Ayodhya to attract 50 mn tourists annually as Ram Mandir set to bring divine cheer for travel, hospitality firms

Ram Mandir inauguration: PM Modi will inaugurate the Ayodhya Ram Temple on January 22, which makes it one of the biggest religious events.

The grand consecration of Shri Ram temple in Ayodhya will lead a $10 billion makeover of the small town into a global tourist hotspot, growing hotels capacity 5-fold, and attracting hospitality, food, travel, and transport businesses to serve a massive captive customer base.

The small town will attract top business franchises: Hotels including Indian Hotels, ITC, Marriott, and OYO; food chains including Burger King, McDonald’s, Jubilant Foods, and Devyani International; and airlines such as IndiGo, Tata group’s Air India, Spicejet and others, said Jefferies in a note.

The religious site is set to attract over 50 million tourists every year, said Jefferies, adding: “Religious and pilgrimage sites like Ayodhya, The Golden Temple, Vaishno Devi, etc. present significant captive markets offering strategic first-mover advantage.”

Hotels, hospitality

Hotels and hospitality companies are set to grab the increased footfall from pilgrims and tourists, both domestic and international. The sudden surge in demand and tourism will act as a multiplier effect with new hotels and other economic activities, said the note.

Ayodhya has around 17 hotels with nearly 590 rooms at present. However there are 73 new hotels in the pipeline, of which 40 are already under construction, according to Jefferies.

Indian Hotels has signed contracts for two new properties in Ayodhya, which will be operational in 2027, while ITC Hotels is exploring opportunities. Meanwhile, OYO will also add 1,000 hotel rooms in the city.

Jefferies believes Tata Group-owned Indian Hotels Company, ITC Hotels, EIH, and OYO Rooms will be the potential beneficiaries standing to benefit from the increase in footfalls and the surge in demand in Ayodhya.

FMCG, QSR, food chains

The brokerage firm also anticipates a substantial demand for FMCG, consumer staples, and quick service restaurant (QSR) chains in Ayodhya on the back of a surge in tourism and residents.

Eyeing that demand, 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. On the other hand, Burger King stood ahead of the curve as it had already set up a store in the city in the first half of 2023.

Ayodhya Ram Mandir Live Updates

Among FMCG and QSR names, Jefferies sees Jubilant Foodworks, Britannia Industries, Godrej Consumer, ITC, Westlife Foodworld, Hindustan Unilever, Devyani International, and Sapphire Foods as the potential beneficiaries of Ayodhya's revamp.

Aviation, railways and ancillaries

As the city of Ayodhya attracts a significantly higher number of tourists and residents, it will also require domestic and international connectivity to be facilitated to improve travel, and this is where sectors such as aviation, railways, and ancillary service providers stand to benefit, per Jefferies.

Indigo owner InterGlobe Aviation has already announced Ayodhya as its 86th domestic destination, with direct flights lined up from Delhi, Ahmedabad and Mumbai. Tata Group-owned Air India also announced direct flights to Ayodhya from Bengaluru, Kolkata and Delhi.

Spicejet and Akasa Air also jumped on the bandwagon and announced flights connecting Ayodhya with multiple cities. Railway services company IRCTC also announced tour packages to Ayodhya.

Jefferies pegs InterGlobe Aviation (Indigo), SpiceJet, Akasa Air, IRCTC, Make My Trip, and Ease My Trip as the key beneficiaries of an increase in travel to Ayodhya, and its consequent rise in passenger demand.

Also Read | Ram Mandir may attract 50 mn tourists a year: Jefferies assesses the Ayodhya multiplier

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.