When you scroll through Instagram and see hosts showing off their beautiful villas in Goa or hillside cottages in Manali, it’s easy to assume running a homestay is a shortcut to easy money. Many property owners have the impression that simply listing a spare room or a holiday home on Airbnb or Homeyhuts will bring in steady income all year round. But the reality behind those picture-perfect listings is often quite different.
Over the last few years, I’ve met dozens of hosts across India—from small-town retirees renting out a floor of their house to younger investors trying to scale a portfolio of vacation rentals. Most of them eventually realize there are hidden costs and regional challenges that eat into their earnings. If you’re thinking about starting a homestay or wondering why your profits aren’t matching the glowing success stories you read online, it helps to look at the full picture: what people really earn, what it costs to keep a property running, and why some regions can feel like a goldmine one season and a ghost town the next.
One of the biggest factors in your profit margin is where your property is located. In India, popular tourist regions see dramatically different occupancy rates and seasonal swings.
If you have a homestay in Goa, for example, you can expect peak earnings between November and February. During this time, foreign tourists, domestic holidaymakers, and even long-stay remote workers drive up demand. A well-maintained 2BHK near a beach can easily bring in ₹2 to 3 lakh per month in high season. But from May to September, bookings drop sharply as the monsoon arrives. Many owners see occupancy fall below 30%, and rates often get slashed to keep any flow of guests at all.
Himachal Pradesh, especially towns like Manali, Shimla, or Dharamshala, has similar seasonality. Peak months are April to June and then again around December, when tourists come for snow. For the rest of the year, footfall slows, and you may find you’re barely breaking even if you don’t plan ahead.
In cities like Jaipur or Udaipur, domestic travel remains more stable throughout the year, especially around festivals and wedding season. Metro cities such as Bangalore or Pune, on the other hand, often have steadier short-term stays from business travelers and weekend visitors, which helps balance out the peaks and troughs.
Many new hosts get carried away by high-season revenue and forget to average out earnings over twelve months. Before you assume your property will make you a fortune, it’s essential to ask yourself: What is my realistic annual occupancy rate? Can I cover my costs when the crowds disappear?
Another reason profit margins can disappoint first-time hosts is the long list of hidden expenses. It’s tempting to look at gross revenue—say, ₹1 lakh in bookings per month—and assume most of that goes into your pocket. But a closer look often reveals a different story.
One of the biggest expenses is commission. Most platforms take a cut of each booking. Airbnb, for example, typically charges 3-15% depending on the service model. If you work with an OTA aggregator or channel manager, they’ll also take a fee.
Cleaning and maintenance are another significant chunk. If you have a full-time caretaker or cleaning staff, salaries can run ₹10,000–₹20,000 per month or more. Even if you clean yourself, you’ll still spend on supplies and deep cleaning between guests.
Utilities add up faster than you might expect. High-speed Wi-Fi, electricity for air conditioning or heating, water charges, and gas all chip away at earnings. In tourist hotspots, electricity bills can double during peak months when every guest insists on running the AC nonstop.
Then there are repairs and upkeep. Leaky faucets, malfunctioning geysers, broken locks—these are inevitable in any property. If you plan to maintain good reviews, you need to fix issues quickly, which costs money. Even small improvements like fresh paint or replacing worn-out linens can add up over a year.
Finally, consider property taxes and compliance costs. Many states require homestays to register, which involves fees, inspections, and sometimes paying GST if you cross a certain threshold of income. Skipping these steps might seem easier in the short term, but fines and penalties can erase your profits overnight.
When you tally everything—commissions, salaries, utilities, repairs, supplies, taxes—some hosts find their true net income is 30–50% lower than the top-line numbers they boast about to friends.
No matter how good your property is, India’s travel market is seasonal by nature. This is often the hardest part for new hosts. You can be fully booked in December, then sit empty through March.
In places like Goa and Manali, some experienced owners save a portion of their peak-season profits to cover lean months. Others offer discounted long stays to digital nomads or relocate to other platforms that cater to business travelers.
Seasonality also affects staffing. You might need to let go of extra help in the off-season or pay retainers to keep trusted workers available. Some hosts try to diversify by adding experiences—cooking classes, guided tours, or workshops—to smooth out their income.
If you plan to get into hosting, be prepared for months when your income might fall to almost nothing. A clear strategy for these gaps—like offering monthly stays or collaborating with local tourism operators—can help you stay afloat.
Given all these challenges, it’s natural to wonder if hosting is worth the effort. The answer depends on your situation and expectations.
If you already own a property in a tourist hotspot and can manage it yourself or with minimal help, hosting can be a meaningful source of income. Many families in Rajasthan or Himachal Pradesh have successfully run homestays for years, covering their household expenses and even funding children’s education.
But if you’re buying a property purely as an investment, remember that profit margins are tighter than they look. You’ll need to factor in financing costs, market fluctuations, and the work involved in keeping guests happy.
Running a homestay is not passive income. It requires time, attention to detail, and the ability to deal with complaints, last-minute bookings, and occasional damages. If you enjoy hosting and take pride in maintaining a good guest experience, you’ll likely find it rewarding. But if you see it only as a side hustle that prints cash with little involvement, you might be disappointed.
The homestay business in India has grown fast in the past decade, and it can certainly be profitable. But the reality is more complicated than social media snapshots suggest. Your profit margins depend heavily on your region, seasonality, and ability to keep expenses in check.
Before jumping in, take the time to do a detailed calculation: What is your expected occupancy over 12 months? What are your fixed and variable costs? Do you have a cushion for slow months? Are you prepared to handle the operational work or hire reliable help?
By understanding the hidden truths behind the earnings, you’ll be better equipped to make hosting a sustainable, satisfying venture—one that doesn’t just look good online but also works in real life.
Ready to make the most of your hosting journey? Partner with Homeyhuts to simplify property management and maximize your rental potential. Our platform offers cutting-edge solutions to help you attract more guests and achieve greater success.
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