The tourism sector is widely recognised as having the potential to be the engine for economic progress and job creation in India. As a soft impact sector, responsible tourism will be a critical factor in the ongoing environmental transition, viz growing rapidly while simultaneously reducing our carbon footprint, that India must tackle in conjunction with its domestic triple
transition in the economic, social and political domains. And it is the relatively underexplored high-end tourism segment — focused on curated luxury experiences, upscale accommodation, and bespoke cultural interactions – which can prove to be the game-changer.
Strengthening this niche can yield outsized returns, given that affluent travellers spend significantly more per trip, support specialised services, and demand higher standards that can catalyse broader sectoral improvements. But as with all good things, this approach comes with a caveat. Policymakers need to recognise that conceptually, a differential tourism model for various destinations in India is essential given the country’s economic heterogeneity and uneven developmental parameters. For example, Goa’s per capita income is 10x that of Bihar’s; a wide gulf also exists between various parts of India in, say, terms of security, connectivity, infrastructure, healthcare, and education levels.
It is, however, important to underline that bolstering high-end tourism is not to advocate adopting an elitist approach. It’s not simply about building five-star properties or marketing exclusive beach resorts. It calls for enabling an ecosystem that addresses infrastructure gaps, law-and-order concerns, and the need for well-trained personnel – issues that have long hampered India’s tourism ambitions. Shifting our focus to this upscale market, specifically
where private investment and/or PPP models can be promoted, could have a transformative impact on generating place-based job opportunities, boosting local economies, and destination branding.
But deep-rooted challenges continue to threaten India’s aspirations to become a premium experiential travel destination. Inadequate infrastructure and insufficient connectivity often keep high-end travellers away. For instance, while metropolitan hubs boast modern airports and safe and hygienic luxury accommodation, roads to heritage sites or rural tourism circuits can be poorly maintained, underserviced, and unpoliced.
The World Economic Forum’s Travel and Tourism Competitiveness Index has highlighted that India lags in tourism infrastructure, dragging down overall travel competitiveness. Social and law-and-order problems persist, fuelling safety concerns among prospective visitors. High-profile incidents can quickly undermine the image of a destination and deter those who seek a seamless, secure, and comfortable experience. In addition, Ease of Doing Business issues as well as inconsistent tax policies and high operating costs can prevent smaller businesses from upgrading to world-class standards.
The short point is that despite its abundant natural and cultural treasures, India is far from attracting the scale of luxury-traveller footfall seen in destinations such as Spain and France, or even closer home in Thailand, Dubai, and China.
Focusing on high-end tourism opens a range of economic possibilities that can uplift communities and spawn new enterprises. According to the World Travel & Tourism Council, luxury travellers can spend anywhere from three to five times as much as budget-conscious tourists. Their willingness to pay for premium accommodation, gourmet dining, and exclusive cultural tours injects significant revenue into local economies. This heightened spending supports not only hospitality ventures but also ancillary industries such as boutique retail,
specialised transportation, and niche event management.
On the societal front, high-end tourism can pave the way for meaningful cultural exchanges and philanthropy. Upscale travellers often appreciate immersive experiences that connect them to local communities, arts, and heritage sites. When these visitors become patrons of craft markets, museums, or conservation projects, they help preserve local traditions and
ecosystems while promoting a more intimate understanding of India’s cultural fabric. Also, young adults tend to benefit from specialised skills training in luxury hospitality and experiential tourism, enabling them to earn higher wages and cultivate careers in globally recognised brands.
Overcoming persistent barriers to high-end tourism demands a multi-pronged approach. Among the priorities are revamping infrastructure, particularly in areas with strong tourism potential yet limited accessibility. Projects focusing on improving regional airports, rail networks, and roads are crucial to connecting high-value destinations with major urban centres. Government initiatives like the UDAN Regional Connectivity Scheme show promise as they upgrade smaller airports and offer incentives for airlines to fly to less-served towns.
Simultaneously, public safety measures must be strengthened to reassure visitors. Augmenting tourist police units, employing technology-based surveillance in crowded spots, and imposing stricter penalties for offences against travellers can help reshape perceptions around personal security. Such interventions align with programs like Swadesh Darshan and Incredible India 2.0, albeit these need to be adapted to cater to the luxury tourist clientele.
Equally critical is the development of human capital. Luxury tourists expect impeccable service that hinges on well-trained employees with strong language, hospitality, and cultural engagement skills. Empowering local communities through vocational programs not only addresses skills shortages but also ensures that the economic benefits of tourism stay within the region – building long-term support and goodwill.
When wealthy tourists choose a destination, they often set off a “Dual Demonstration Effect.” First, their travels inspire others to follow the same path attracted and/or intrigued by the exclusivity and elevated experience. Secondly, the places they visit become models for other regions looking to cater to an upscale clientele. Popular high-end locales can illustrate how investments in environmentally-friendly construction, curated excursions, and personalised services boost a destination’s attractiveness across market segments. This phenomenon is particularly evident in countries where luxury resorts have introduced sustainable/ESG practices that later percolated to the broader hospitality industry.
In Kerala, select five-star backwater resorts have successfully adopted solar energy solutions, water recycling systems, and organic farming to supply their restaurants. When such innovations demonstrate profitability and win recognition, smaller businesses in the same supply chain often align to this template. High-end tourism, therefore, can create a virtuous cycle of improvements that ultimately benefit the entire tourism ecosystem.
Lastly, the role of responsible private investment is vital. Case studies reveal that high-end resorts in Rajasthan have partnered with heritage conservation groups to restore centuries-old forts, turning them into boutique hotels that respect traditional architecture while offering modern comforts. This not only enhances the region’s appeal but also involves local artisans in restoration work, boosting their livelihoods. When profit motives align with ethical operations, gender equity, and ESG practices, the entire community gains from better wages, infrastructure upgrades, and greater cultural pride.
Aditi Rawat and Ishan Joshi are, respectively, associate fellow and director programs & senior fellow, Pahle India Foundation.
