India’s alternative stays market to hit ₹41,500 crore by FY29 as tech-savvy hosts boost revenues: Booking.com

India’s alternative accommodation market is projected to reach ₹41,500 crore in gross booking value (GBV) by FY29, as vacation rentals, homestays and apartments gain traction beyond traditional tourist hotspots, according to Booking.com’s How India Travels 2026 – The Homes Edit report, released in partnership with VIDEC Consultants.

The segment is expected to grow at a compound annual growth rate (CAGR) of 21.2% through FY29, outpacing the broader travel market valued at ₹8.2 lakh crore. Digitally distributed alternative accommodation listings more than doubled from 1,02,200 in FY23 to 2,15,000 in FY26. The category currently accounts for around 13% of lodging GBV, while online searches for alternative stays rose 6% between FY24 and FY25, against 2% for hotels.

“The overall growth of alternative accommodation marks a major inflection point in India’s travel economy,” said Santosh Kumar, Regional Head, South Asia, Booking.com. He said the segment was driving tourism expansion in non-metro markets and regional hubs, with technology helping local hosts build sustainable and scalable businesses. “Alternative accommodation is no longer an ‘alternative’; it has become a core driver of modern travel culture across the country,” he added.

Emerging destinations and corporate demand

Although metros and established holiday destinations accounted for 46% of inventory in FY26, supply is expanding into smaller cities. Listings in Greater Noida, Ghaziabad, Indore and Ayodhya more than doubled between June 2025 and June 2026, with reported growth ranges of 114%-179%, 86%-163%, 101%-131% and 95%-108%, respectively.

The opportunity is reinforced by an estimated shortage of more than 2 lakh hotel rooms in India, cited from NITI Aayog’s 2025 homestay report.

Business travel accounted for 19% of alternative accommodation room nights in FY26 and is projected to reach 21% in FY27. Aparthotels held an 18% share of this demand and apartments 13%. Travellers cited additional living space and separate bedrooms or workspaces (41%), accommodating family members or colleagues (40%), local experiences (39%) and better value for extended stays (37%) as key motivations.

Technology is also improving property economics. Across Bengaluru, Goa, Hyderabad, Jaipur, Mumbai, Pune and Siliguri, properties with high dynamic-pricing scores generated 108%-190% higher revenue per available room (RevPAR) than those with fixed pricing, with Goa recording the highest differential at 190%.

Formalisation remains key to growth

VIDEC Consultants Co-Founder and CEO Virendra Jain said the sector was entering a more mature phase, with formalisation, technology adoption, consistent quality and destination infrastructure critical to sustaining growth.

Meanwhile, PayU data cited in the report showed online travel payments growing 20%-35% year-on-year. Card-based flexible payment options, including buy now, pay later and equated monthly instalments (EMIs), increased their share of travel transactions from 6% to 15% over 18 months.

The report, based on surveys conducted in June 2026 among 2,359 consumers and 1,131 alternative accommodation property owners and managers, underscores the importance of reliable listings, consistent service and easier access to finance as the sector expands.