Iran war disruptions, Modi’s appeal to boost India’s hospitality sector
Hello, I am Priyanka Salve, writing to you from Singapore.
Welcome to the latest edition “in india“ — your one-stop source for stories and developments from the world’s fastest-growing major economy.
The conflict in the Middle East affected the Indian economy; Prime Minister Narendra Modi appealed to citizens to restrict foreign travel, save fuel and even stop buying gold. This gloomy-sounding appeal is proving to be a boon for India’s domestic travel and tourism industry.
Read on!
Have an opinion on today’s newsletter? share them with the team.
big story
The conflict in the Middle East is causing severe economic pain in India, with the currency weakening, the import bill rising and concerns mounting. slowdown in growth.
But there is a bright side: The domestic tourism sector is showing signs of boom.
Earlier this month, Indian Prime Minister Narendra Modi called on citizens to reduce their foreign travel in order to preserve India’s foreign exchange reserves, under pressure from a rising import bill due to a rise in global energy prices.
The Indian rupee has fallen over 6% against the dollar so far, making it among Asia’s worst-performing currencies, according to LSEG data. This weakening of the currency, combined with inflated jet fuel prices, also led Air India, one of the country’s leading airlines, to cancel more than a quarter of its international flights between June and August.
All this coincides with the peak season for Indian tourists traveling abroad, and with schools remaining closed for more than a month, it is easier for families to take longer holidays to escape India’s summer heat, experts told CNBC.
Indian Hotels Company, the country’s largest hospitality group and the parent company of luxury chain Taj Hotels, told CNBC’s “Inside India” that Modi’s advice “will benefit the domestic tourism industry.”
Domestic travel boom
Industry leaders and industry experts told CNBC that Indian travelers have started choosing local destinations.
“Domestic travel has gained importance; 42% of travelers prefer to explore their own country. This trend [is] It has been particularly observed in India, China and the United States, according to a report by global travel insurance giant Allianz Partners earlier this month.
The report, based on a survey conducted by Ipsos, said this trend may reflect “a preference for affordable travel options while enjoying familiar sights and supporting local tourism industries.”
Many accommodation establishments in India confirmed this trend and reported a sharp improvement in occupancy rates and room rates from May onwards.
A woman poses for a photo against the backdrop of the Hawa Mahal, or “Palace of Winds,” at a rooftop cafe in Jaipur on May 2, 2026. (Photo: Manan VATSYAYANA / AFP via Getty Images)
Manan Vatsyayana | Afp | Getty Images
Rajeev Menon, Marriott International’s head of APAC ex-China, told CNBC.Squawk Box Asia” noted that revenue per available room “returned to double digits” in May and “velocity continues to be quite strong” in the coming months.
The accommodation chain’s revenue per available room fell in March, dashing expectations for double-digit growth due to conflict in the Middle East.
Given the challenges arising from conflict in the Middle East, “I think what’s emerging now is that people are shifting and changing their plans to stay in Asia.” [are] I try to avoid going too far,” Menon said.
More than once in 2025 14 million Indians He took holiday trips abroad, according to government data. Experts said that as disruptions from the war in Iran continue, a significant portion of this income will shift to local tourism.
Devendra Parulekar, founder of SaffronStays, said that over the past few weeks, travelers who might opt for summer holidays abroad are choosing to explore destinations within India.
SaffronStays, India’s popular premium vacation property rental platform, told CNBC that May bookings were up nearly 40%, while forward bookings for June were up almost 50% from the previous year.
The firm is seeing rising demand for its luxury properties in the Himalayan foothills as travelers struggle to escape to Europe to beat the heat of the scorching Indian summer.
Indian Hotels Company is monitoring the opportunities arising from migration from foreign places to India, especially in destination weddings.
A study by industry body All India Traders Confederation predicts weddings create jobs It is worth 6.5 trillion rupees (about $68 billion) during the peak season from November to December 2025.
Indian Hotels Company CEO Puneet Chhatwal said that with the shift to domestic locations, wedding celebrations could become a “much bigger business”.
This will increase demand for hotels, which is already outstripping supply, he said, adding that the Indian hotel chain expects “an increase of at least 8% to 12%” in room rates.
The World Travel and Tourism Council is highly optimistic about increasing travel from India, predicting that the opportunity could be as large as China in the next decade. However, until the disruptions caused by the Iran war continue, Indian travellers’ passion for travel is unlikely to cross borders.
you need to know
Indian telecom giant Bharti Airtel doubles down on Africa venture British BT
India’s second largest telecom company Bharti AirtelIt is increasing investment in its businesses in Africa and the UK, joining a growing number of companies from the South Asian country looking to expand their global footprint.
India, US discuss Middle East and trade as Rubio says progress in Iran conflict
While US Secretary of State Marco Rubio held talks with Indian Secretary of State S. Jaishankar on Saturday, the two sides discussed the Middle East, trade, visas, maritime security and energy supply.
Yotta Data Services predicts a $100 billion boom in Indian data centers
Sunil Gupta, co-founder and managing director of Yotta Data Services, said India’s AI ecosystem is approaching an inflection point and he expects the country to see a massive wave of data center investments totaling $100 billion in the coming years.
approaching
May 28: Indian Industrial Production in April.
June 3: India HSBC composite PMI data for May.
