How and why is the government promoting homestays in India?

Mint explains what these policies are and why the government is keen on homestays.

What did Shekhawat tell the Lok Sabha?

The minister filed two written replies in the Lok Sabha on 15 December. In the first, he laid out policies to promote homestays that the government has recommended for states and Union territories. These come from Niti Aayog report, released earlier this year, called ‘Rethinking Homestays’.

In the second reply, he said the ministry had received 17 proposals from states and Union territories to develop homestays in tribal areas under a sub-scheme of Swadesh Darshan, a programme to promote domestic tourism under the Pradhan Mantri Janjatiya Unnat Gram Abhiyan or PM-JUGA.

So, what policies do the government and Niti Aayog recommend?

Currently, some states have their own policies to regulate and promote homestays or bed-and-breakfast accommodations. The NITI Aayog recommended that all states adopt some of the best practices among them, such as Goa’s policy of requiring only three documents to register a homestay and Chhattisgarh’s policy to classify homestays under functional categories, including urban, forest, and tribal.

Besides, the ministry has suggested that states tie up with online travel aggregators and travel influencers to promote homestays and create ‘homestay’ clusters in their tourist hotspots.

What has the government done for proposed tribal homestays?

In his reply, Shekhawat stated that he had approved five of the 17 tribal homestay proposals he had received, which are from Andhra Pradesh, Madhya Pradesh, Mizoram, Uttarakhand, and Ladakh. These proposals have been granted ₹17.52 crore, but funds have not been released yet. This money will be released under the PM-JUGA, which offers up to ₹5 lakh for the needs of the village, creating homestays, another ₹5 lakh to build two new rooms in a household for homestays, and up to ₹3 lakh to renovate existing rooms in a home.

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How big is the market for homestays in India?

Estimates vary, as many homestays operate unofficially and without much regulation. The NITI Aayog, in its report, said the size of the country’s homestay market was ₹4,722 crore in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 11% until 2031.

The report also noted that the country’s largest travel aggregator, MakeMyTrip, now generates 10% of its hotel room sales from homestays, according to a company representative. Meanwhile, Airbnb India, the Indian arm of the global homestay and short-term rental platform, reported a revenue of ₹41.3 crore in 2023-24. However, this remains minuscule compared with India’s hotel industry, which is estimated to be worth over $24 billion.

Are there any government-registered homestays already?

Under the government’s National Integrated Database of Hospitality Industry (NIDHI), there are now 4,916 registered homestays across the country. In another Lok Sabha reply in August, the tourism minister said there were 2,163 NIDHI-registered rural homestays, with Uttar Pradesh having the highest at 955, followed by West Bengal with 570.