Airbnb gold rush: How short-term rental enterprise is India’s subsequent large asset play – Model Wagon Information

For a lot of, property possession is not nearly having a roof over their heads—it’s about making that roof pay for itself. The rise of Airbnb and related short-term rental platforms has turned houses into cash-generating property, with some homeowners even buying properties particularly for internet hosting vacationers. This shift is shaking up actual property, redefining funding methods, and elevating large questions: Is working an Airbnb as profitable because it appears? How sustainable is that this mannequin? And what does it imply for the broader housing market?

India’s short-term rental market was valued at roughly $135 billion in 2024 and is predicted to develop at a compound annual progress charge (CAGR) of 10.8% by 2034, as per Future Market Insights. This progress is basically pushed by the under-supply of accommodations, with India having solely 2.6 accommodations per 100,000 individuals, considerably decrease than the worldwide common.

Conventional renting vs. short-term stays

The elemental distinction between conventional renting and short-term stays lies in flexibility and incomes potential. Lengthy-term leases provide stability, with mounted month-to-month earnings and decrease administration overhead, whereas short-term leases generate considerably larger income however require energetic administration.

Ankit Lodha, founder, LA Empire, selected Airbnb over long-term leases for higher management over his properties. “Lengthy-term leases restrict entry, whereas Airbnb permits us to handle our calendar, keep maintenance, and optimise visitor experiences. Inside months, we realised Airbnb earnings have been as much as 5 occasions that of conventional long-term leases,” he stated.

Swaroop Murgod, founder and CEO at Salaam Namaste, and an Airbnb host, echoes this sentiment. “In Goa, throughout peak months like December and January, my earnings can go as much as Rs 2 lakh per flat, whereas a long-term lease would yield considerably much less,” he stated.

Equally, Anirudh Sharma, founder, JP Homestays, and an Airbnb host managing 15 properties in Noida, famous {that a} studio condominium incomes Rs 20,000- Rs 25,000 monthly in conventional renting may fetch Rs 50,000- Rs 60,000 on Airbnb, particularly throughout high-demand occasions.

(Media question despatched to Airbnb had not acquired a response on the time of publishing this text.)

Vacationer hotspots driving demand

The Airbnb mannequin thrives in tourist-heavy areas. Fashionable locations like Goa, Bangalore, Nainital, and Rishikesh witness sturdy demand for short-term stays, significantly throughout peak seasons. In India, the holiday leases market is projected to succeed in $2.39 billion by 2025, rising at an annual charge of seven.71% to hit $3.22 billion by 2029, as per market analysis agency Statista. 

“Goa experiences each on-season and low season demand. Even throughout off-seasons, vacationers nonetheless come for the climate and celebration tradition. My community of property homeowners ensures that if one itemizing is totally booked, referrals are handed round on a fee foundation,” Murgod defined.

Ladies within the recreation

Indian girls aren’t simply opening their doorways to friends—they’re unlocking a multi-crore alternative within the short-term rental recreation. With practically 30% of Airbnb’s hosts in India, they raked in Rs 260 crore in 2024, proving that hospitality is greater than a aspect hustle—it’s severe enterprise. Greater than half of them boast five-star critiques, outshining competitors and reshaping India’s journey panorama. And it’s not nearly internet hosting. Ladies vacationers, led by millennials and Gen Z, are reserving stays throughout Goa, Varanasi, and even London, embracing immersive experiences with newfound confidence. As Airbnb fuels each monetary independence and wanderlust, Indian girls are turning their houses—and their travels—into highly effective financial property.

The rise of property administration fashions

With rising demand, new enterprise fashions have emerged. Skilled property administration companies have gotten frequent, the place hosts delegate operations to companies in trade for a income cut up. This fashion, the Airbnb mannequin is giving extra employment alternatives for a lot of. 

“In Goa, some managers deal with as much as 40 properties with out proudly owning them. Nevertheless, the everyday 60-40 or 70-30 fee splits didn’t appear favorable to me,” Murgod stated.

For Lodha, the important thing to success lies in meticulous maintenance. “We hold a warehouse stocked with spare furnishings and home equipment close to our properties. If a eating desk breaks after an 11 a.m. checkout, our staff ensures a substitute earlier than the subsequent visitor arrives at 4 p.m.”

Celeb BnBs!

Indian celebrities are more and more getting into the short-term rental market by Airbnb, leveraging their properties as industrial property. Janhvi Kapoor’s property in Chennai, Shah Rukh Khan’s home in South Delhi, Yuvraj Singh’s villa in Goa, and Arjun Mathur’s Airbnb itemizing in Goa are positioned as high-value leases. These celebrity-owned properties cater to vacationers looking for premium stays, aligning with the rising demand for short-term leases in India. The pattern displays the broader shift within the hospitality market, the place high-profile people are monetizing actual property by platforms like Airbnb, contributing to the growth of the posh rental section.

Challenges and rules

Regardless of its profitability, Airbnb internet hosting comes with challenges—excessive visitor expectations, upkeep, authorized points, and group resistance.

“Navigating zoning legal guidelines is hard. Even when a state permits short-term leases, native rules could prohibit operations. We conduct thorough due diligence earlier than investing,” Lodha defined.

To keep up group relations, hosts are taking proactive measures. “We have interaction with neighbors earlier than itemizing, implement strict noise insurance policies, and have 24/7 safety monitoring. If there’s a grievance, we resolve it instantly,” Lodha added.

Moreover, this market increase is certain to hit a saturation level, as Sharma identified. If, in a society with 20 properties, 10 are listed on Airbnb, the oversupply will drive down demand and profitability, in the end stalling progress.

Sustainability of the mannequin in India

Whereas Airbnb has disrupted hospitality globally, its long-term viability in India stays a debated matter. Nevertheless, hosts see sturdy progress potential. Airbnb reported a powerful Q3 2024, with income rising 10% year-over-year to $3.73 billion, pushed by improved North American journey developments and robust demand in Asia-Pacific and Latin America. The corporate posted a internet earnings of $1.37 billion, or $2.13 per share, assembly analyst expectations. 

“In India, property values rise quicker than within the U.S. The market is shifting in direction of premium experiences, and demand for high-end trip leases is stronger than ever,” Lodha identified.

For Sharma, the important thing lies in strategic growth. “We’re shifting into Rishikesh, the place tourism is rising quickly. Brief-term leases will proceed to flourish in locations with sturdy traveler curiosity.”

As extra traders enter the house, India’s Airbnb increase exhibits no indicators of slowing down. Nevertheless, evolving rules—related to those who affected OYO in India—together with aggressive pressures and shifting traveler preferences, would require hosts to remain adaptable to keep up profitability.