Rethinking Homestays

CSRC collaborated with NITI Aayog, along with the Internet and Mobile Association of India (IAMAI), as a knowledge partner to undertake the mapping of the regulatory landscape of Homestays in India. Participated in by Online Travel Aggregators like Airbnb and MakeMyTrip, the report titled “Rethinking Homestays: Navigating Policy Pathway” was released on 22 August 2025 by the Vice Chairman of NITI Aayog. Spanning four states—Goa, Kerala, Uttarakhand, and Uttar Pradesh—the report examined existing regulatory structures and the challenges faced by operators, regulators, community members, and aggregators.

The governments, at both the Union and state levels, have taken cognizance of these potentials. This is reflected by the fact that 18 remaining states in India have formulated their guidelines/schemes for homestays. These offer various fiscal, non-fiscal, tax, marketing, and capacity-building incentives. The 2025 Budget increased the allocation for tourism development and included homestays and tourism-related projects in the PM MUDRA Yojana loans.

While central and state governments have introduced guidelines and schemes, the regulatory landscape remains fragmented and unclear, constraining sectoral growth. Complex registration processes and inconsistent standards create friction among regulators, operators, and communities.

This report recommends a regulatory framework to establish an inclusive homestay ecosystem. It proposes a streamlined, light-touch, and harmonised regulatory framework. This is clubbed with extensive capacity building, including for regulators, fiscal and non-fiscal incentives, and improved ease of doing business.