If your travel plans begin with opening a hotel-booking app, you're still in the minority in India.
Think of the movie Hum Saath Saath Hain. When the whole family heads to Rampur, nobody is looking for hotel deals. Or think about that relative who calls at the last minute and says they are staying the night. Your mother somehow convinces you to share your room, ruining your plans. We all have gone through it. It's fine. That's how a large part of India travels.
Many overnight travellers stay with friends and relatives. Others choose dharamshalas, guest houses or other forms of accommodation that rarely feature in the ads we see in magazines. Hotels are only one part of the story, and largely an urban one.
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The choice depends heavily on why people travel in the first place. The latest Domestic Tourism Expenditure Survey by the Ministry of Statistics and Programme Implementation (MoSPI), covering July 2025 to June 2026, offers a glimpse into these choices.
In the previous article, I showed that Indians travel for more than holidays. Religious journeys dominate overnight travel, while social visits, education, business and shopping make up a sizeable share. And that shapes where they stay. That's what we discuss in this part.
Hotels are One Part of the Story
Religious travel dominates overnight journeys in India. Naturally, that creates a market of its own. Many pilgrims stay in dharamshalas because they are usually located close to temples and other religious sites. Their purpose is simple: to provide affordable accommodation for devotees. They could be free or charge a nominal sum.
This ecosystem has existed for decades. But it is changing. Many hotel chains are expanding to such locations, tapping this demand. Yet the survey suggests that traditional accommodation remains common. More than a third of urban pilgrims stay in hotels. But one-fourth still choose dharamshalas. Among rural pilgrims, the pattern is reversed. Dharamshalas are the most common accommodation option, while hotels play a much smaller role. Hotels and dharamshalas compete, but serve different purposes.
Take social travel. When people travel for weddings, family functions, or to visit relatives, choosing a place to stay is a no-brainer. Most of us stay with friends or relatives. A large family and social network becomes a strength in times like these. They too compete against hotels.
Leisure travel sits somewhere in between. Hotels play a much larger role here, but they are still far from the whole story. Many leisure travellers also continue to stay with friends and relatives.
India's domestic travel story is bigger than hotels. Much of India's travel economy runs through family homes, dharamshalas and countless other places that never show up in hotel occupancy data or earnings of big companies.
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Where the Money Goes Depends on Why Indians Travel
Indians spend nearly Rs. 16,000 on an average overnight trip. But where that money goes depends almost entirely on why they are travelling.
Indians spend the most on a medical overnight trip. It costs them over Rs. 32,000, nearly three times as much as a leisure trip. But that money doesn't enter the tourism space. Almost three-fourths of it is spent on hospital bills and medicines. Hotels, restaurants and transport operators get only a small share of everything.
Shopping trips tell a similar story. Travellers spend almost Rs. 19,000 per trip on average, making it the second-most expensive category. But more than 70% goes towards retail purchases rather than tourism services.
Think of a family saving for a once-in-a-lifetime trip to Kedarnath, or a couple planning a honeymoon in the Andaman & Nicobar Islands. In both cases, transport is the one expense that is hard to avoid. Across both leisure and pilgrimage travel, transport accounts for the largest share of spending.
That could be a reason many travellers cut costs elsewhere, especially on accommodation. Accommodation accounts for just 12% of spending on the average overnight trip. This could be because many Indians do not pay for accommodation at all. They stay with relatives, friends or in dharamshalas. That brings average costs down.
India Needs Better Budget Hotels, Not Just More Hotels
Data cannot explain why many Indians avoid commercial accommodation. But based on my own travels across the country, one possibility stands out. India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers. Hotel prices often feel disconnected from the experience on offer, especially when compared with destinations such as Sri Lanka, Vietnam, Thailand or Bali.
For many travellers, the choice may not be between a hotel and a dharamshala. It may be between an overpriced hotel, a homestay and no hotel at all. That points to a large opportunity. Better value-for-money accommodation could bring more travellers into the formal hospitality market without requiring them to spend a fortune.
It is hard to tell which way the causality runs. Do Indians avoid hotels because decent ones are too expensive? Or do they remain expensive because too few people use them? The survey cannot answer that. But it is a question worth exploring, for both businesses and policymakers.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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