The tourism department said the policy was introduced to meet the growing demand for affordable accommodation amid rising tourist footfall in religious and cultural destinations such as Ayodhya, Varanasi, Mathura-Vrindavan and Agra.
Officials said applications under the policy have increased significantly since the beginning of 2026, indicating growing interest in tourism-related businesses.
According to the statement, urban homestays are witnessing strong participation in Varanasi, Mathura, Agra, Ayodhya, Prayagraj and Lucknow, while rural homestays are expanding rapidly in the Bundelkhand region, particularly in Banda, Hamirpur, Mahoba and Jhansi.
Districts such as Barabanki, Bahraich, Pilibhit and Lakhimpur are also emerging as rural tourism destinations, the statement said.
The government said the policy is generating local employment opportunities, with families converting vacant rooms into accommodation units. It added that the model is benefiting retired persons, women-led households and families with unused residential properties.
The homestay and farmstay model is enabling tourists to connect with local culture and traditions while creating employment and self-employment opportunities in villages, Uttar Pradesh Tourism and Culture Minister Jaiveer Singh said.
Under the policy, registration of homestay and bed-and-breakfast units is being done through an online process. Registered units are eligible for benefits under the scheme and promotional support through the tourism department website, he said.
As per the policy framework, urban and rural homestays can have a maximum of six rooms and up to 12 beds. In bed-and-breakfast units, where owners do not reside on the premises, appointment of a caretaker is mandatory.
The statement said registered units would continue to be charged residential rates for electricity, water, house and sewer taxes.
Beneficiaries can also avail subsidies for rooftop solar panels under the Pradhan Mantri Muft Bijli Yojana.
The Manyawar Kanshiram Institute of Tourism Management would provide free skill development training to eight support staff members associated with registered units, the statement added.
