In the evolving landscape of real estate investment, one question has stirred intense debate among property owners across India: Is Airbnb more profitable than traditional long-term rentals? As the Indian hospitality and housing sector undergoes a generational transformation, many small investors and homeowners are choosing between becoming short-term hosts or conventional landlords.
While both models offer distinct financial advantages, the right choice depends on a mix of location, investment goals, risk appetite, and lifestyle preferences. But don’t take our word for it—real-life stories of Indian homeowners reaping benefits from both sides provide more than enough insight.
The Airbnb Boom: A New Economy for New India
When Airbnb officially entered India in 2016, it seemed tailor-made for a growing millennial population eager for experiences over traditional hotels. What began as an urban trend quickly expanded to smaller towns, spiritual cities, and hill stations.
Success Story: Vandana Sharma, Rishikesh
Vandana Sharma, a retired schoolteacher from Rishikesh, transformed her modest three-bedroom home overlooking the Ganges into a spiritual haven for yoga enthusiasts. Listed on Airbnb in 2018, she began earning ₹1.5–2 lakh per month during the tourist season—almost five times what she would earn from a long-term rental.
“I hosted travelers from 43 countries in three years. I never imagined this house would become a global yoga stop,” she said in an interview with The Hindu. Vandana was also featured in Airbnb’s global campaign in 2020 for Women Hosts of the Year.
This boom isn’t isolated. According to a 2023 report by Knight Frank India, Airbnb-style short-term rentals in India grew by over 115% post-pandemic, especially in tourist-rich regions like Goa, Kerala, Manali, and Jaipur.
The Steady Road: Long-Term Rentals Still a Safe Bet
Despite the buzz around short-term rentals, long-term rental properties remain a cornerstone of India’s real estate stability. With increasing urban migration and skyrocketing property prices, demand for rental housing is surging in metro cities like Delhi NCR, Bengaluru, Mumbai, and Pune.
Case Study: Amit Patel, Bengaluru
Amit Patel, a software engineer-turned-investor, owns three 2BHK apartments in Whitefield, Bengaluru. While he flirted with the idea of listing them on Airbnb, he stuck to corporate leases. Each flat fetches around ₹30,000 monthly and stays occupied for 11–12 months a year.
“There’s no cleaning headache, no guest complaints, no platform fees. I get consistent income and don’t need to hire a property manager,” he told The Economic Times.
He also pointed out that corporate tenants are often more reliable, especially with MNCs offering company-paid housing for middle management.
Airbnb vs. Long-Term Rental: The Profitability Equation
Here’s a comparison based on key parameters:
| Parameter | Airbnb | Long-Term Rental |
| Monthly Income Potential | High in tourist areas (₹1.5–3 lakh) | Moderate and stable (₹20k–50k) |
| Occupancy Rate | Variable (seasonal dips) | Consistent (11–12 months/year) |
| Maintenance | High (cleaning, linens, repairs) | Low (tenant handles minor issues) |
| Regulatory Risks | Increasing (local bans, licenses) | Minimal |
| Taxation | GST applicable in some cases | Simple rental income tax |
| Freedom to Use Property | Flexible (owner can block dates) | Locked during tenancy |
What Experts Say
According to Anuj Puri, Chairman of Anarock Property Consultants:
“Airbnb has changed the way Indians perceive homeownership, especially in tier-2 towns. But long-term rentals still provide financial predictability, which most middle-class investors prefer.”
Even the Ministry of Tourism has started encouraging homestay-based hospitality in rural and semi-urban areas under the ‘Dekho Apna Desh’ campaign. In 2023, Airbnb partnered with the ministry to train over 1,000 women hosts, many of whom now earn more than ₹50,000/month.
Regulations and Pitfalls
While Airbnb opens up income avenues, there are regulatory red flags to watch for:
- In cities like Mumbai and Bengaluru, housing societies often ban short-term rentals.
- Several state governments are considering licensing requirements for hosts to curb illegal hotels.
- Platforms like Airbnb also charge host service fees (up to 20%)—something many new investors overlook.
In contrast, long-term rentals are governed under the Model Tenancy Act, making it easier to resolve disputes and recover properties if needed.
The Millennial Factor
India’s younger generation is not just investing in homes; they’re leveraging tech-savvy platforms to maximize returns. Platforms like StayVista, Lohono Stays, and SaffronStays have emerged as premium vacation rental networks, often collaborating with NRIs and HNIs.
One such example is Aarti Mehta from Ahmedabad, who turned her ancestral villa in Udaipur into a luxury retreat. After partnering with StayVista in 2022, she clocked over ₹18 lakh in bookings in the first year and won a feature in Business Standard as one of India’s “Top 10 Digital Hosts”.
Which One Should You Choose?
If your property is in a tourist hotspot, and you’re willing to invest in hospitality and upkeep, Airbnb or short-term vacation rental could yield superior returns. But if you prefer stability, low maintenance, and consistent cash flow, the long-term rental route is ideal.
For most Indian homeowners, the answer may lie in hybrid models—renting long-term in off-season months and switching to short-term during festivals or tourist peaks.
As India’s gig and digital economy surges, expect more “accidental landlords” turning into Airbnb entrepreneurs. But whether you choose a steady lease or a vibrant hosting gig, the golden rule remains: Location, Legality, and Longevity.
