RANY NEAR-TERM MODERATION IN OUTBOUND TRAVEL IS LIKELY TO FURTHER SUPPORT DOMESTIC DEMAND ACROSS KEY LEISURE AND HERITAGE DESTINATIONS |
– ANURAAG BHATNAGAR, CEO,
THE LEELA PALACES, HOTELS
AND RESORTS
Travelers who might have booked overseas summer holidays are instead choosing destinations within India that are helping shore up the country’ s economy. Several hospitality operators confirmed the trend, reporting sharp improvement in occupancies and room rates from May 2026 onward.
They may have their prime minister to thank. At a public event in Hyderabad on May 10, Prime Minister Narendra Modi made an unusual appeal to ordinary Indians, asking them to put foreign travel plans
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on hold. It was not a policy announcement or a government directive; rather, a personal appeal, the kind a leader makes when a situation feels genuinely urgent. India’ s luxury hotel industry players say the shift in sentiment is already benefiting domestic hotels, resorts, homestays, airlines, spiritual tourism circuits and regional travel destinations.
The government’ s backing goes well beyond a plea. India’ s Union Budget 2026 to 2027 designates tourism as a highimpact growth sector, with targeted investment flowing into destination development, cultural revitalization and hospitality infrastructure. The government’ s Vision @ 2047 program, which aims to attract 100 million foreign visitors, is directly stimulating hotel development across the country.
Indian policy-driven initiatives, which include Buddhist circuit developments, medical tourism hubs, eco-trail corridors and cultural circuits, are generating consistent room demand in areas that previously
Fi’ lia at Roswyn, Morgans Originals Hotel in Mumbai.
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The Writers Bar at Raffles Jaipur.
saw less hospitality investment. Government-backed airport expansion and improved domestic connectivity have further reinforced demand.
OPENING UP Accor, one of the leading luxury lodging purveyors in India, opened Fairmont Mumbai last spring, a 446-room property featuring five restaurants, a grand ballroom with capacity for more than 2,000 guests and a wellness suite combining cryotherapy and hyperbaric
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oxygen with Ayurvedic healing. Months later, Fairmont Udaipur Palace opened across 18 acres of lakeside grounds, with 327 rooms and more than 130,000 square feet of event space. Udaipur has since become one of India’ s primary addresses for luxury weddings and large-scale destination events. Accor has set a target of 300 hotels in India by 2030.
“ India is central to Accor’ s long-term growth strategy because it combines three factors that are rarely present
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