Homestay policy may be refurbished to offer incentives

The government is considering revamping the homestay policy to ensure adequate incentives for hosts and aggregators, bring in transparent regulations and introduce measures to protect the interests of both tourists and homeowners.

The move will help formalise the informal sector and make it world-class as the government aims to develop India into the most preferred tourist destination with focus on niche tourism, eco-tourism and wellness tourism, said officials.

The revised policy could see fiscal incentives for homeowners and aggregators, a robust verification and monitoring mechanism and comprehensive standards with a bigger range of classification of homestays to enhance the overall experience, they said.


Besides, the Centre will maintain data for all recognised and certified homestays for the convenience of travellers. Homestays or bed-and-breakfasts in India are currently classified in the 'silver' and 'gold' category based on the services and infrastructure available.

A senior government official told ET that NITI Aayog has undertaken a study on 'Unlocking Economic Potential of Homestays in India' which will recommend changes needed in the existing policy framework to help develop an ecosystem for homestays with focus on infrastructure creation and capacity building including those of skilled workers.

"The government is of the view that homestays have the potential to give a significant push to the local and regional economy and hence a greater policy and planning coherence is needed in the sector to scale it up to international standards," the official said on condition of anonymity, adding that the revamped policy could be put in place by the end of this year.

The highest number of homestays in the country are in Kerala, followed by Karnataka, Himachal Pradesh, Maharashtra and Tamil Nadu, and the sector accounts for just 5% of India's tourist accommodation compared to 67% by hotels and restaurants.

The Centre had introduced a National Strategy For Promotion Of Rural Homestay in 2022 to encourage the development of sustainable and responsible rural tourism by providing financial and promotional support, enhancing infrastructure, creating awareness and capacity building, and improving the quality of services and facilities for tourists in rural areas.

Prior to this, in 2018, the government had put in place guidelines for approval and registration of Incredible India Bed & Breakfast and Homestay Establishments to set basic minimum standards for the sector.

The government is betting on a spurt in tourism development through initiatives including Swadesh Darshan 2.0, which focuses on sustainable, destination-centric tourism, and the PRASHAD (Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive) scheme, aimed at enhancing infrastructure around pilgrimage and spiritual sites.