Alternative accommodation gains ground among Indian travellers: Report

A Booking.com and VIDEC report projects India's alternative accommodation gross booking value to reach $4.7 billion by FY29, with business travel and smaller cities driving growth

Homestays, vacation rentals, service apartments and more non-traditional accommodation options are becoming mainstream among Indian travellers with their growth rate surpassing hotels.

 

The major shift in India’s hospitality industry is reflected in the data of a joint report by the world's largest online travel aggregator Booking.com.

 

It found that over the last three years, digitally-distributed listings more than doubled from 102,200 in FY23 to 215,000 in FY26.

 

Total gross booking value, including online, also increased at a faster clip, from $862 million in FY23 to $2.6 billion in FY26. This is projected to nearly double to $4.7 billion by FY29.

 

Alternative accommodation has a growing contribution to India’s broader $92.7 billion travel market, according to a joint report titled “How India Travels 2026: The Homes Edit” by Booking.com and travel advisory and research firm VIDEC consultants.

 

 

The report highlighted that business travel, typically associated with hotel stays, now accounted for about 19 per cent of alternative accommodation room nights in FY26, which was projected to reach 21 per cent by FY27. This comes as business travellers are increasingly turning to service apartments, aparthotels, and private villas, revealing a shift in corporate travel.

 

“Alternative stays are securing mid-week corporate demand, reducing host reliance on weekend leisure cycles,” the report added.

 

The pace of supply growth is expected to moderate from the 26 per cent recorded in FY26.

 

Additionally, alternative accommodation is expected to add capacity in undersupplied destinations and during major events.

 

While major metros and classic vacation spots accounted for 46 per cent of the total inventory in FY26, the growth is shifting towards Tier-II cities, religious centres and emerging leisure corridors.

 

This is reflected in listings across cities such as Greater Noida, Ghaziabad, Indore, and Ayodhya.

 

Highlighting the use of portals to further boost the segment, Bhuvnesh Kumar, secretary, Ministry of Tourism, said, “Access to finance remains critical for small homestay owners seeking to upgrade their properties and meet evolving standards. This could involve adding rooms, improving sanitation or other amenities.”

“We realised that some potential applicants are not highly literate or comfortable navigating banking processes. Therefore, we created a step-by-step booklet explaining how to use the JanSamarth portal and apply for the loan,” he added.

 

On the recurring issue of demand outpacing supply, Santosh Kumar, regional head, South Asia, Booking.com, said, “Alternative accommodation is only generating additional demand overall in the travel and tourism industry in India. It is fulfilling a little bit of an unmet need as well.”

      

A number of factors including trust, professionalism, quality standards, safety and support would be crucial factors to further strengthen the alternative accommodation segment in the country, executives added.