India’s vacation rentals market is projected to reach USD 2.39 billion by 2025: Statista

Women host almost 30 pc of Airbnb rentals in India

The demand for home rentals in India has surged as travellers opt for private spaces over costly hotel rooms. This shift in preferences has fuelled significant growth in the market, with vacation rentals market projected to reach USD 2.39 billion in 2025, says a report by Statista.

Gone are the days when while travelling most people were forced to book expensive accommodation in hotels or serviced apartments. Nowadays, travellers, particularly those travelling with families or in groups, are seeking more private spaces with greater amenities.

This trend has contributed to the rapid rise of Airbnb and home rentals over the past decade. The surge in popularity has led many individuals to invest in properties not just for a place to live, but with the goal of having the property pay for itself.

According to Airbnb officials, India emerged as one of the fastest-growing markets for Airbnb in 2024, with domestic bookings increasing by over 30 pc year-on-year. This growth is driven by the rise of group travel and experiential travel trends, with women hosts alone earning approximately INR 2.6 billion. Additionally, bookings by first-time users in India increased by 25 pc in the first three quarters of 2024 compared to the previous year.

This growth is not limited to Airbnb, but also extends to homestays and other home rental platforms. In India, the vacation rentals market is projected to reach USD 2.39 billion in 2025, growing at an annual rate of 7.71 pc to hit USD 3.22 billion by 2029, as per market research firm Statista. The key driver behind this growth is the under-supply of hotels, with India having only 2.6 hotels per 100,000 people, far below the global average.

In addition, many young people moving to new cities have begun opting for Airbnb rentals over long-term leases, allowing them to save on rent. Similarly, property owners are increasingly preferring short-term rentals over long-term tenants, as it allows them to earn more money in a shorter period..

“I used to rent out my 2-room apartment for long stays, getting about INR 15,000 a month. After my first tenant left, I rented it for a week through a contact and earned almost the same amount. Now I have converted my apartment into a short-term rental space with all basic amenities, including housekeeping and Wifi and I am earning much more,” Vicky Shah, an apartment owner and a property consultant in Delhi, tells Media India Group.

Last year, a report published by a financial daily said that the challenge of finding and managing long-term tenants had led some property owners in Bengaluru to explore alternative sources of income. Many owners have realised the benefits of listing their properties on short-term rental platforms.

Indian celebrities are also increasingly entering the short-term rental market through Airbnb, leveraging their properties as commercial assets. Janhvi Kapoor’s property in Chennai, Shah Rukh Khan’s house in South Delhi, Yuvraj Singh’s villa in Goa, and Arjun Mathur’s Airbnb listing in Goa are positioned as high-value rentals.

The homestay model has also become a significant source of income for many women. Women hosts, who now make up 30 pc of the platform, earned INR 2.6 billion in 2024, reshaping the hospitality sector with greater financial independence, says another media report.

The appeal of homestays lies in the opportunity they offer to experience local culture, an integral part of the homestay experience.

Even the government is recognising the potential of the short-term rental market. In an effort to promote tourism and generate income to uplift local communities, the government launched a scheme called Tribal Home Stays-Swadesh Darshan.

Implemented by the Ministry of Tourism, this initiative aims to tap into the tourism potential of tribal areas and provide alternative livelihoods to tribal communities. As part of this, 1,000 homestays will be promoted through the Ministry of Tourism.