(GIST OF KURUKSHETRA) Homestays: India’s Tourism Future

(NOVEMBER-2025)

Homestays: India’s Tourism Future

Context:

Domestic travellers are exploring unknown corners of the country, seeking authenticity over luxury, and connection over convenience. Amidst this transformation, homestays — once viewed as informal, small-scale alternatives — have emerged as the quiet revolutionaries of India’s tourism economy. Yet, as NITI Aayog’s 2025 report “Rethinking Homestays: Navigating Policy Pathways” reveals, this revolution is being held back by missed opportunities.

A Tourism Revival Riding on Local Roots

In 2024, India’s travel and tourism sector contributed lakh crore to the national economy a 21 per cent jump over pre-pandemic levels. Domestic tourism alone accounted for lakh crore in spending, signalling an inward shift in travel patterns. By 2034, the sector is projected to contribute 7.6 per cent of the country’s GDP, creating over 6 crore jobs.
But as demand rises, supply lags. India faces a shortage of over two lakh hotel rooms, particularly outside metros and tourist hubs. The gap is largely being filled not by big hospitality chains, but by ordinary households turning their homes into guest spaces.
Homestays are now one of the fastest-growing segments in tourism, expected to expand at an annual rate of 11per cent between 2024 and 2031, according to Cognitive Market Research.
Platforms like Airbnb, MakeMyTrip, and Booking.com have catalysed this trend— MakeMyTrip’s homestay segment already accounts for 10 per cent of its hotel sales, and Airbnb alone supported 85,000 Indian jobs in 2022 while contributing crore to GDP. These numbers suggest that the ‘small’ homestay economy is quietly becoming a national growth engine.

The Cultural Capital of Hospitality

At its heart, the homestay model revives an old Indian idea: Atithi Devo Bhava— the guest as god.
The 2006 Incredible India Bed & Breakfast Scheme was designed to bring this ethos to life, encouraging locals to host travellers in authentic, community-based settings. The model works beautifully with India’s cultural diversity— from tea planters’ cottages in Assam to terracotta homes in Kutch, from restored havelis in Rajasthan to spice plantations in Kerala.
Unlike hotels that isolate guests, homestays invite them into local life. They connect travellers to regional cuisines, crafts, and customs, while ensuring that tourism revenue flows directly to families rather than external corporations. In doing so, they also serve broader national goals— promoting inclusive livelihoods, women’s entrepreneurship, and sustainable rural development.
Tourism Satellite Account of India estimates that the homestay sector has an employment multiplier of 4.38 and an output multiplier of 2.04— the highest among all sub-sectors of tourism. Every rupee earned in a homestay stimulates nearby trade, agriculture, and services, especially in rural regions where other industries are limited.
In Uttarakhand’s hill villages, for instance, homestays have reduced migration by providing locals with steady income. In Kerala, they’ve empowered women; many are now entrepreneurs managing family- run stays. And in Goa, the state’s Hinterland Homestay Incentive Scheme is pushing tourists beyond beaches to explore its cultural interiors.

From Policy Silos to Policy Synergy

NITI Aayog’s report doesn’t just diagnose the problem; it sketches a blueprint for reform. Its proposed Model Homestay Policy Framework urges states to harmonise regulations under a few key principles:

Ease of Doing Business: Replace multi-step approvals with single-window, online registration requiring only essential documents— ownership proof, ID and GST (if applicable). Provisional registration should allow operation pending verification and renewals should be automatic.
Digital Integration: A unified portal for registration, self-declaration of compliance and marketing could bring transparency and efficiency. Randomised inspections, instead of rigid paperwork can ensure accountability.
Destination-Centric Incentives: Rather than subsidising individual properties, incentives should focus on developing clusters— circuits that link homestays across themes like wellness, heritage, or adventure. This approach can spread tourism benefits more evenly.
Utility Reforms: Homestays should be classified as residential units for water, power, and property tax— a small policy change with big economic relief.
Capacity Building: Partnerships with private sector experts and OTAs for regular Homestay Business Summits could create peer learning networks and introduce new skills in digital marketing, sustainability, and experience design.
Awareness and Outreach: A national Information, Education, and Communication (IEC) campaign could familiarise aspiring hosts and travellers alike with the idea of homestays— transforming perception from informal lodging to integral tourism infrastructure.

Way ahead:

Economic Empowerment: With low entry barriers, homestays can bring lakhs of families, especially women, into the formal economy.
Balanced Regional Growth: By dispersing tourism beyond overburdened hubs, they can promote lesser-known destinations and reduce ecological stress.
Cultural Revival: Every homestay becomes a living museum of local art, craft, and cuisine.
Environmental Stewardship: Smaller footprints and community accountability make homestays inherently more sustainable than large-scale resorts.

Conclusion:

Yet for this quiet revolution to realise its potential, policy must move from control to enablement— from paperwork to partnership. As India races towards its tourism goals for 2030 and beyond, the most meaningful progress may come not from building new hotels, but from empowering millions of homes to open their doors.