Homestays offer travelers authentic, cultural, and community-driven experiences—different from black-box hotels. India’s booming domestic and international tourism sectors mean this model is now a strong revenue generator in the right cities. Based on market data, traveler behavior, government support, and local ecosystems, here are the 10 most lucrative cities for homestay business in India.
| # | City | State | Key Appeal | Annual Tourist Flow (approx.) | Unique Selling Point | Tip for Hosts |
|---|---|---|---|---|---|---|
| 1 | Rishikesh | Uttarakhand | Spiritual, adventure | 3+ million | Yoga & Ganga activities | Offer riverside or yoga-view rooms |
| 2 | Munnar | Kerala | Tea gardens, misty hills | 1.2 million | Eco-farm experiences | Add guided tea plucking & local food tours |
| 3 | Darjeeling | West Bengal | Colonial charm, tea, toy train | 4–5 million | British-era bungalows | Provide Gorkha cultural food & hikes |
| 4 | Coorg | Karnataka | Coffee plantations, hills | 1.5 million | Coffee estate stays | Add plantation walks & Kodava cuisine |
| 5 | Manali | Himachal Pradesh | Snow, adventure, road trips | 8+ million | Mountain views, backpacker vibe | Offer apple orchard tours & bonfire nights |
| 6 | Varanasi | UP | Spiritual tourism | 6 million | Ghat views, cultural immersion | Include boat rides & music evenings |
| 7 | Auroville | Tamil Nadu | Spiritual-eco fusion | 300K+ | Sustainable community living | Offer yoga, organic meals, and workshops |
| 8 | Jodhpur | Rajasthan | Heritage forts, blue city charm | 2.3 million | Haveli-style homestays | Provide traditional meals & puppet shows |
| 9 | Mussoorie | Uttarakhand | Colonial hill station | 1.4 million | British-era homes | Add heritage walk & nature trails |
| 10 | Bhuj | Gujarat | Handicrafts, desert, Kutchi life | 600K–700K | Rural/artisan cultural stays | Offer crafts workshops & village safaris |
| 11 | Pune | Maharashtra | Edu-tech + weekend getaways | Rapid urban + hill travel | Weekend farmhouse getaways | Add local food + short eco-hikes |
| 12 | Jaipur | Rajasthan | Royal heritage, pink city | 4+ million | Haveli heritage stays | Offer Rajput culture day |
| 13 | Udaipur | Rajasthan | Lakes, palaces | 3–4 million | Waterfront traditional homes | Offer sunrise boat rides & folk dinners |
| 14 | Goa | Goa | Beaches, nightlife, heritage | 8+ million | Coastal Portuguese bungalows | Package with spice tour & kayaking |
| 15 | Pondicherry | Tamil Nadu | French charm, beaches | 1 million+ | French architecture & cafes | Add cycle tours & crepe cooking classes |
| 16 | Shillong | Meghalaya | Hills, culture, music | 500K+ | Bamboo cottages, scenic stays | Include tribal cooking & root bridge visits |
| 17 | Alleppey | Kerala | Backwaters, houseboats | 2.5–3 million | Canoe rides & farm meals | Offer toddy tasting & coconut farm visits |
| 18 | Gangtok | Sikkim | Eco-tourism, mountain views | 1.2 million | Organic village homestays | Include tea trails & monastery meditation |
| 19 | Hampi | Karnataka | Ancient ruins, hippie vibe | 400–500K | River-view huts near temples | Provide sunset picnics & guided temple walks |
| 20 | Shimla/Kufri | Himachal Pradesh | Snow, apple orchards | 4–5 million | Cozy cottages with valley views | Add orchard picking & bonfire experiences |
Table of Contents
1. Rishikesh (Uttarakhand)
- Why it’s lucrative: Leverages yoga, spirituality, adventure tourism (rafting, trekking).
- Data: Rishikesh has the country’s highest average nightly room rate (₹10,042) among leisure destinations.
- Success factors:
- Guests seek budget, experiential stays near ashrams and ghats.
- Airbnb and homestay penetration soared post-2018 Beatles-inspired tourism revival.
- Many studios, cottages, and camps cater to offline yogis and digital nomads.
- Tips: Offer yoga sessions, Ganga-view terraces, and packaged adventure + spiritual stays.
11. Pune (Maharashtra)
- Why it’s lucrative: A blend of IT/edu-driven business tourism and weekend getaways in the nearby hills.
- Data: Pune has been one of the fastest-growing travel destinations, with 10–12% annual tourism growth pre-COVID.
- Success factors: Urban hosts convert hill cottages into weekend homestays near Lonavala/Khandala. Pune’s cultural events attract art tourists.
- Tips: Offer heritage farmhouse experience just 30 minutes from the city, with poha-making sessions and nature trails.
2. Varanasi (Uttar Pradesh)
- Why it’s lucrative: One of the world’s oldest cities; spiritual tourism is exploding.
- Data: Harbors around 12,000 tourist beds, with strong religious and international traffic .
