New Delhi: Ayodhya is set to surpass Mecca and Vatican City in tourist footfalls, according to Jefferies. The grand opening of the temple comes with a large economic impact as India gets a new hotspot that could attract 50 million tourists a year, the research firm said in a January 21 note. That’s higher than the combined 30 million that the Vatican and Mecca see in a year.
A $10-billion makeover comprising a new airport, revamped railway station, township, and improved road connectivity will likely drive a multiplier effect with new hotels and other economic activities, Jefferies said, adding that it can also set a “template for infra-driven growth for tourism”. The temple will boost the position of Uttar Pradesh, already the second biggest draw among tourists in India, on the country’s map. It complements growing foreign investments into tourism, even though India ranks below several large economies on the sector’s contribution to GDP, which stands at 6.8%. Ayodhya’s rise on India’s tourism circuit will boost business for SpiceJet Ltd., Akasa Air LtMakeMyTrip Ltd., Indian Hotels Co., Britannia Industries Ltd. and Hindustan Unilever Ltd., among others, according to Jefferies.
Despite the existing infrastructural bottleneck, religious tourism continues to have a bigger contribution with most popular centers attracting close to 10-30 million tourist traffic every year, Jefferies said. With Ayodhya becoming a new religious tourist centre with improved infrastructure and better connectivity it will have a “meaningfully large economic impact”, the report said. As the grand opening of the temple has commenced, the brokerage expects Ayodhya to see close to 50-100 million visitors, That’s close to double that of Tirupati Temple in Andhra Pradesh, which sees 25 million visitors and has the highest collection at Rs 1,200 crore. Similarly, when comparing Ayodhya to global religious places like Vatican City or Mecca in Saudi Arabia, the expected footfall is much higher. Currently, Mecca gets 20 million tourists, followed by Vatican City at 9 million.
Jefferies said the new Ram Mandir, following a makeover of Rs 85,000 crore, is going to transform the city of Ayodhya into a global spiritual and religious tourist hotspot. It projects a surge in economic and religious migration to Ayodhya.
India’s tourism sector has been seeing steady growth through the years and Jefferies expects it to grow at an annualised rate of 8% to $443 billion by FY33. India’s market share rose by 1 percentage point in the last decade and Jefferies expects the trajectory to continue. From FY16 to FY22, India attracted over $7 billion through foreign direct investment in the hotel and tourism sector and the number is expected to grow in the coming years. “India’s G20 presidency provided an unparalleled platform to promote tourism in India with thousands of delegates visiting India traveling across the length and breadth of the country,” said Jefferies.
With Ayodhya welcoming new visitors, multiple sectors—including hotels, airlines, hospitality, FMCG, travel ancillaries, and cements—stand to benefit. While currently, the number of hotels is at 17 with 590 rooms, it is expected to increase to 73 new hotels, with 40 already under construction. This makes chains like Indian Hotels Company Ltd., ITC Hotels Ltd., EIH Ltd., and OYO Rooms the focus as they plan to build and expand in the city, Jefferies said.
While Burger King has already set up one store in the city centre, other brands like Devyani International Ltd., Restaurant Brands Asia Ltd. and Jubilant FoodWorks Ltd. are also setting up outlets. In addition, Britannia Industries Ltd., ITC Ltd., Godrej Consumers Products Ltd., Hindustan Unilever Ltd. and Sapphire Foods Ltd. will also be in focus. Expecting higher footfall in the city, IndiGo, operated by Inderglobe Aviation Ltd., announced Ayodhya as its 86th domestic destination with direct flights from Mumbai, Delhi, and Ahmedabad. Air India also began direct flights from Bengaluru, Kolkata and Delhi. SpiceJet and Akasa Air also have flights connecting Ayodhya to multiple cities.
Following a similar pattern to other pilgrimage or religious places, IRCTC Ltd., MakeMyTrip and EaseMyTrip are offering tour packages to Ayodhya.
