Booking.com Report: India's Alternative Stays Market Nears ₹415 Billion

India's Alternative Accommodation Market Set for Expansion

India’s alternative accommodation market is projected to achieve a Gross Booking Value (GBV) of ₹415 billion by fiscal year 2029, according to the 'How India Travels™ 2026 – The Homes Edit' report. This study, the fourth edition from Booking.com in partnership with travel advisory firm VIDEC Consultants, indicates a significant shift in Indian hospitality.

The segment is growing at a 21.2% compound annual growth rate (CAGR) through FY29, outpacing the overall Indian travel market. It currently represents approximately 13% of the total lodging GBV within India’s broader ₹8,200 billion travel market.

The report draws on extensive research, including responses from 2,359 consumers and 1,131 alternative accommodation property owners and managers, highlighting the sector's transition from a niche offering to a mainstream travel option.

Evolving Traveller Preferences Drive Demand

Changing preferences among Indian travellers are a primary catalyst for this growth. The Booking.com and VIDEC Consultants report reveals that for leisure travel, 87% of surveyed travellers believe alternative stays help create more meaningful memories. Additionally, 85% choose these options for authentic local experiences, while 83% find them ideal for families and groups.

A similar proportion, 83%, considers them to offer great value for money and views them as a more sustainable choice. This increasing interest is reflected in online search trends, with alternative accommodation searches growing 6% between FY24 and FY25, compared to a 2% increase for traditional hotels over the same period.

Business Travel Emerges as a Key Growth Segment

Beyond leisure, business travel is increasingly contributing to the alternative accommodation sector. Business travellers accounted for nearly one in five bookings (19%) in FY26 and are projected to reach 21% by FY27.

Their motivations include the desire for more living space or a separate bedroom/workspace (41%) and the ability to accommodate accompanying family members or colleagues (40%). Apartments and aparthotels are leading this trend, offering professionals flexible environments that blend living, working, and meeting spaces.

This shift extends beyond long-term assignments, with business travellers now considering these properties for shorter trips, seeking more authentic and localised experiences (39%) and better value for extended stays (37%).

Expansion into Emerging Destinations and Digital Adoption

The growth of alternative accommodation is also expanding India's travel map beyond traditional beach and hill station destinations. While major metros and classic vacation spots still comprise 46% of total inventory in FY26, improved connectivity and evolving travel habits are driving growth towards Tier-2 cities, religious centres, and emerging leisure corridors.

Between June 2025 and June 2026, alternative accommodation listings more than doubled in cities such as Greater Noida, Ghaziabad, Indore, and Ayodhya. This expansion helps address an estimated shortage of over 200,000 hotel rooms across India, as identified by NITI Aayog’s 2025 homestay report.

Furthermore, digital distribution and dynamic pricing strategies are proving to be significant revenue multipliers, with properties using dynamic pricing in certain cities, like Goa, generating up to 190% higher RevPAR.

Implications for Asia's Travel Industry

The robust growth observed in India’s alternative accommodation sector provides a strong precedent for other Asian economies with similar demographic and travel trends. Markets such as Indonesia, Vietnam, and the Philippines, which also boast large domestic tourism bases and a growing demand for localised travel experiences, can anticipate similar patterns.

Industry players in these regions may see increasing opportunities to invest in and develop non-traditional lodging options, especially those that cater to both leisure and business segments. Future success will likely hinge on adopting advanced digital distribution strategies and professional management practices, mirroring the revenue gains seen with dynamic pricing in India.