A growing preference for local experiences, family holidays and flexible business travel is driving demand for holiday rentals, serviced apartments and homestays across India
India’s alternative accommodation market is projected to reach ₹41,500 crore in gross booking value by the financial year 2028-29, as travellers increasingly look beyond traditional hotels for holidays and business trips, according to a report by Booking.com and VIDEC Consultants.
The report, How India Travels 2026 – The Homes Edit, estimates that the segment will grow at an annual compound rate of 21.2% through FY29, outpacing the wider travel market. Alternative accommodation includes homestays, holiday villas, serviced apartments, guesthouses and bed-and-breakfast establishments.
The number of digitally listed alternative accommodation properties more than doubled from 1,02,200 in FY23 to 2,15,000 in FY26. The segment currently accounts for around 13% of the gross booking value of India’s lodging market.
Online searches for these stays increased by 6% between FY24 and FY25, compared with 2% growth for hotels, indicating rising interest in accommodation offering greater space, privacy and local experiences.
Smaller cities emerge as growth centres
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The expansion is increasingly extending beyond major cities and established holiday destinations
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Listings in Greater Noida, Ghaziabad, Indore and Ayodhya recorded substantial growth between June 2025 and June 2026, according to the report
The trend could help address India’s shortage of hotel rooms, particularly in emerging tourism destinations and pilgrimage centres that experience sharp increases in visitor numbers during festivals and peak seasons.
Business travel is also becoming an important market. It accounted for 19% of alternative accommodation nights in FY26, with its share projected to rise to 21% in FY27.
Travellers cited additional living and working space, the ability to accommodate family members or colleagues, authentic local experiences and better value for longer stays among their reasons for choosing these properties.
Technology and quality remain key challenges
Technology is helping property owners improve revenue through digital bookings and flexible pricing. The report found that properties adopting dynamic pricing generated between 108% and 190% higher revenue per available room than those relying on fixed rates across seven surveyed markets.
However, the sector’s long-term growth will depend on consistent service standards, better infrastructure, access to finance and greater formalisation. Improving property quality and reliability will be important as alternative accommodation becomes a more established part of India’s tourism industry.
The findings are based on surveys conducted in June 2026 among 2,359 consumers and 1,131 alternative accommodation property owners and managers.
