According to a report by international brokerage firm Jefferies, the Ram temple in Ayodhya might contribute to the "unlocking of India's tourism potential" by drawing more than 50 million visitors annually.
"The official opening of the Ram temple by Prime Minister Modi on January 22nd is a significant religious occasion. Large economic effects are also expected, as India gains a new tourism destination with the potential to draw over 50 million visitors annually. With new hotels and other economic activity, an Rs 85,000-crore makeover (new airport, redesigned railway station, township, better road connectivity, etc.) is expected to create a multiplier effect. In a special note on the possibilities for tourism in India, Jefferies stated, "It can also set a template for infra-driven growth for tourism."
According to Jefferies, the Ayodhya Ram temple has the potential to "create a meaningfully large economic impact". The main pilgrimage site, which is around 70 acres, will have enough space to accommodate a million or more worshippers at once. It stated that the number of pilgrims is anticipated to increase to 1-1.5 lakh daily.
"In India, religious tourism continues to be the largest market for travel. A number of well-known religious sites draw between 10 and 30 million tourists each year in spite of current infrastructure constraints. Therefore, the establishment of a brand-new, religious tourism hub (Ayodhya) with better infrastructure and connections has the potential to have a sizable economic impact "it stated.
"The renovation is expected to turn the historic city from a quaint village into a popular destination for religious and spiritual travellers worldwide. The construction of the new Ram temple will cost Rs 1,800 crore. Ayodhya is expected to see a spike in tourism as well as an increase in both religious and economic migration. A number of industries stand to gain from this, including cement, hotels, airlines, hospitality, FMCG, and travel-related services," Jefferies continued.
The economy in FY19 (pre-Covid) benefited $194 billion from tourism, which is projected to increase at an 8% CAGR to $443 billion by FY33. According to the worldwide brokerage, India's tourism to GDP ratio, at 6.8% of GDP, is lower than that of the majority of major emerging and industrialised economies.
Sites associated with religion and pilgrimage, such as Ayodhya, The Golden Temple, Vaishno Devi, etc., offer substantial captive markets that provide a tactical advantage to early adopters. QSR brands including Jubilant Foods, Devyani International, and Restaurant Brands Asia (RBA) are either in the process of opening stores or have already started to do so. According to the statement, Burger King opened one location in the city centre in H1 of 2023.
"Of the travel agencies, Indigo declared that Ayodhya would be its 86th domestic destination, with direct flights from Mumbai, Delhi, and Ahmedabad. Direct flights from Bengaluru, Kolkata, and Delhi have been announced by Air India. Also announced were flights from Spicejet and Akasa Air linking Ayodhya with several cities. The article further stated that IRCTC has offered travel packages to Ayodhya.
In the FMCG and QSR sectors, Jefferies views ITC, Jubilant Foodworks, Britannia Industries, Godrej Consumer, Westlife Foodworld, Hindustan Unilever, Devyani International, and Sapphire Foods as possible winners. In the hotel sector, it has identified Indian Hotel Company and EIH as potential benefactors. The travel industry will help InterGlobe Aviation (Indigo), SpiceJet, IRCTC, and Ease My Trip, according to the statement.