De Wit, aged 43, fled with only his passport, leaving behind all his belongings before he was arrested in Qazigund, a town just under 72.4km south of Srinagar.
Groves spent more than a month on the houseboat while De Vit booked into a separate room on Thursday, police said, adding that they were investigating whether the two knew each other.
Police said the victim's body will be examined to determine whether she was sexually assaulted before being killed.
Samir Shoda, the son of the houseboat's owner, was helping police with their inquiries, Britain's The Sunday Telegraph reported.
He told the paper that he met Groves during a holiday in Goa and that he had invited her to stay at the hotel.
Shoda, who said he had been out with friends at the time, added: "She was an amazing person. She understood everything, we shared our problems, everything."
His father, G.M. Shoda, said he was woken by a commotion at 2.30am and sent his other son Irfan to investigate, who found Groves dead.
-AAP