- Success factors:
- Foreign and domestic pilgrims stay for weeks near the Ganga ghats.
- Demand for cost-effective traditional stays with cultural immersion.
- Homestays within walking distance of ghats draw steady bookings year-round.
- Tips: Include Ganga aarti walking tours, Sanskrit chant sessions, and rooftop Ganges views.
12. Jaipur (Rajasthan)
- Why it’s lucrative: The Pink City is a museum of architecture, crafts, and royal living.
- Data: Jaipur welcomed 4 million tourists in 2023, with 1 million seeing international visitors.
- Success factors: Boutique homestays in Havelis offer cultural performances, cooking classes, and luxury Rajasthani breakfasts.
- Tips: Provide a “Royal Rajput Day”—turban-tying, folk-dance, heritage photo setups.
3. Madhurai (Tamil Nadu)
- Why it’s lucrative: Temple city with soaring tourist growth and food tourism.
- Data: Tourist footfall in 2024: Domestic ~2.74 crore, International ~98,770—up from 2023.
- Success factors:
- Visitors stay 1–3 days exploring temples, bazaars, and cultural sites.
- Demand for home-cooked traditional Tamil breakfast and Madurai cuisine.
- Growth in experience tourism—food trails, temple tours, local craft workshops.
- Tips: Provide culinary tourism packages and traditional Tamil home decor stays.
13. Udaipur (Rajasthan)
- Why it’s lucrative: Called the “Venice of the East,” with lakeside palace views.
- Data: Ranked among India’s top 10 most-booked destinations on Airbnb.
- Success factors: Local hosts leverage waterfront locations and traditional boat rides.
- Tips: Offer sunrise boat rides, Rajasthani Thali dinners, and folk-music evenings.
4. Kochi (Kerala)
- Why it’s lucrative: Cultural hotspot and gateway to Kerala’s backwaters.
- Data: Ranked #1 in tourist arrivals among Kerala cities; host to Kochi-Muziris Biennale.
- Success factors:
- Demand from international artists, families, and off-season travelers.
- Homestays near Fort Kochi, traditional boulevards, and heritage homes perform well.
- Booking volumes spike during late-year festivals and art events.
- Tips: Showcase brick-arched verandahs, Kathakali experiences, and homemade Kerala meals.
14. Goa
- Why it’s lucrative: India’s tropical playground with year‑round tourist influx.
- Data: Nearly 8 million annual visitors, with coastal homestays growing 15% yearly.
- Success factors: Travelers prefer beachfront yoga huts, Portuguese heritage homes.
- Tips: Package homestays with fishing trips, spice tour, and beach camping.
5. Delhi
- Why it’s lucrative: Capital city with a mix of business and tourism stays.
- Data: Tourism contributes 3.6% to Delhi’s GDP (~$3.2B), with growth projected at 10.8% annually.
- Success factors:
- Visitors seek heritage stays in Paharganj or Mehrauli, avoiding chain hotels.
- Homestays offering local Delhi breakfasts (parathas, kele ki chutney) are popular.
- Proximity to heritage walks and metro connectivity is a plus.
- Tips: Curate Old Delhi walking tours, street food experiences, and Delhi history storytelling nights.
15. Pondicherry
- Why it’s lucrative: French-colonial charm, beachfront, boho cafés, and spiritual retreats.
- Data: Saw 18% increase in homestay listings since 2022.
- Success factors: Hosts offer heritage-style homestays with French breakfast and Sanskrit chants.
- Tips: Combine beachfront cycling, Aurobindo Ashram visit, and homemade crepes.
6. Mumbai
- Why it’s lucrative: India’s commercial hub with high traveler volumes.
- Data: Home to 6 million annual tourists; tourism makes up 3.2% of city GDP ($3.9B) .
- Success factors:
- Serves overseas tourists, couples on weekend escapes, and extended-stay travelers.
- Boutique homestays in Bandra, Andheri, and Lower Parel are in demand.
- Premium for spacious rooms with kitchenettes and sea-view balconies.
- Tips: Offer curated desi-meets-west breakfasts (pav bhaji, chai cookies) and Bollywood-themed walking tours.
16. Shillong (Meghalaya)
- Why it’s lucrative: The “Scotland of the East” with lush hills and tribal roots.
- Data: Eco-stays and wake-up canopy cottages are trending among NE tourists.
- Success factors: Hill cottages built of bamboo and wood, perched over valleys.
- Tips: Add waterfall treks, Khasi cooking lessons, and living root bridge visits.
7. Chennai
- Why it’s lucrative: A mix of business travelers and cultural tourists.
- Data: Hosts 11M domestic and 630K foreign tourists annually; top 100 global city travel destinations.
- Success factors:
- Visitors want shoreline verandahs, filter coffee wakes, and temple visits.
- Homestays near Mahabalipuram and Marina attract families and wellness tourists.
- Demand peaks during December music festivals and Pongal weekends.
- Tips: Host early-morning temple pujas and traditional South Indian cooking classes.
17. Alleppey (Kerala)
- Why it’s lucrative: Gateway to mesmerizing backwaters and houseboat routes.
