourism sector, and adopting innovative solutions could amplify benefits and drive sustainable growth in the industry.”
Mr. Aditya Sanghi, CEO & Co-Founder, Hotelogix
“The 2024 budget introduces impactful initiatives for the tourism sector, poised to enhance India’s global appeal as a tourist destination significantly. The government’s decision to promote Nalanda and Odisha, along with the focus on religious tourism, reflects a strategic and holistic approach that will drive economic growth and showcase India’s rich heritage.”
Ms. Naina Parekh, Founder, EUME
“The Union Budget 2024-2025 brings several transformative changes for the growing D2C sector. The reduction of the TDS rate for e-commerce operators from 1 per cent to 0.1 per cent is likely to ease their financial burdens, allowing them to concentrate more on scaling their operations and driving innovation. The proposed removal of the angel tax is expected to be a game-changer for startups, simplifying the fundraising process and reducing the tax-related challenges faced by new ventures. Furthermore, the new eco policy framework has put a spotlight on the development of tourism and regional growth in states like Bihar and Odisha. These states are projected to emerge as significant growth hubs, stimulating local economies and opening up new markets for D2C brands.”
Mr. Sandeep Arora, Director of Brightsun Travel, India
“The focus on boosting spiritual tourism honours the country’s rich cultural heritage and opens up new avenues for travel and tourism. The special focus on Bihar and Odisha will see extensive development and promotion of religious and historical sites such as Bodh Gaya, Rajgir, and Nalanda. Odisha also has great potential as a destination for religious and beach tourism. The new initiatives to improve infrastructure and connectivity in these offbeat destinations will attract both domestic and international tourists, offering a much-needed boost to the local economy.”
Mr. Chaitanya Tendolkar, Director of Westbay Resort & Spa
“The reduction of personal income tax increases the personal wealth of individuals for investment and discretionary spending, which will surely give a boost to the tourism industry. The budget also promises a simplification in GST, which might further benefit the hospitality industry. However, there was no direct benefit to Konkan tourism in the given budget.”
Mr. Davinder Juj, General Manager of Eros Hotel New Delhi
“We welcome the provisions presented in Union Budget 2024 by Finance Minister Nirmala Sitharaman, particularly the initiative to transform several iconic locations into world-class tourist destinations. This strategic move aims to attract businesses, support entrepreneurship, and create job opportunities for local communities. We also commend the government’s dedication to positioning India as a top global travel destination through targeted investments and strategic efforts. The development of prominent spiritual and cultural sites, along with the nation’s natural and scenic attractions, will attract both domestic and international tourists, bolstering the growth of the hospitality and travel sector.”
Mr. Jatinder Paul Singh, CEO & Co-Founder of Vacation Tourism
“We warmly welcome the 2024 Union Budget, which underscores a visionary approach to enhancing India’s tourism sector. FM Sitharaman’s commitment to developing Nalanda and the Nalanda-Rajgir corridor as premier tourist destinations is a significant step in reviving and promoting our rich cultural heritage. The proposed comprehensive development of the Vishnupad and Mahabodhi Temple Corridors modelled on the successful Kashi Vishwanath Temple Corridor, promises to elevate these spiritual sites to world-class pilgrim destinations. The focus on transforming Rajgir into a comprehensive development hub highlights the government’s dedication to preserving and showcasing our historical and religious landmarks. Additionally, the support for Odisha’s tourism infrastructure reflects a broader strategy to leverage India’s diverse attractions, from its scenic landscapes to its vibrant cultural and historical sites. These initiatives not only aim to position India as a global tourist destination but also to create significant job opportunities and stimulate investments across various sectors. We applaud this forward-thinking approach, which will undoubtedly enhance India’s global tourism profile and drive economic growth.
Ms. Chhavi Chadha, Founder, Bespoke Tailormade Experiences
“The latest budget announcement will bring a significant boost to tourism in India. The development of the Vishnupad and Mahabodhi temple corridors will transform these sites into world-class pilgrim and tourist destinations. Comprehensive initiatives in Rajgir and Nalanda will attract history and culture enthusiasts from all over the world. Additionally, the focus on Odisha underscores the government’s commitment to enhancing India’s diverse tourism offerings, making it an even more compelling destination for global travellers.”
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