As per a research report by Axon Developers, the branded rental villa market in India is sized at USD 329.6 million in 2023. The alternative hospitality segment, which includes holiday homes, farm stays, plantation bungalows, beach homes, vintage havelis, etc. is growing at a staggering pace. It is set to reach USD 1377 million value by 2028, growing at a CAGR of over 33%.
While mainstay hospitality will continue to gain strength to strength, alternative segment such as second homes and holiday villas will also play a critical role.
“One of the main reasons behind the steep jump is that many of us now don’t want a 250 Sq ft room in a hotel or a resort. Rather, they want a more personalized space with tailor made top tier amenities in a 4 bed-room villa. From maverick millennials to multi-generational families, the demand for serviced rental living is rising in India.” AddedMr. Ankit Kansal, MD, Axon Developers.
“Though not a novel idea, the pandemic gave a big push to the popularity of alternative stays. The rise in remote working, digital nomadism, workcation, etc. gave a lot of people the liberty to stay and seamlessly work amidst idyllic locations.” Further added Mr. Kansal.
Recent years has seen multiple platforms such as Stay Vista, Saffron Stay, Lohono stays, Eko Stays, etc swarming the market. These specialized niche players acquire, re-package, market, and operate top-quality rental properties throughout India, from the coffee states of Coorg to the scenic Himalayan mountains of Gulmarg.
Mainstay hotel groups are also getting lured towards the segment. Taj hotels has made an aggressive foray in the segment under the flagship of Ama Stays, which has around 100 units. The group plans to add around 400 additional units by 2026.
Despite a high growth category, the overall market is still relatively unpenetrated. India has around 10,000 villas that can be used for hospitality purposes as well. However, as per our research there were 1150 branded villas by end of 2023, a modest penetration of 11.5%.
57% of the rental villas are located at remote location, while 31% within city boundaries. 12% of the existing supplies are located at short distance travel from the city center. Tranquil backyards of urban centers in India are also the new favorite as they offer peaceful ambiance to rest and recharge making them a perfect weekend gateway. Consequently a lot of new projects are coming up in Karjat, Alibaug, Panvel, Mulshi, Nandi Hills, etc.
In next 5 years, we may see up to 4,000 villas entering the branded segment, as per the Axon research. Couple of factors will be instrumental in the future growth. Technology is changing the space by bringing property owners, operators, tourists/ renters, and other ancillary players (F&Bs, wellness companies, etc.) together in the most transparent way possible.
Secondly, big developers are now venturing with a slew of community styled projects in numerous parts of India including Himalayan hill stations, secluded sea beaches of coastal India, hilly trails of Sahyadri, backyards of Aravalli mountains, etc.
Author
-
by
-
