20 Most Lucrative Cities for Homestay Business in India

Homestays offer travelers authentic, cultural, and community-driven experiences–different from black-box hotels. India’s rapid growth in both the tourist industry, both domestic and international, make this model an effective revenue source in the proper cities. Based on market research and traveler behaviour, as well as the support of government officials, as well as local ecosystems, these are the 10 cities that are the most profitable to run a homestay business within India.

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1. Rishikesh (Uttarakhand)

• The reason it’s so lucrative It leverages spirituality, yoga adventure tourism (rafting and hiking).
• Information: Rishikesh has the most expensive average per night room cost (Rs10,042) among leisure destinations.
• Success elements :
  • Visitors seek affordable, memorable accommodation close to ashrams and Ghats.
  • Airbnb, as well as homestay growth has soared after the Beatle-inspired tourism revival.
  • A variety of cottages, studios, and camps offer yoga classes offline or digital nomads.
• Tips Provide yoga classes as well as Ganga-view terraces. packages of spiritual and adventure stays.

11. Pune (Maharashtra)

• What makes it profitable Blending IT/edu-driven tourism for business and weekend getaways in hills nearby.
• Information: Pune has been one of the most rapidly growing tourism destinations, boasting 10-12percent annual tourist growth prior to COVID.
• Factors that make HTML0 successful Urban hosts turn hillside cottages into weekend stay-ins close to Lonavala/Khandala. Pune’s cultural festivals draw art enthusiasts.
• Tips Provide a heritage farmhouse experiences just 30 minutes away from the city, including poha-making classes along with nature trail.

2. Varanasi (Uttar Pradesh)

• The reason it’s so lucrative The city is among the oldest cities in the world and spiritual tourism is growing rapidly.
• Data is home to approximately 12,000 beds for tourists and has a strong international and religious traffic .
• Success Factors :
  • Pilgrims from all over the world stay for weeks in the vicinity of the Ganga Ghats.
  • The demand for traditional, cost-effective stays that offer culture immersion.
  • Homestays that are within walking distance of Ghats attract steady bookings all year round.
• Tips: Include Ganga aarti walking tours, Sanskrit chant sessions, and rooftop Ganges views.

12. Jaipur (Rajasthan)

• The reason it’s so lucrative This Pink City is a museum of crafts, architecture and royal life.
• The data: Jaipur welcomed 4 million visitors in 2023 with 1 million of them being international visitors.
• The success factors Boutique homestays in Havelis provide performances of the arts as well as cooking classes. extravagant Rajasthani breakfasts.
• Tips • Provide an “Royal Rajput Day”–turban-tying folk-dance, traditional photo sets.

3. Madhurai (Tamil Nadu)

• The reason it’s so profitable temple city that has the fastest growth in tourism in food-related tourism.
• Data Footfall of tourists in 2024 In 2024, the domestic figure is ~2.74 million, International ~98,770–up from 2023.
• Success elements :
  • Visitors can spend up to a day exploring bazaars, temples and other cultural places.
  • A growing demand for traditional home-cooked Tamil breakfast, and Madurai dishes.
  • Increase in experience tourism, such as food trails temple tours, traditional craft workshop workshops.
• Tips Offer culinary tourist packages as well as traditional Tamil stay in a home with decor.

13. Udaipur (Rajasthan)

• Why it’s a lucrative It’s dubbed”the “Venice of the East,” with lakeside views.
• Data It is in the top 10 Indian most-booked locations on Airbnb.
• The success factors Local hosts make use of the waterfront and traditional boat trips.
• Tips Provide boat excursions at sunrise, Rajasthani Thali dinners, and even folk-music nights.

4. Kochi (Kerala)

• The reason it’s a profitable It’s a hot spot for cultural tourism and the gateway for Kerala’s backwaters.
• Data Top of the list in the number of tourists who visit Kerala cities. It is also the home of the Kochi-Muziris Biennale.
• Success Factors :
  • International artists are in high demand, as are families, and non-seasonal travelers.
  • Homestays close to Fort Kochi, traditional boulevards and heritage houses perform very well.
  • The volume of bookings increases during the last quarter of the year events and festivals.
• Tips Display the brick-arched verandahs of Kathakali, experiences and traditional Kerala food.

