Domestic tourism shifts in India: Accommodation is now the destination, says this report

Indian travel is going through a major transformation as preferences shift from traditional sightseeing to immersive, experience-driven stays. A new generation of travelers is prioritizing accommodation not just as a place to rest, but as an essential part of their journey.

A new report by Booking.com, in collaboration with Accenture, reveals that Indian travelers no longer view accommodation simply as a place to stay, but as an essential part of their trip. The third edition of The How India Travels 2025 highlights a fundamental change in Indian travellers’ preferences, where a stay is now an experience itself.

“The domestic traveler in India is rewriting the rules of travel. For them, accommodation is not part of the journey anymore – it is the destination itself,” said Santosh Kumar, Regional Director, South Asia, Booking.com. “They’re not just booking a room; they’re making an entire experience.”

Accommodations as the main attraction

This shift in focus means that travelers are now actively looking for unique experiences and an establishment that turns their stay into something unforgettable. With 80% of Indian travelers planning to spend most of their time at the property, well above the global average of 51%, the focus is shifting from “what is the rate?” to “What makes this stay special?”

Holidays are no longer just about visiting a destination, but experiencing a profound experience, and this is reflected in how much Indian travelers value deep retreats, cultural immersion, and thematic getaways.

With properties offering a variety of experiences—ranging from spiritual workshops to artistic pop-ups—sensing providers are moving toward a model where non-room revenue, such as food, beverage and event bookings, now accounts for up to 50% of profits in premium segments.

A new generation of travelers

The shift is not only evident in the activities guests are seeking but also in the diverse traveler profiles. The report identifies four basic traveler models:

1. Flight engineers (26-55, primarily women): They now lead travel planning, with 73% of respondents indicating that women take charge of planning their itinerary. This group values ​​safety, flexibility, and immersive cultural experiences.

2. Next generation pilot generation participants (Under 15): Influencing household decisions, this group has the power of “Veto” in everything from choosing accommodation to planning activity.

3. Uninvited explorers (28-43): Often sought out for short, diverting getaways, this collection values ​​thoughtful design, privacy, and experiences that tell a story.

4. Eternal travelers (60+): Older travelers look to reconnect with culture, spirituality, and heritage, and continue to travel and explore despite their age.

The rise of spiritual tourism, especially among younger generations seeking self-discovery, underscores this shift. For example, increasing demand for spiritual destinations such as Ayodhya, which attracted more than 16 million pilgrims in 2024, is shaping the hospitality sector. Major hotel chains are already focusing on destinations like Katra, Puri and Tirupati to cater to this growing demand for spiritual tourism.

Technology-driven transformations

An important factor in this transformation is the increased reliance on artificial intelligence and digital platforms to enhance the travel experience. More than half of Indian travelers use AI to plan a trip, and 83% see it as a tool that makes travel easier. This growing digital engagement isn’t just limited to trip planning; It extends to payment flexibility as well. The rise of UPI payments and options like Buy Now and Pay Later (BNPL) are accelerating booking decisions and meeting the needs of the tech-savvy traveler.

“We see AI moving from a novelty to an indispensable utility, allowing the industry to understand micro-segments like ‘trip engineers’ and ‘non-engagement explorers’ at scale,” said Anshul Gupta, MD & Travel at Accenture.

The ease of digital transactions and AI-driven experiences is shaping the future of the hospitality industry. Properties are investing in seamless digital experiences, as payment systems become a critical factor in improving booking conversions, especially among younger travelers and short trip planners.

Expanding the potential of hospitality in India

The future of India’s hospitality sector is linked to the growth of domestic travel. With average monthly searches for domestic travel from 103 million in 2022 to 141 million in 2024, demand for accommodation is growing rapidly. Forecasts show that hotel demand in India will grow by 10.5% annually until 2027, while hotel supply expansion will lag behind at just 8%. This creates a huge opportunity for investors and hospitality players, especially in Tier II and Tier II cities, where occupancy rates are maintained throughout the year.

With India set for 5.2 billion domestic trips by 2030, the industry must reimagine accommodation, diversify into emerging cities, and leverage digital platforms to meet growing demands. The government’s focus on infrastructure projects and developing new tourism circuits enhances growth potential.