A $10 billion makeover of Ayodhya — How Ram Mandir will unlock India’s tourism potential

Following the inauguration of the new Ram Temple in Ayodhya, Jefferies projects tourism to surge and increase economic and religious migration in the town, with multiple sectors standing to benefit including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc.

“Tourism contributed $194 billion to FY19 (pre-COVID) GDP and is expected to grow at an 8% CAGR to US $443 billion by FY33. Tourism to GDP ratio in India at 6.8% of GDP, puts it below most of the large emerging/developed economies,” the report stated.

Jefferies also highlighted that religious tourism is still the biggest segment of tourism in India. Several popular religious centres attract annual tourist traffic of 10-30 million despite the existing infrastructural bottlenecks. Hence, the creation of a new religious tourist centre (Ayodhya) with improved connectivity and infrastructure can create a meaningfully large economic impact, it said.

According to the brokerage, demand is currently outstripping supply in Ayodhya. The city has 17 hotels with 590 rooms and 73 new hotels in the pipeline, of which 40 are already under construction.

Indian Hotels, Marriott International and Wyndham among others have already signed deals for hotels. IHCL has signed contracts for two new properties in Ayodhya expected to be operational in 2027 while ITC Hotels is exploring opportunities in the temple town and OYO is looking to add 1000 hotel rooms, as per the report.

Reflecting on the FMCG sector, it said QSR chains such as Restaurant Brands Asia (RBA), Devyani International, and Jubilant Foods are either in discussions to set up outlets or have already begun setting up outlets. Burger King, meanwhile, already set up one store in the city centre in the first half of 2023.

In the aviation and railways spaces, Indigo has announced Ayodhya as its 86th domestic destination with direct flights from Delhi, Ahmedabad and Mumbai. Air India has announced direct flights from Bengaluru, Kolkata and Delhi. Spicejet and Akasa Air, on the other hand, have also announced flights connecting Ayodhya with multiple cities.

The Indian Railway Catering and Tourism Corporation (IRCTC) has announced tour packages to Ayodhya.