14. Goa

• The reason it’s so lucrative the tropical paradise of India with a steady flow of tourists throughout the year.
• Data The number of visitors to the Data is nearly 8 million people visit each year with coastal homestays increasing 15% per year.
• The success factors Tourists prefer beaches to yoga shelters, Portuguese heritage homes.
• Tips Homestay packages that include fishing trips, spice tours and camping on the beach.

5. Delhi

• Why it’s a lucrative capital city that has an array of tourism and business.
• Data Tourism is responsible for 3.6 percent of India’s GDP (~$3.2B), with an expected growth rate of 10.8 percent per year.
• Success Factors :
  • Tourists seek out heritage hotels within Paharganj or Mehrauli Avoiding chain hotels.
  • Homestays with locally-sourced Delhi breakfasts (parathas and kele ki chutney) are very popular.
  • Access to historic walking trails and metro access is a benefit.
• Tips Create old Delhi strolling tours, street-food adventures and Delhi historical storytelling evenings.

15. Pondicherry

• Why it’s a lucrative Charm of the French colonial era beaches, boho cafes and retreats for spirituality.
• Data saw the increase of 18% in listings for homestays since 2022.
• Success elements Hosts can offer traditional homestays, complete with French breakfasts and Sanskrit Chants.
• Tips Mix the beach with cycling, Aurobindo Ashram visit, and homemade crepes.

6. Mumbai

• Why it’s a lucrative It’s India’s largest commercial hub with a high volume of travelers.
• Data The city is home to six million visitors annually and tourism accounts for 3.2 percent of the city’s GDP ($3.9B) .
• Success Factors :
  • Provides services for tourists from overseas and couples who are on weekend getaways as well as extended-stay travelers.
  • Boutique-style homestylings located situated in Bandra, Andheri, and Lower Parel are in demand.
  • The best rooms are those that have kitchenettes and balconies with sea views.
• Tips Provide curated desi-meetswest breakfasts (pav Bhaji or chocolate chai cookies) and walking tours with Bollywood themes.

16. Shillong (Meghalaya)

• The reason it’s so lucrative It’s the “Scotland of the East” with beautiful hills and tribesman roots.
• Data Eco-friendly hotels and wake-up canopy lodges are gaining popularity with NE tourist.
• Factors that make a difference Hill cottages made out of wood and bamboo set over valleys.
• Tips Add waterfall hikes, Khasi cooking lessons, and live root bridge tours.

7. Chennai

• The reason it’s so lucrative It’s a mix of touristic and business travelers.
• Data hosts 11M of the country’s and 630K foreign tourists each year The top 100 global cities destinations for travel.
• Success Factors :
  • People want beachfront verandahs and filter coffee wakes and temple tours.
  • Homestays close to Mahabalipuram and Marina draw families and wellness-minded tourists.
  • Demand is high during the Christmas music festivals and Pongal weekends.
• Tips Hosting temples in the early morning is a great way to celebrate pujas as well as the traditional South Indian cooking classes.

17. Alleppey (Kerala)

• Why it’s a lucrative It’s a gateway to stunning houseboat routes and backwaters.
• Data is one of Kerala’s top three homestay clusters, with an average time at 2.7 days.
• Factors that make HTML0 successful Homestays are a great option for morning canoe trips and freshly cooked Kerala food.
• Tips Include a day of rice farming experience as well as toddy tasting sessions.

8. Manali / Kullu Valley (Himachal Pradesh)

• The reason it’s a profitable The town of the mountains has all year round demand for honeymooners as well as adventure travelers.
• Information: Himachal has the second-highest number of homestay listings second only to Kerala.
• Success Factors :
  • Winter skiing is a popular activity while camping and trekking are available in summer.
  • Rooms with valley views are popular for guests and cooked at home Himachali meals and tie-in excursions.
  • Homestays are usually more expensive than hotels due to their beauty and value for money.
• Tips offer valley hiking, apple orchards stays as well as nearby tanea (Himachali Thali).

18. Sikkim (Gangtok/Thimpu area)

• Why it’s a lucrative The mountain tradition, Buddhist monasteries, trekking and eco-culture.
• data: Sikkim became India’s first state entirely organic, and boasts more than 200 homestays registered.
• The success factors Eco-homestays in Lepcha villages that serve organic meals from farms.
• Tips A package stay that includes the mountain bamboo, tea picking and visits to the monastery.

