Homestays will grow and play significant role in tourism to grow annual rate of 11-11.5 percent

Homestays will grow and play a significant role in tourism as the country's travel market is projected to grow at an annual rate of 11-11.5 percent to USD 48 billion by 2020, a consultant said.

"There is no doubt that the country's hospitality industry must diversify its offerings to keep up with this exponential growth and tap its potential. Alternative accommodations such as homestays - which currently occupy only a small section of the market - will grow in stature and play a significant role," Anarock Property Consultants Chairman Anuj Puri said Thursday.

The country witnessed a 15.6 percent annual increase in foreign tourist arrivals in the calendar year 2017 as against the previous year. "Homestays are indisputably one of the means to cater to growing demand.

Rising disposable incomes, focused government measures to boost the travel industry and the growing appetite for travel is accelerating this growth," Puri said without giving any number of homestays now.

As per the government data, the country will need more than 2.5 million rooms in the hospitality industry to meet the snowballing demand by 2020.

In its efforts to bridge the growing demand-supply gap, the union government has provided several incentives to home stays, the consultant said.

The government has also relaxed the licensing rules for people seeking to convert their property into certified homestays and is developing a centralized database. It is also urging the state governments to exempt homestays from service taxes and levies including water charges, electricity, and other commercial charges to attract more homeowners to convert their property into homestays, Puri said.

Simultaneously, it is working with online aggregators like Airbnb that list home stay property and introduce guest houses and bed-and-breakfast options.