The Covid-19 pandemic has inflicted severe damage on the tourism and hospitality sector, with long-lasting implications even in the present day. Travel restrictions and bans implemented worldwide have resulted in substantial losses for the tourism industry. To sustain their operations during the pandemic, hotels worldwide have sought innovative solutions, such as offering staycation packages to local guests when domestic and international travel is restricted. This research paper examines the potential of hotel staycations in addressing the challenges faced by urban hotels in India, specifically the issue of excess inventory, and catering to the leisure needs of financially stable urban dwellers. Urban areas, as defined by the Ministry of Housing and Urban Affairs, encompass municipalities, corporations, cantonment boards, or notified town area committees with a minimum population of 5,000 and specific demographic criteria. As of the 2011 census, urban areas in India accounted for 31.14% of the total population, and this figure is projected to increase significantly in the future. Despite the financial stability of a significant portion of the urban population, studies indicate that they are not engaging in domestic tourism due to various reasons, including challenging job environments, limited vacation time, and work commitments. However, older families with more leisure time and savings demonstrate a higher propensity to spend on domestic tourism.