Booking.com’s How India Travels 2026: The Homes Edit, released on October 14, projects India’s alternative accommodation market to reach INR 415 billion by FY29, driven by rapid supply expansion in recent years.
The fourth edition, developed alongside VIDEC Consultants, forecasts the market’s gross booking value (GBV) to have climbed from INR 68.9 billion in FY23 to INR 233.1 billion by FY26.
Santosh Kumar, Regional Head, South Asia at Booking.com, stated, “Alternative accommodation is no longer an ‘alternative’; it has become a core driver of modern travel culture across the country.”
Growing Demand for Alternative Accommodation
The report’s outlook points to a swiftly expanding sector including homestays, villas, apartments, serviced apartments, guesthouses, bed and breakfasts, and other non-traditional lodging formats.
Research cited by VIDEC Consultants indicates villas are primarily chosen for leisure travel, with 95% of overnight stays linked to leisure and just 5% to business travel.
The analysis reveals the segment’s rapid evolution from a niche choice to a significant contributor in India’s travel economy, with digitally distributed listings surpassing 2 lakh in FY26.
The report highlights that properties within a two-to-five-hour drive of major cities are increasingly viable for weekend getaways, fueling growth in this sector.
Formalisation and Quality
Despite robust expansion, the report flags digital adoption, service consistency, quality, and formalization as critical areas needing improvement, with Suman Billa, IAS, Additional Secretary & Director General, Ministry of Tourism, Government of India, advocating for stricter accreditation and quality benchmarks.
Billa remarked, “Even if you start building all of the hotels today, there are several of them which are in the pipeline, but you will still require a lot of accommodation,” showing the gap between rising demand and available supply.
He pointed out that many invest in extra residential units without renting them, creating opportunities for alternative accommodation to add capacity ahead of new hotel construction.
The report argues that distributed lodging can help destinations manage demand beyond established hotel zones, extending spending to neighboring areas, with business travel emerging as a key growth driver.
Business travelers now account for nearly 1 in 5 bookings at alternative accommodations, led by apartments and aparthotels, as professionals seek integrated living, working, and meeting spaces during stays.
Half of the surveyed business travelers reported frequently selecting alternative options for work trips, citing space, flexibility, and local experiences as main reasons.
Future growth hinges on developing digital, operational, financial, and policy infrastructure to make alternative lodging more discoverable, trusted, and commercially viable, supported by national initiatives like MUDRA, UDAN, PM Gati Shakti, Swadesh Darshan 2.0, and PRASHAD.
Alternative lodging is gaining traction beyond traditional beach and hill destinations, with increasing supply and interest across cities, religious centers, secondary towns, and emerging leisure corridors.
Nearly half of listings were concentrated in cities and metros in FY26, with 27% in hill destinations, 23% in metros, 23% in cities and towns, 18% in beach areas, and 10% in religious hubs.
Expansion into Tier-II Markets
According to the report’s aggregated data, Greater Noida, Ghaziabad, Indore, and Ayodhya saw over a doubling of alternative accommodation listings between June 2025 and June 2026.
Virendra Jain, Co-Founder & CEO at VIDEC Consultants, stated the opportunity lies in strengthening growth foundations through formalization, technology adoption, consistent quality, and destination-level infrastructure.
Online alternative accommodation is projected to grow at a faster 25.9% CAGR, with online GBV rising from INR 9,340 crore in FY26 to INR 18,660 crore by FY29.