• From a fragmented niche to a mainstream choice : the report explores evolving traveller preferences, emerging destinations and how increasingly professional hosts are reshaping alternative accommodation across India.

INDIA, October 14, 2026: Booking.com, one of the world’s leading digital travel platforms, in partnership with travel advisory and research firm VIDEC Consultants, today launched the fourth edition of its flagship research report, ‘How India Travels™ 2026 – The Homes Edit’.

The study highlights a fundamental shift in Indian hospitality: alternative accommodation, encompassing vacation rentals, apartments and other non-traditional accommodation options, is rapidly transforming from a niche preference into an increasingly important part of India’s travel economy. The segment’s total Gross Booking Value (GBV) is projected to reach ₹415 billion by FY29, reflecting its growing contribution to India’s broader ₹8,200 billion travel market1.

As travel becomes more experience-led, Indian travellers are looking beyond conventional accommodation to stays that connect them with local food and culture. From family holidays and group getaways to emerging leisure destinations and business trips, alternative accommodation is expanding the possibilities of travel while bringing new destinations and stay experiences into focus.

Shri Bhuvnesh Kumar, Secretary of Ministry of Tourism, Government of India, 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. A separate window for homestays was announced earlier under the Mudra framework and we used that opportunity to prepare practical guidance for owners. 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.”

Shri Suman Billa, IAS, Additional Secretary & Director General, Ministry of Tourism, Government of India, said: “India is expanding travel opportunities and making tourism-led growth more inclusive. The government is strengthening connectivity and destination infrastructure, improving access to finance and skills for micro-entrepreneurs and women-led businesses and raising quality standards, thus helping tourism businesses thrive and delivering better experiences for travellers.”

Alternative Accommodations: Not so ‘Alternative’ Anymore

The alternative accommodation market has expanded rapidly over the last three years with digitally distributed listings increasing from 102,200 in FY23 to 215,000 in FY261. Although supply growth is expected to moderate after a 26% surge in FY26, the segment’s GBV is still projected to grow at 21.2% CAGR through FY291, outpacing the overall travel market.

Despite supply expansion, the category remains underpenetrated relative to the broader accommodation industry. Alternative accommodation currently represents around 13% of lodging Gross Booking Value, while online searches for the category grew 6% between FY24 and FY25 compared with 2% for hotels2.

Unlocking India’s Emerging Travel Destinations

Alternative stays are expanding well beyond traditional beach and hill station destinations. While major metros and classic vacation spots still account for nearly half of total inventory in FY26 (46%), better connectivity and evolving travel habits are rapidly shifting growth toward Tier-2 cities, religious centers and emerging leisure corridors1. According to NITI Aayog’s 2025 homestay report, India faces an estimated shortage of more than 200,000 hotel rooms, creating opportunities for alternative accommodation providers to help add capacity in undersupplied destinations and during sharp bursts of demand around major events. In fact, between June 2025 and June 2026, alternative accommodation listings more than doubled in cities like Greater Noida, Ghaziabad, Indore and Ayodhya2.

The Stay is Becoming Part of the Experience

Today’s travellers are placing greater emphasis on the role accommodation plays in shaping their overall trip. When planning leisure travel, 87% say alternative stays help create more meaningful memories, 85% choose them for authentic local experiences, 83% find them ideal for families and groups. Additionally, 83% feel they offer great value for money, while a similar number consider them a more sustainable choice3.

Business Travel Emerges as a New Growth Driver

Alternative stays aren’t just for long weekends anymore. Business travellers now account for nearly 1 in 5 bookings (19% in FY26) at alternative accommodation (projected to reach 21% by FY27)1. Apartments and aparthotels are leading the charge as professionals look for spaces where they can seamlessly blend living, working and meeting in a single stay.

Beyond long-term work assignments, business travellers are now considering these properties for short business trips as well. Primary motivators for business travellers include more living space and a separate bedroom or workspace (41%), ability to accommodate accompanying family members or colleagues (40%), more authentic and localized experiences (39%) and better value for long-stays (37%)3.

Tech and Professional Hosts Drive Next-Gen Stays

As the market scales, digital distribution and tech adoption are acting as direct revenue multipliers. Across Bengaluru, Goa, Hyderabad, Jaipur, Mumbai, Pune and Siliguri, properties with high dynamic-pricing scores generated 108% to 190% higher RevPAR than those with fixed pricing, with Goa recording the highest differential at 190%4. Higher dynamic-pricing adoption may also reflect more professional management and stronger listing practices.

What was once largely a fragmented market of individual hosts is steadily evolving into a more organised ecosystem supported by technology platforms, specialist operators and data-driven pricing strategies. The trend reflects a broader shift towards professionalisation, with hosts approaching accommodation as a business rather than a supplemental source of income.

Santosh Kumar, Regional Head, South Asia at Booking.com, said: “The overall growth of alternative accommodation marks a major inflection point in India’s travel economy. We are seeing a fundamental shift where alternative accommodation is no longer just supplementary inventory, it is actively driving tourism expansion in non-metro markets and regional hubs. As local hosts adopt tech-driven tools, they are not only meeting the diverse demands of modern travellers, but are also building sustainable, scalable business models that contribute directly to local economies. Alternative accommodation is no longer an ‘alternative’; it has become a core driver of modern travel culture across the country.”

Virendra Jain, Co-Founder & CEO, VIDEC Consultants, said: “India’s alternative accommodation segment is entering a new phase of maturity. What began as a largely fragmented supply base is becoming an important part of the country’s wider travel ecosystem, supported by growing demand, digital distribution and improving operating capabilities. The opportunity now lies in strengthening the foundations of this growth through greater formalisation, technology adoption, consistent quality and destination-level infrastructure, while ensuring that the diversity and local character of these stays remain at the heart of the experience. We are pleased to partner with Booking.com for this edition and outlining the industry’s next growth segment.”

Powering Long-Term Scale

The report notes that policy and infrastructure development will continue to play an important role in supporting the sector’s next phase of growth. National initiatives such as MUDRA, UDAN, PM Gati Shakti, Swadesh Darshan 2.0 and PRASHAD are improving connectivity, strengthening tourism infrastructure and expanding access to financing. At the state level, efforts such as Kerala’s classification standards and Goa’s focus on tourism diversification are helping encourage greater formalisation and quality assurance within the sector.

The broader travel payments ecosystem is evolving alongside these changes. PayU data shows online travel payments growing between 20% and 35% y-o-y, while flexible payment options such as Buy Now Pay Later and EMI products have increased their share of travel transactions from 6% to 15% over the past 18 months.

As alternative accommodation becomes a larger component of India’s travel economy, the next phase of growth will depend not only on increasing supply, but also on building the digital, operational, financial and policy infrastructure required to make that supply more discoverable, trusted and commercially sustainable. Accurate listings, consistent quality, smooth check-ins and dependable guest support will be key to building credibility, winning over hesitant travellers and creating a trusted, investable and scalable alternative accommodation ecosystem.

Full Report & Insights: howindiatravels.com