India’s branded alternate vacation market reached USD 483.7 million in 2024

India’s branded alternate vacation market has reached USD 483.7 million in 2024, as per latest research by Axon Developers, done in partnership with SKYE, a hospitality & tourism consulting advisory. The market has spiked by around 46.8% compared to 2023, when it was sized at USD 329.6 million.

In a time when the demand for immersive tourism, authentic travel experience and curated services is rising, the alternate vacation space and short rental market is rising at an unprecedented speed.

In 2024, India added over 550 branded rental villas, taking the cumulative volume to 1711. In the next 5 years, it is estimated that the total volume of rental villas is set to cross 5,000. In terms of market value, the alternate vacation industry is slated to reach USD 1,560.7 million, growing at a CAGR of 26.4%.

Commenting on the exponential growth in the alternate vacation market space, Mr. Ankit Kansal (MD, Axon Developers) said, “the nature of tourism is now transforming. Marred by hectic lifestyle and urban fatigue, people now want to enjoy tourism in a more authentic, localized, and nature-centric ways. Many tourists don’t prefer signature stays in mainstream hotels. Rather they want to indulge in curated style tourism pinned on enjoying local food delights, explore cultural heritages and interact with indigenous communities. This necessitates the need for niche private villas and farmhouses with bespoke services. In a mainstay hotel such a degree of localization and versatility is difficult to realize.

Another factor that has resulted in the sweeping growth of private holiday villas has been spike in demand for offbeat trails. In the midst of many popular tourist destinations becoming overcrowded, demand is unfolding for offbeat trails, especially in places such as Konkan, Himalayan peaks & valleys, Nilgiri, Sahyadri, etc. Spending time in tranquil and less crowded natural destinations can be a great way to relax and refresh.

However, many such places lack conventional hotels and resorts. Consequently, the alternate space comprising villas, farm houses, bungalows, beach houses, etc. are stepping up to fill the gap.

“The lucrative nature of the vacation rental space is luring bigger players such as ITC and IHCL, who are now coming up with managed villas and boutique hotels. Ama Stays, which is part of IHCL has crossed over 250 private properties in Jan 2025. Similarly, Storii, which is part of ITC has added new properties in UP, HP and Goa. This indeed is a watershed moment for Indian alternate hospitality segment” Added Ms Taran Chabra, Director, SKYE Hospitality.

“The positive impact of a burgeoning alternate hospitality will cascade to other sectors such as real estate, tourism, aviation, food & beverage, etc. One of the sectors that will see immediate rise in demand will be the second & vacation home industry. It is noteworthy that weekday occupancy of rental villas is modest at around 30-40%. However, during weekends, an 80-100% occupancy is achievable, which can easily take the average occupancy to ~ 50%. This can be a source of commendable leasing income for second home buyers.” Added Mr. Kansal.