India Vacation Rental Market

Growing Indian Tourism Industry

The hotel rental market in India has experienced expansion in recent years, owing to the changing nature of the travel and hospitality industries. One of the most significant market developments has been the growing desire for personal and expert knowledge. Travelers are no longer satisfied with regular hotels; they want the unique experiences and traditions that resorts can provide. The growth of digital platforms and online travel agencies (OTAs) has had a significant impact on the evolution of holiday destinations in India.

Airbnb, Booking.com, and MakeMyTrip have gained popularity by providing a simple interface for homeowners to sell their houses and travellers to discover and book lodging. This digitalization not only expands the vacation space, but also increases transparency and trust through user reviews and ratings.

Another difference to note is the difference between vacation destinations. While homes and condos have always been a popular choice, there has also been an increase in unique and non-traditional properties on the market. Treehouses, houseboats, historic homes and boutique villas are becoming increasingly popular and appeal to guests looking for a unique experience. These trends indicate a growing need for programs tailored to specific preferences, such as eco-friendly accommodations or environmental practices. The COVID-19 pandemic has had a major impact on international travel, and the Indian hotel rental industry is no exception.

The shift to remote working and the rise of ‘office spaces’ has led to an increase in demand for long-term rentals. Travelers are now looking for comfortable and functional hotels for work and leisure. These trends have allowed owners and managers to adapt their products to meet the changing needs of new travelers. Partnerships and collaborations between resorts and community gatherings have also created business. These collaborations aim to promote cultural tourism, ensure compliance with local regulations and improve overall tourism. By working closely with business associations, vacation rentals can increase the accountability and growth of the Indian tourism industry.

By Region, the study provides market insights into North, South, West, and East. The South Vacation Rentals market accounted for ~47.02% in 2022. This is majorly attributed to the increasing popularity of India as a tourist destination among various global countries as the infrastructure in the country and connectivity with multiple global countries through air and seaways have improved over the years making it an easy and comfortable journey for the international tourists. The geographical position of the country along with its diverse cultural heritage is making India an attractive spot for entertainment and leisure.

Further, the increasing government initiatives, schemes, and policies to promote the tourism industry in the country are expected to drive the overall travel & tourism industry in the upcoming years which is projected to positively influence the demand for vacation rentals in the country and create a new set of opportunities for the players in the market.

FIGURE 3: INDIA VACATION RENTALS MARKET SIZE BY REGION 2022 VS 2032 (USD Million)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

South India accounts for the largest market share in the vacation rentals market owing to the presence of various religious tourist spots in Tamil Nadu amounting to approximately 33,000 temples in 2022 is a key attraction to both domestic and international cultural tourists. Further, consumer surveys of travelers have highlighted that the majority of individuals prefer hill stations and coastal getaways for short-term vacations. India has a total coastline of 7,516.6 Km constituting the majority of southern states namely Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, and Puducherry making most of these coastal cities a preferred tourist destination.

The region houses around 25 hill stations comprising popular destinations like Ooty, Kodaikanal, Munnar, Coorg, Yercaud, Wayanad, and others making the region a popular choice for vacation which is expected to drive the demand for vacation rentals positively from 2023 to 2032.

With a strong presence across different verticals and geographies, the Vacation Rentals market is highly competitive and dominated by established, pure-play vendors. Over 10 vendors cater to this market, and they continually innovate their solutions to meet the evolving needs of businesses by adopting new technologies. These vendors have a robust geographic footprint and partner ecosystem to cater to diverse customer segments. The Vacation Rentals market is highly competitive, with many vendors offering similar products and services.  

The major players in the market include Airbnb Inc., MakeMyTrip Limited, Booking Holdings, Oravel Stays Limited, Yatra Online, Inc., Expedia Group, Inc., Tripadvisor LLC, StayVista, Homestay.Com, and SaffronStays Corporation constantly takes on new challenges to ensure the stability of its management foundation by extending its reach into business fields. In 2022, the Vacation Rentals market remains highly fragmented, characterized by a diverse array of players, from large multinational corporations to numerous smaller, local firms. This fragmentation is evident from the market share distribution, where the leading companies command only a small fraction of the overall market.

It concentrates on broadening its product offerings to reach new audiences in the global market.

The India Vacation Rentals market is consolidated, increasing competition, acquisitions, mergers, and other strategic market developments and decisions to improve operational effectiveness.