India Domestic Tourism Push Backed By Hotel Industry

NEW DELHI, May 20, 2026: India's hotel industry has backed Prime Minister Narendra Modi's call for citizens to skip non-essential foreign travel, saying the domestic tourism push could generate jobs, draw investment into smaller cities and reduce the pressure that rising outbound travel has placed on the country's foreign exchange reserves.

The endorsements from the Hotel Association of India, Indian Hotels Company Limited and Radisson Hotel Group follow a public appeal Modi made on May 10, in which he urged Indians to postpone gold purchases and overseas trips as part of a broader set of economic measures tied to the ongoing West Asia conflict and its spillover effects on global fuel prices and currency stability.

India domestic tourism push draws hospitality sector support

KB Kachru, president of the Hotel Association of India and South Asia chairman for Radisson Hotel Group, said in the current volatile geopolitical environment, stronger domestic tourism would help conserve foreign exchange while building a more resilient and self-reliant travel ecosystem.

"India's domestic travel market has emerged as one of the strongest demand engines globally, driving hospitality growth, employment generation and infrastructure utilisation across metros as well as Tier II and III destinations," Kachru said.

He added that the government also needs to encourage inbound international travel in parallel, since foreign visitors directly add to the country's foreign exchange earnings rather than drawing them down.

Radisson and IHCL see opportunity in shifting traveller sentiment

Nikhil Sharma, managing director and chief operating officer for South Asia at Radisson Hotel Group, said India's hospitality sector was already gaining momentum from domestic travel before the prime minister's appeal, citing consistent demand from leisure destinations, spiritual tourism, destination weddings and the meetings, incentives, conferences and exhibitions segment.

"Nearly 50 per cent of our portfolio in India is located across Tier II and III cities. This reflects our long-term commitment to unlocking the tourism potential of emerging destinations and contributing meaningfully to India's evolving hospitality landscape," Sharma said.

Indian Hotels Company Limited, India's largest hotel chain and operator of the Taj brand, also signalled it expects demand to strengthen. Puneet Chhatwal, managing director and chief executive officer of IHCL, said the company sees growing opportunity from increasing preference for destination weddings held within India and from reduced outbound travel aimed at conserving foreign exchange. More than 88 per cent of IHCL's business and footprint sits within the domestic market.

"We see that as an opportunity if people are changing their plans," Chhatwal said.

Outbound travel decline already visible ahead of peak season

The prime minister's appeal landed at the start of a peak period for outbound tourism, when affluent Indian families typically seek summer destinations in Europe and Australia during the April to June school holiday window. Industry analysts said overseas summer travel inquiries fell by as much as 15 per cent in the days following Modi's remarks.

Rajiv Mehra, general secretary of the Federation of Associations in Indian Tourism and Hospitality, the umbrella body for hospitality firms across India, said outbound leisure travel and overseas destination weddings had expanded considerably over recent years, contributing to a measurable rise in foreign exchange outflows.

Sunil Kumar, president of the Travel Agents Association of India, also said the prime minister's call had the potential to redirect those spending patterns inward, though the full effect on outbound booking volumes would take weeks to quantify.

Tier II and III cities positioned as primary beneficiaries

Industry bodies identified smaller cities and emerging destinations as the segment most likely to gain from any sustained rise in domestic travel. HAI said increased domestic tourist flows into secondary markets would support infrastructure modernisation, small and medium enterprise growth in food and beverage services, local craft preservation and adventure tourism development.

Sharma of Radisson said the changing travel preference was encouraging more Indians to explore newer destinations within the country, contributing to local economies and tourism-led development in regions that have historically seen limited hospitality investment.

Modi framed his appeal as part of a wider economic responsibility narrative. "Every decision, including how and where we travel, has an impact on the country's economy," he said, asking citizens to align personal choices with national priorities during a period of global economic pressure.

What the push means for India's global hospitality standing

Industry executives argued that a well-supported domestic tourism market strengthens, rather than dilutes, India's appeal as an international destination. HAI said a more robust domestic base improves hotel asset utilisation, drives investment in property upgrades and raises the quality of hospitality infrastructure available to foreign visitors as well.

The Hotel Association of India pledged continued engagement with government bodies to help maximise the sector-wide benefits of the initiative. The Federation of Associations in Indian Tourism and Hospitality echoed the call for coordinated policy support to translate the prime minister's appeal into durable gains for the sector.

Sources: Business Standard (May 12, 2026); The Federal (May 13, 2026); IMP News (May 2026); Hotel Association of India statement; IHCL management commentary; Radisson Hotel Group South Asia statement.