Beyond the map: Gen Z, experiential travel and offbeat locations drive India’s tourism shift in the Budget

By 2030, travel is projected to evolve into a high-frequency habit rather than a discretionary annual event as younger demographics drive a structural shift toward the experiential economy. Recognising this consumption pivot, the latest Yuva Shakti-driven Budget positions tourism as a critical economic multiplier.

The Budget 2026-2027, unveiled by FM Nirmala Sitharaman, saw major wins for manufacturing and deeptech startups, but it also provided a new impetus for the country's travel and tourism industry. The budget reduced the Tax Collected at Source (TCS) rate on the sale of overseas tour program packages from the current rates (5% and 20%) to a uniform 2%, without specifying the amount.

This renewed focus comes as travel and experiential spending grow among Gen Zs who are increasingly seeing it as an extension of their identity. This mirrors global findings from the World Economic Forum (WEF), which notes that unlike material goods, experiential purchases "tend to become more meaningful parts of one’s identity" and serve as a vital source of enduring happiness and social connection.

According to a report by Fireside Ventures, about 27 million individuals travel internationally, with this number expected to touch 40 million by the end of the decade. The premium tours and travel segment itself is expected to grow 3x during the same period.

Moreover, even within leisure, offline experiences have become key to personal fulfilment, with travellers looking for purpose-led, storytelling-driven, and offbeat destinations both domestic and internationally. As the WEF highlights, in an AI-driven world where digital content is frictionless and abundant, consumers are pivoting toward "scarce, sensory, unpredictable in-person experiences that technology cannot replicate." This has accelerated the demand for purpose-led, storytelling-driven, and offbeat destinations both domestically and internationally.

The budget also outlined the creation of five tourism destinations in the Eastern States as part of an integrated development plan.

As per data from the traveltech platform Cleartrip, cities like Dibrugarh, Imphal and Silchar recorded nearly 12x growth in 2025 compared to 2024. The shift was led by Gen Z, who accounted for the majority of flight bookings and more than 40% of hotel bookings in the region. The younger consumer cohort witnessed a staggering 650% growth in travel bookings in 2025.

Along with this, the budget doubled down on religious travel, nature-focused excursions and places of historical significance.

The government launched a scheme for the development of Buddhist Circuits, including the preservation of temples and monasteries and pilgrim amenities in key Eastern states. It also proposed opening excavated landscapes of historical sites like Dholavira, Lothal and Hastinapur for walkways, etc. The focus also included developing nature-rich sites like mountain trails, turtle trails and bird-watching trails across the country to tap into its rich animal biodiversity.

While the trend of premiumization demands exclusivity and convenience, unlocking the potential of remote destinations needs seamless connectivity, both digital and transport. To address this infrastructure gap, the government has introduced a Seaplane Viability Gap Funding (VGF) Scheme and manufacturing incentives to operationalise connectivity for hard-to-reach tourist hubs.