The travel and tourism sector is in a ‘wait-and watch’ mode after Prime Minister Narendra Modi’s call for austerity in travel, among other things. The PM’s call to cut down on foreign trips and overseas destination weddings, and opt for destinations within the country instead, spells good news for domestic tourism, already on an upward path.

In 2025, domestic tourist visits were estimated at 4,548 million, an increase of 54% from 2948.19 million in 2024. An HVS Anarock report suggests this number could exceed 9,500 million by 2030.  At the same time, Indians are increasingly travelling abroad. Indian national departures during 2025 reflected a growth of 5.9% over the previous year, and 21.5% compared to 2019. 

Anil Chadha, managing director, ITC Hotels, told FE: “Domestic tourism has always been a strong pillar of the Indian tourism sector, and this renewed focus can further strengthen local livelihoods, regional economies and allied industries across the country.

India offers an unmatched diversity of experiences from beaches and wellness retreats to heritage destinations, wildlife and spiritual tourism, making it possible for travellers to explore world-class destinations within the country itself.”

He added that during the upcoming holiday season, destinations such as Goa, Rajasthan, Kashmir and the Himalayan circuits are expected to witness strong interest, creating a positive multiplier effect for the broader hospitality and tourism ecosystem.”

What did HAI chairman say?

Hotel Association of India (HAI) president and chairman, South Asia, Radisson Hotel Group, KB Kachru, told FE: “Prioritising domestic travel can accelerate domestic consumption and presents a huge opportunity for India’s tourism and hospitality sector. It will also contribute meaningfully towards conserving foreign exchange.”

Kachru, however, added that “there is also a need for the government to encourage and support inbound travel, which will help boost foreign exchange reserves.” Rajiv Mehra, general secretary of Federation of Associations in Indian Tourism and Hospitality (FAITH) advocated easing visa restrictions, improving connectivity, and strengthening India’s tourism promotions abroad to attract more foreign tourists and boost forex reserves.

Foreign travel arrivals in India were 90.2 lakh in 2025, 9.4% lower than the previous year. Hospitality players said it is still early to gauge the full impact, and the industry has not seen any slowdown in bookings or travel demand so far. 

Nikhil Sharma, managing director & COO, South Asia, Radisson Hotel Group, sees this as an opportunity. “At Radisson Hotels, we are seeing this as a positive shift to strengthen our presence across diverse Indian markets through curated hospitality experiences tailored for domestic travellers.

Nearly 50% of our portfolio in India is located across tier II and III cities, and increased domestic travel will just unlock the tourism potential of emerging destinations.” Vision 2047 for India’s tourism sector envisages a $3-trillion tourism economy, 100 million inbound visitors, 20 billion domestic visits, and nearly 200 million tourism-related jobs.

Renuka Kaushik, head of marketing, Jaypee Hotels & Resorts, said a shift is likely to be in spending patterns rather than travel intent, with consumers preferring shorter holidays, domestic destinations, intimate celebrations, and affordable experiences.

“The hospitality and travel sector entered 2026 on a strong footing, driven by domestic tourism, weddings, MICE activity, experiential travel, and premium leisure demand. In this context, the Prime Minister’s appeal may lead to a more cautious consumer mindset in the short term, especially among middle-income households.”

Adverse forex rates and rising airfare costs are already discouraging foreign travel, while the current geopolitical situation is prompting many travellers to shift their summer holidays to India.

“Summer family holidays and driving destinations are seeing a strong revival especially in north regions like Himachal and Uttarakhand. Similar to the Covid period, whenever the global environment becomes turbulent, people tend to holiday closer to home,” said Devendra Parulekar, founder, SaffronStays, a network of private luxury vacation homes. 

Rikant Pittie, CEO and co-founder of travel portal EaseMyTrip, felt that the Prime Minister’s recent appeal will lead to a gradual shift towards more purpose-led and value-conscious journeys. “This momentum towards domestic tourism could see further encouragement, while also supporting local economies and the broader tourism ecosystem.” 

Ayu Tripathi, director, Aahana Resort & Spa, felt travellers may become more selective about the journeys they take, thus creating an important moment for India’s domestic luxury hospitality sector to evolve more distinctly and confidently.

However, the PM’s urge to restrain discretionary spending on the whole will also impact MICE travel, a strong revenue stream for the sector, and may curb spending limits. Several India Inc leaders have responded to the PM’s clarion call by pledging to cut down on unnecessary travel, which will impact MICE revenues.

Harsh Goenka, chairman of RPG Group, posted on X that “as responsible citizens we should try our best to contribute in whatever way we can.” Corporates like Mercedes-Benz India and Diageo India are already on record promising to prioritise virtual meetings and ensure only critical travel.

An HUL spokesperson said on the appeal to cut travel: “We continuously review our business travel to ensure it is essential and aligned with business priorities. The company follows a hybrid work model, with employees coming to the office at least three days a week, while offering flexibility for those with specific needs.”