Rising Airbnb listings are squeezing homeowners’ rental returns

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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.