Holiday homes, also known as vacation homes or second homes, are becoming increasingly popular in India. Particularly over the past few years, holiday homes have moved from being a luxury indulgence to becoming a second home and a smart investment choice. And the momentum is only growing.
Whether it’s the charm of green open spaces and clean air, or the financial appeal of steady rental income, more families are looking at second homes in beach and hill destinations as the perfect blend of lifestyle and returns.
“Our latest India Luxury Residential Outlook 2025 shows this shift clearly—54% of HNIs are keen on owning a holiday home in the hills or by the beach. Convenience is key, with 55% preferring properties within a four-hour drive and 27% a direct flight from their primary residence,” says Ashwin Chadha, CEO, India Sotheby’s International Realty.
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Goa remains the frontrunner, but demand for homes in scenic hill stations, and farmhouses at urban peripheries, are not too far behind. “While most UHNIs and HNIs buy these homes for personal retreats, many are also tapping into the thriving luxury vacation rental market— to generate better rental yields,” adds Chadha.
According to industry reports, the homestay sector is also experiencing a surge, with nights stayed increasing by 41% in FY23 and expected to grow 40% in FY24 and 36% in FY25. The gross merchandise value (GMV) for homestays grew by 74% in FY23, with an additional growth of 52% expected in FY24 and a further 40% projected for FY25.
“Locations like Goa, Uttarakhand, and Himachal Pradesh dominate the market, as luxury travelers increasingly seek private amenities, pet-friendly accommodations, and scenic retreats,” says Sanjay Khanna, Co-founder and Promoter, Scapes Hospitality.
“In the meantime Himachal Pradesh has emerged as a prime destination for second-home investments, offering both high rental yields (3-6%) and strong property appreciation,” informs Sameer Mutreja, Co-founder and Promoter, Scapes Hospitality.
For instance, luxury property in Kasauli has been witnessing double-digit price growth over the last few years. Luxury villas in the region have an average average (ADR) of Rs 8,500 per room, with occupancy rates peaking at 55% during summer. Additionally, villa rentals in Himachal Pradesh grew 25% YoY, aligning with the 30% YoY growth seen in the northern hill regions.
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