Airbnb not a lucrative earning source for Indians anymore
What's the story
Airbnb, once a lucrative platform for Indian homeowners to earn extra income, is witnessing a shift in its dynamics. The rapid rise in short-term rental listings is driving down nightly rates and increasing competition. This is putting pressure on hosts' returns and making it difficult for them to maintain their expected profit margins.
Market adaptation
'Had to slash my nightly rate'
Chandigarh-based Harshdeep Kaur, who converted her home into an Airbnb in 2021, has seen these changes firsthand.
Initially expecting a 25% premium over conventional rent, she said the response weakened as more people learned about the platform.
In the Chandigarh Tri-city area alone, properties have jumped from around 300 in 2021 to over 800 today.
To stay competitive amid this surge, Kaur had to slash her nightly rate from ₹5,500-6,000 to ₹4,000.
Rate impact
Airbnb listings have grown by 21% in Ahmedabad
Data from AirDNA shows that Airbnb listings have grown year-on-year across Indian cities by 21% in Ahmedabad and a whopping 72% in Hyderabad till June 30, 2026.
However, this surge in supply has also led to a decline in average daily rates.
Mumbai saw a drop of 6.5%, while Jodhpur witnessed the steepest fall at an astonishing 43%.
Alternative strategies
'Reality hit me'
As revenues decline, hosts are looking for alternatives.
Actress Parul Gulati, who bought a two-bedroom villa in Goa for ₹3.1 crore in 2021, now charges around ₹11,000 per night and earns about ₹15-16 lakh annually. This translates into a yield of just 3.3%.
She said, "Reality hit me because back then there weren't so many luxury villas and over 4-5 years there are way more properties."
Shift in strategy
Hosts now opting for monthly stays
With nightly bookings becoming unpredictable, some hosts are now opting for monthly stays and traditional rentals.
Kaur said longer bookings from working professionals can cut maintenance costs by 10-15%.
In Goa, monthly deals are increasingly being used to fill inventory and reduce cleaning costs.
Bengaluru-based Shilpa Ralhi also shifted away from the homestay model after facing cancellations and maintenance challenges.
Market evolution
'Short-term rentals can yield higher returns than conventional rentals'
Prasun Kumar, CMO at Magicbricks, said Airbnb is becoming more of a hospitality business than a source of passive income.
He noted that while short-term rentals can yield 32.4% higher returns than conventional rentals in Tier 1 cities, this premium drops to just 6.7% in Tier 2 and Tier 3 cities.
"People today are focusing on risk-adjusted returns, accounting for occupancy volatility," he added.