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%.
Marred by hectic lifestyle and urban fatigue, people now want to enjoy tourism in a more authentic, localized, and nature-centric ways. 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, especially in places such as Konkan, Himalayan peaks & valleys, Nilgiri, Sahyadri, etc.
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.
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.
“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 Taran Chabra, Director, SKYE Hospitality.
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.
