According to a report by Jefferies, a renowned global brokerage firm, the construction of the Ram Temple in Ayodhya is anticipated to bring about significant economic benefits. This iconic structure is poised to become a prominent tourist attraction in India, with the potential to draw in more than 50 million visitors annually.
Jefferies, in their report, highlights the significant religious and economic implications of Prime Minister Modi’s inauguration of the Ram temple in Ayodhya on January 22nd. The event is expected to attract a substantial number of tourists, potentially exceeding 50 million visitors annually. With a US$10 billion investment in infrastructure development, such as a new airport, renovated railway station, township, and improved road connectivity, the region is poised to experience a multiplier effect, stimulating the growth of new hotels and other economic activities. This development could serve as a model for infrastructure-driven growth in the tourism sector.
According to the global brokerage firm, tourism played a significant role in contributing $194 billion to the GDP in FY19 (pre-COVID). It is projected to experience a compound annual growth rate (CAGR) of 8%, reaching a staggering $443 billion by FY33. However, the tourism to GDP ratio in India stands at 6.8%, placing it below many of the prominent emerging and developed economies.
The brokerage firm has emphasized that religious tourism remains the dominant sector in India’s tourism industry. Despite the existing challenges in infrastructure, several popular religious destinations attract an annual influx of 10-30 million tourists. Therefore, the establishment of a new religious tourist center like Ayodhya, with improved connectivity and infrastructure, can have a significant positive impact on the economy, according to the firm.
“Religious and pilgrimage sites such as Ayodhya, the Golden Temple, Vaishno Devi, and others offer lucrative markets that provide a strategic advantage for early entrants. QSR chains like Restaurant Brands Asia (RBA), Devyani International, and Jubilant Foods are currently in talks or have already started establishing outlets in these locations. Burger King, for instance, has already opened a store in the city center during the first half of 2023,” stated Jefferies.
Indigo has recently declared Ayodhya as its 86th domestic destination, offering direct flights from Delhi, Ahmedabad, and Mumbai. Air India has also announced direct flights from Bengaluru, Kolkata, and Delhi. Additionally, Spicejet and Akasa Air have introduced flights connecting Ayodhya with various cities. Furthermore, IRCTC has unveiled tour packages to Ayodhya.
In terms of the hotel and hospitality sector, Jeeferies has revealed that IHCL, Marriott International, Wyndham, and other renowned hotel chains have already signed agreements for establishing hotels in Ayodhya. IHCL has specifically signed contracts for two new properties that are expected to be operational by 2027. ITC Hotels is also exploring opportunities in Ayodhya, while OYO plans to add 1000 hotel rooms in the city.