‘Rs 85,000-cr makeover’: Ram temple at Ayodhya could attract over 50 million tourists per year, says Jefferies

Global brokerage firm Jefferies said in a report that the Ram temple at Ayodhya could lead to “unlocking of India’s tourism potential” by attracting over 50 million tourists a year.

“The grand opening of the Ram temple at Ayodhya by PM Modi on Jan 22nd, is a big religious event. It also comes with a large economic impact as India gets a new tourist spot which could attract over 50 million tourists per year. A Rs 85,000-crore makeover (new airport, revamped railway station, township, improved road connectivity etc) will likely drive a multiplier effect with new hotels & other economic activities. It can also set a template for infra driven growth for tourism,” said Jefferies in a speical note on India’s tourism potential.

The Ram temple at Ayodhya can “create a meaningfully large economic impact”, said Jefferies. Main pilgrimage site, spread over nearly 70 acres, will be equipped to host about a million devotees together. Number of pilgrims is expected to jump to 1-1.5 lakh per day, it said.

“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. And hence, the creation of a new religious tourist centre (Ayodhya) with improved connectivity and infrastructure can create a meaningfully large economic impact,” it said.

“The makeover is now set to transform the ancient city from a sleepy town to a global religious and spiritual tourist hotspot. The new Ram temple comes up at the cost of Rs 1,800 crore. Tourism is projected to surge and increased
economic and religious migration to Ayodhya, multiple sectors stand to benefit including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc,” added Jefferies.

Tourism contributed $194 billion to FY19 (pre-Covid) GDP and is expected to grow at an 8% CAGR to $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, said the global brokerage.

Religious and pilgrimage sites like Ayodhya, The Golden Temple, Vaishno Devi, etc. present significant captive markets offering strategic first-mover advantage. QSR chains such as Restaurant Brands Asia (RBA), Devyani International, Jubilant Foods are either in discussions to set up outlets or have already begun setting up outlets. Burger King has set up one store in the city centre in H1 of 2023, it said.

“Among the travel service providers, Indigo announced Ayodhya as its 86th domestic destination with direct flights from Delhi, Ahmedabad & Mumbai. Air India, announced direct flights from Bengaluru, Kolkata & Delh. Spicejet and Akasa Air also announced flights connecting Ayodhya with multiple cities. IRCTC announced tour packages to Ayodhya,” added the report.

Jefferies has picked Indian Hotel Company and EIH as the potential beneficiaries from hotel space, while it sees ITC, Jubilant Foodworks, Britannia Industries, Godrej Consumer, Westlife Foodworld, Hindustan Unilever, Devyani International and Sapphire Foods from the FMCG and QSR space. InterGlobe Aviation (Indigo), SpiceJet, IRCTC and Ease My Trip shall benefit from the travel sector, it said.

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