- Data: Part of Kerala’s top 3 homestay clusters, average stay of 2.7 days.
- Success factors: Homestays offer morning canoe rides and fresh Kerala meals.
- Tips: Include one-day rice-farming experience and toddy tasting sessions.
8. Manali / Kullu Valley (Himachal Pradesh)
- Why it’s lucrative: Mountain town with year-round demand for honeymooners and adventure tourists.
- Data: Himachal has the second-highest homestay listings after Kerala.
- Success factors:
- Skiing stays in winter; trekking and camping in summer.
- Guests seek valley-view rooms, home-cooked Himachali meals, and tied-in trips.
- Homestays often outperform hotels due to scenic charm and cost-value.
- Tips: Offer valley hikes, apple orchard stays, and local tanea (Himachali thali).
18. Sikkim (Gangtok/Thimpu region)
- Why it’s lucrative: Mountain culture, Buddhist monasteries, trekking, and eco‑culture.
- Data: Sikkim became India’s first all-organic state, featuring over 200 registered homestays.
- Success factors: Eco‑homestays in Lepcha villages offering organic farm meals.
- Tips: Package stay with mountain bamboo dance, tea-plucking, and monastery visits.
9. Ladakh
- Why it’s lucrative: Adventure-intensive destination with high per-night stays.
- Data: Homestays in Ladakh have reversed seasonal outmigration by generating 30% seasonal job growth.
- Success factors:
- Homestays in Leh and Nubra providing insulated bonfire stays, local meals.
- Guests pay premium for solar-heated water, packaged treks, and altitude care.
- Homestay-led village tourism in floored Ladakh villages is recognized by state tourism boards.
- Tips: Bundle homestays with frozen-lake stargazing, monastery safaris, and traditional Pulu blankets.
19. Hampi (Karnataka)
- Why it’s lucrative: UNESCO world heritage site with rock formations, temple ruins, and bohemian vibe.
- Data: Homestay bookings in Hampi grew 25% in 2023 across Airbnb/Booking.com.
- Success factors: Independent brick/spa huts, close to ruins, art markets, and riverside.
- Tips: Offer cooking with coconut oil, heritage picnics, and classical music nights.
10. Araku Valley / Andhra Pradesh
- Why it’s lucrative: Emerging eco-heritage destination under government focus.
- Data: Andhra has identified over 500 rural homestays, projected to create 18,000 direct jobs.
- Success factors:
- Tribal homestays providing tribal crafts and organic coffee experiences.
- Homestays near coffee plantations, waterfalls, and Koleri tribal life sell out weekends.
- Supports tribal livelihood and government-backed training brings quality consistency.
- Tips: Include tribal dance nights, coffee bean foraging, and backwater bamboo rafting.
20. Shimla / Kufri (Himachal Pradesh)
- Why it’s lucrative: Colonial charm, cooler summers, and hill adventures.
- Data: Himachal government promotes homestays—more than 1,500 licensed listings near Shimla area.
- Success factors: Hill cottages with woodfire, Himalayan breakfast, and snow‑view balconies.
- Tips: Add apple-picking in fall, yak rides in winter, and forest walks.
Why These Markets Lead — Key Drivers
- Demand Diversity – Business, leisure, spiritual, or eco-tourism—each city serves a niche
- Limited Hotel Reach – Many are underserved by large chains, offering homestays a first-mover advantage
- High Yield Potential – High ADR combined with local pricing structures create attractive ROI
- Government Support – Andhra Pradesh homestays (1,842 units), Madhya Pradesh (241 units & Rs 25 Cr investment)
- India’s homestay market is valued at US$540M in 2024, growing at an 11% CAGR.
- Homestays currently make up just 5% of India’s overall accommodation but contribute 13% in emerging destinations.
- Average room prices: ₹3,000–₹4,500 for standard listings; premium homestays get ₹6,000–₹10,000+ per night in peak season.
These data points reinforce the value of operating in top cities while staying lean and experiential.
Tips for Hosts in These Cities
- Position for Experience – Highlight what makes your area unique: yoga, heritage walks, temple rituals.
- Offer Packages – Combine stay + activity (yoga + Ganga aarti, food trails, temple pujas, treks).
- Price Smart – Weekday rooms priced 20–30% lower; weekends can be premium.
- Keep Standards High – Cleanliness, amenities, host behavior drive strong reviews.
- Use Tech Wisely – Bookings, WhatsApp, Google Maps & local SEO matter in competitive cities.
- Collaborate Locally – Create loops with guides, chefs, vehicle owners, artisans.
- Tap into Government Support – Stay updated on state homestay policies, subsidies, training.
Final Takeaway 🎯
The homestay market in India is far from homogeneous. The most profitable opportunities lie in niche destinations—tech hubs, hill retreats, spiritual centers, and coastal escapes—where unique experiences are valued over commoditization. Start small, understand guest psychology, and emphasize authenticity. Done right, homestays in these 20 cities aren’t just lucrative—they’re shaping the future of Indian hospitality.