9. Ladakh

• The reason it’s so lucrative It’s an adventure-based destination that has the highest per-night stay.
• Data Stays at home in Ladakh have been able to reverse seasonal outmigration by creating 30% seasonal employment growth.
• Success Factors :
  • Stay-ins at home within Leh and Nubra offering bonfire stays insulated and local food.
  • The guests pay a premium for solar-powered water, packaged treks and altitude-related care.
  • Village tourism based on homestays in floors of Ladakh villages is endorsed by the state tourism boards.
• Strategies: Bundle homestays with snow-capped lakes as well as monastery safaris. more traditional Pulu blankets.

19. Hampi (Karnataka)

• Why it’s a lucrative: UNESCO world heritage site with rock formations temple ruins, and a bohemian atmosphere.
• Data Homestay bookings in Hampi increased by 25% between now and 2023 in Airbnb/Booking.com.
• Factors that make HTML0 successful Independent spa huts and bricks located near to ruins art fairs and the river’s edge.
• Tips Provide cooking demonstrations using coconut oil and heritage-themed picnics and even classical music nights.

10. Araku Valley / Andhra Pradesh

• Why it’s lucrative: Emerging eco-heritage destination under government focus.
• data: Andhra has identified more than 500 homes for rural residents that are projected to create 18,000 direct employment.
• Success Factors :
  • Tribal homestays that offer the traditional tribal craft along with organic, natural and delicious coffee.
  • Homestays in the vicinity of waterfalls, coffee plantations, along with Koleri tribal life are sold out on weekends.
  • The government supports tribal livelihoods and government-backed training ensures the highest quality and reliability.
  • Tips include dance night with tribal music and coffee bean foraging and bamboo rafting in the backwater.

20. Shimla / Kufri (Himachal Pradesh)

• The reason it’s so lucrative Colonial charm cool summers, cooler temperatures, and hills to explore.
• Information: Himachal government promotes homestays – more than 1500 licensed listings in the Shimla region.
• The success factors Hill cottages featuring wood fire, Himalayan breakfast, and balconies with views of snow.
• Tips include apple-picking in autumn as well as yak rides in winter, and walks through the forest.

Why These Markets Lead — Key Drivers

1. Demand Diverse – Leisure, business, spiritual, or eco-tourism – each city has a specific niche
2. Limits Hotel Reach – A lot of hotels are not served by big chains, which offer the option of homestays with a first-mover advantage
3. high yield potential High ADR coupled along with the local structure of pricing make for appealing ROI
4. Government Assistance Government Support Andhra Pradesh homestays (1,842 units), Madhya Pradesh (241 units ) and Rs 25 crore investment)
5. The Indian market for homestay is estimated at US$540 million by 2024. It is expected to grow at a 11 percent CAGR.
6. Homestays are currently only 5 percent of India’s total accommodation, but they contribute 13% of the emerging destinations..
7. Room rates average between Rs3000 and Rs4500 for standard listings. Premium homestays can cost Rs6,000 to Rs10,000+ per night in peak seasons.

These statistics reinforce the benefits of operating in cities that are ranked while remaining lean and nimble.

Tips for Hosts in These Cities

• Placement for Experiential Experience Highlight the things that make your region special such as yoga and temple rituals, heritage walks.
• Offer Packages – Combine stay + activity (yoga + Ganga aarti, food trails, temple pujas, treks).
• Price-Smart Rooms on weekdays are priced between 20-30% cheaper while weekends can be more expensive.
• Keep Standards High – Cleanliness, amenities, host behavior drive strong reviews.
• Utilize technology wisely, Bookings WhatsApp, Google Maps and local SEO are important in cities that are competitive.
• Collaboration Locally Create loops using guides, chefs and vehicle owners, and artisans.
• Tap into the Government Assistance – Keep informed about government policies for homestay in the state including subsidies, training, and other policies.

Final Takeaway 🎯

The market for homestays in India is far from uniform. The most lucrative opportunities are in specific destinations–tech hubs and hill retreats, spiritual centres, and coastal getaways, where special experiences are more valuable than commercialization. Start small, get to know the psychology of guests, and focus on authenticity. If done correctly, homestays in these cities aren’t just profitable, they’re also shaping the future of Indian hospitality.