By Pranav Dangi – CEO & Founder, The Hosteller
There is a clear shift in how Indians choose where to stay. It is no longer only about beds, breakfast or price. It is about who you meet and how much of a place you get to live in, even for a couple of days. Hostels and homestays are simply the clearest places to watch this play out.
Across the hospitality industry, travellers are choosing experience-first journeys, where the stay itself has become a defining part of the trip rather than a supporting element. The trend is not limited to luxury travellers seeking exclusive properties. It cuts across segments: backpackers choosing hostels, families opting for homestays, remote workers settling into long-term rentals, and groups of friends preferring private villas over conventional hotels.
The data now backs the story
For a long time, this was something people in the travel industry talked about anecdotally. Now the numbers support it. According to a NITI Aayog report, India’s homestay market reached Rs 4,722 crore in 2024, growing at an 11% CAGR, with OTAs such as Airbnb and MakeMyTrip scaling aggressively into the space. That is a meaningful industry, not a side category.
For years, every accommodation category competed on the same handful of things: price, location, cleanliness and Wi-Fi. Those still matter, but for a growing number of travellers they no longer decide the booking. A standard hotel room looks much the same in Jaipur, Kochi or Coorg. A restored haveli, a mountain homestay run by a local family, or a hostel that hosts community dinners offers something more memorable. Such stays create conversations, connections and moments that last long after the trip ends.
The same report found that 69% of Indian travellers now prefer offbeat destinations. Homestays benefit because nothing else brings a traveller as close to a place’s everyday life.
Social media has accelerated the trend, with platforms like Instagram reshaping travel inspiration. Accommodation has become a discovery point in itself, often shaping where people choose to travel in the first place.
Hostels read the room early
Hostels deserve their due here, because they are not watching this shift from the sidelines. The stereotype of cramped dormitories serving only budget backpackers is steadily fading. Modern hostels are thoughtfully designed spaces that combine affordability with community.
In a sense, hostels and homestays are now chasing the same traveller from two directions. One builds a community out of strangers under one roof. The other plugs you into a family and a neighbourhood that already exist.
The future of hospitality
One reading of the NITI Aayog report is that traveller demand is not what holds India’s homestay sector back. The appetite is already there. The bigger challenge lies on the ground: slow registration processes, inconsistent regulations across states, and limited institutional support for hosts.
Bridging these gaps could unlock the next phase of growth. But as the ecosystem expands, the focus cannot be on adding inventory alone. The real challenge is scaling without losing the qualities that make homestays appealing in the first place. That means investing in quality standards, host training and responsible tourism, while giving hosts enough freedom to preserve the authenticity travellers seek. Platforms have a role too, by rewarding genuine guest experiences rather than simply optimising for occupancy or price.
Done right, the benefits will reach well beyond hospitality. As travellers seek unique stays in lesser-known destinations, tourism can spread beyond overcrowded hotspots into smaller towns and rural communities, creating new livelihoods for local businesses and residents.
Ultimately, this shift is about changing consumer expectations. Travellers today are not simply looking for a comfortable room. They want a place that helps them experience a destination differently. The future of hospitality will belong not just to those who build the best properties, but to those who create the strongest sense of place. In a world where destinations are increasingly accessible, memorable experiences have become the true differentiator.
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