India's alternative accommodation market expected to reach $4.7 billion in GBV by FY29: Report

New Delhi: The size of the alternative accomodation market in India is expected to reach $ 4.7 billion in terms of gross booking value in financial year 2029, up from $ 2.6 billion in financial year 2026, as per a new report released by Booking.com in partnership with travel advisory and research firm VIDEC Consultants on Wednesday.

As per the report, the total number of digitally distributed alternative accommodation listings (comprising the formal segment of the market) in financial year 2026 have crossed the 200,000 threshold. This number is up 26% from financial year 2025. Branded hotel rooms supply grew in single digits in the same time frame, as per the report titled 'How India TravelsTM 2026 - The Homes Edit’.

While the pace of supply growth is expected to moderate from the 26% recorded in financial year 2026, the segment’s gross booking value is still projected to grow at 21.2% CAGR through financial year 2029, 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 financial year 2024 and financial year 2025 compared with 2% for hotels.


According to the report, while major metros and classic vacation spots still account for nearly half of total inventory in financial year 2026 (46%), better connectivity and evolving travel habits are rapidly shifting growth toward tier-two cities, religious centers and emerging leisure corridors. This is reflected in listings across markets like Greater Noida, and Indore growing by over 100% in June this year compared to June 2025. Destinations such as Ayodhya saw growth in the range of 95%-108%.

Suman Billa, additional secretary and director general, ministry of tourism said the alternative accomodation segment presents a 'substantial solution' for India's accomodation needs. "The demand is exploding but the supply is not keeping up. We have about 200,000 branded rooms. There are several hotels in the pipeline, but you will require a lot more accomodation options in the country," he said. "There is an opportunity to include homestays and alternative accomodation options in bridging the gap," he added. He said in destinations such as Kerala and Goa, alternative accomodation are doing better than hotels on not just price realisation but also on the experience and value they offer.

The overall growth of alternative accommodation marks a 'major' inflection point in India’s travel economy, said Santosh Kumar, regional head, for South Asia at Booking.com. “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," he said.

"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," he added.

Virendra Jain, co-founder and 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," he said.

"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," he added.