For years, Airbnb offered Indian homeowners a tempting proposition: turn an empty house into a short-term rental and earn far more than the 2–4% yield typically available from conventional renting.
This made the platform a lucrative option for hosts, but as listings surged across the country, that premium is beginning to disappear.
Take the case of Chandigarh-based Harshdeep Kaur, who converted her home into an Airbnb in 2021, to fetch the 25% premium she had then estimated over renting. “There was a lot of growth in the first 1.5 years, but then the response weakened as more people came to know about it,” she said, noting that properties in the Chandigarh Tri-city area have increased from just 300 in 2021 to over 800 now. “To tackle the increasing competition, we had to lower our per night charge to ₹4,000 from ₹5,500- 6,000 when we started,” she added.
Data from AirDNA, a platform that tracks global short-term rental performance, shows an year-on-year increase in listings across Indian cities between 21% (in Ahmedabad) and 72% (in Hyderabad) till 30 June 2026. The average daily rate or average price paid for all booked rooms during the same period has fallen between 6.5% (in Mumbai) and 43% (in Jodhpur).
Jaipur, Goa, Udaipur, Varanasi, and Jodhpur have seen their revenues fall 7-14%.
Actress Parul Gulati recently said on a podcast that she bought a 2 BHK villa in Nerul, Goa for ₹3.1 crore in 2021, expecting she could charge around ₹40,000- 45,000 a night on Airbnb but she’s actually charging ₹11,000 a night. Her villa generates around ₹15-16 lakh a year, translating into a yield of 3.3%. “Reality hit me because back then there weren’t so many luxury villas and over 4-5 years there are way more properties,” she said on the podcast.
“Prime markets are saturated,” said Senthilprabhu Eswarakumar, founder and CEO of Suprhost, an Airbnb consultant.
He started with two properties in Bangalore, both financed, in 2013-14, when the city was emerging as a start-up capital. He was able to build a passive income stream from Airbnb and also pay off the property loan. Between 2020 and 2022, he decided to sell both of them, moved to Coimbatore and constructed another property after researching for seven months, as he saw strong demand and less awareness in Tamil Nadu.
After listing it, within 60 days, he got the ‘super host’ status in 2023 and has been earning around ₹2 lakh monthly since then while also consulting others on how to build and maintain.
Sharad Sud, a global Airbnb specialist said, “If you started in 2022, you could have made a lot of money because demand was exploding due to revenge travel post-covid but over a duration of time, competition has increased and differentiation has gone down.”
Delhi-based Harsimran Singh, who runs multiple listings across the city agreed that the market has become extremely competitive, with many owners listing their properties at very low prices without fully understanding the actual potential and value of their property.
Increasing Airbnb supply and rising competition are pushing back hosts towards traditional renting and longer term stays for a predictable cash flow with lower operating costs. Kaur said that the premium for listing on Airbnb compared to renting is slowly shrinking as prices have to be competitive and the decor has to be changed periodically just to remain relevant.
She prefers hosting working professionals and people visiting their home country who want to stay for more than a week, as that reduces her maintenance costs by 10-15% compared to short-term rentals.
In Goa, where revenue has fallen, many hosts are giving a monthly deal. Sud calls it a yield management strategy to convert difficult-to-sell inventory into a longer lower-cost booking and to avoid constant cleaning hassles.
“Essentially, they are doing a rental. For an owner, ₹1.2 lakh guaranteed for a month can sometimes be more attractive than a theoretical ₹1.5 lakh from nightly bookings, because the vacation rental business comes with vacancy, commissions, cleaning, cancellations and much higher operating effort.”
