Many mid-size and upscale hotel companies are firming up investments and capacity expansion plans to the tune of Rs 3,500 crore in key holy towns in the next two years, according to data collated by Noesis Capital Advisors, a hotel investing and consulting firm. This translates into over 5,000 new rooms and about 25,000 jobs. Positioning the hospitality sector as a pivotal economic driver, this could bump up the per capita income of people within a 100 km radius of pilgrim centres, says Noesis.
A key factor spurring interest from hospitality players is the new infrastructure — airports, railways and roads — connecting important spiritual centres to major metros.
Hotel companies have always had an interest in crowded religious places. Now, the opening up of the Ram temple in Ayodhya could act as a catalyst, creating a ruboff effect on other pilgrim spots such as Amritsar, Katra, Tirupati, Haridwar, Ujjain, Varanasi, Shirdi, Puri, Guruvayur, Mathura and Ajmer.
Chander K Baljee, CMD of Royal Orchid & Regenta Hotels, says, “There is always a happy or a sad occasion… so demand is a constant at pilgrim centres.” Royal Orchid & Regenta Hotels is present in Amritsar, Somnath, Haridwar and Varanasi. “We are now looking at Tirupati and Katra,” says Baljee.
Growing connectivity has not only encouraged pilgrims but has also fuelled investor confidence in the hospitality sector. Consequently, hotel investment companies have started drafting feasibility reports for potential hotels to assess value, find suitable operators and facilitate financial support. “We are currently engaged in over 20 projects in holy cities,” says Nandivardhan Jain, CEO, Noesis Capital Advisors.
For Fortune Hotels, pilgrimage tourism has been a pillar of its expansion strategy in India. “We saw a huge opportunity in this space and have steadily opened hotels in attractive, spiritual locations to cater to the pilgrims who flock there,” says Samir MC, MD, Fortune Hotel, which is operating properties in Katra, Amritsar, Haridwar, Tirupati and Madurai. “We will soon enter Shirdi in Maharashtra, Ajmer, and Deoghar in Jharkhand over the next 24 months,” he adds.
“Currently, our portfolio has six pilgrimage properties, featuring a total of around 500 rooms. After the new openings, almost 20% of our operating hotel inventory will be in pilgrimcentric locations,” says Samir.
Sarovar has a bigger portfolio of 11 hotels in 10 religious destinations such as Amritsar, Tirupati, Bodh Gaya, Haridwar, Badrinath, Somnath, Pavagadh (Gujarat), Shravasti, Mathura and Ayodhya. “We will open three more hotels in Haridwar, Amritsar and Mathura in 2024. Other cities in the pipeline include Dwarka, Varanasi and Sikar (Rajasthan),” says Ajay Bakaya, MD, Sarovar Hotels, and director, Louvre Hotels India. “With a growing number of devotees travelling to these places, we want to offer a wider portfolio. So, we are working to expand,” says Bakaya.
Patu Keswani, CMD of Lemon Tree Hotels, says people who go on short visits to religious places now prefer branded hotels. “There is a major shift in purchasing power,” he says. “Earlier, the spend by a religious tourist was around `2,700 a day, which was not enough to stay in a branded hotel,” he adds. “The spending power has increased and so has the willingness to spend.
An increasing number of travellers prefer economy and midscale hotels priced between `3,000 and `7,000 a night.” The group is considering locations like Varanasi and Ayodhya.
Airports and express highways bring in the well-heeled pilgrims. Deoghar, which is known for its Baidyanath temple and Sammed Shikharji, a holy site for Jains, has had a significant influx of high-paying tourists after the inauguration of the Deoghar airport in 2022, according to Jain of Noesis.
The upcoming Delhi-AmritsarKatra expressway, which is estimated to reduce travel time, has sparked investor interest from hotel companies in Amritsar and Katra.
Marriott, a global hotel brand, is opening a 100-key Marriott Katra in April. It has also signed a 150-key hotel in Ayodhya, slated to open in 2027-28, says Abhishek Sachdev, director– hotel openings, South Asia, Marriott International.
Marriott has properties in Amritsar and Mahabalipuram, and hotels in Indore, which is close to Ujjain. It recently opened the Westin Himalayas, which is a 30-minute drive from Rishikesh. “We are getting a lot of leads from destinations like Varanasi, Tirupati, Rishikesh and Ujjain,” says Sachdev.
Meanwhile, hotel chains like Fortune, Royal Orchid and Lemon Tree are in active discussions with investors in Ayodhya.
The ease in booking, quality accommodation and accessibility are reasons why travel to these destinations has increased. The government has been promoting spiritual tourism, too, recognising its potential to boost the economy, says Sachdev.
Religious tourism is driving India’s travel recovery. The Union tourism ministry’s data shows that over 70% of tourism in India is in the religious and spiritual category. There were 1,439 million domestic tourists to religious places, which earned `1.34 lakh crore, in 2022.
After the consecration of the Ram Mandir in Ayodhya, the brokerage firm Jefferies released a report, which anticipated a notable uptick in religious tourism, fostering both economic growth and an increase in religious migration to the town. Various sectors such as hotels, airlines, hospitality, FMCG and cement are poised for a positive impact as a result of this surge in activity.
Ayodhya, says the report, is a template for India’s tourism boost. A $10 billion makeover can transform it from a sleepy town to a global religious tourist hotspot.
According to Jefferies’ report, many popular religious centres attract an annual tourist traffic of 1-3 crore despite infrastructural bottlenecks. Therefore, the reconstruction of Ayodhya, with improved connectivity and infrastructure, can create a meaningfully large economic impact, it says. According to Jefferies’ projection, tourism, which contributed $194 billion to India’s GDP in pre-Covid FY19, is expected to grow at an 8% CAGR to $443 billion by FY33. Now, India’s tourismto-GDP ratio is 6.8%, positioning the country below many major emerging and developed economies.
According to the tourism ministry, 6.64 million foreign tourists made their way to Indian pilgrimage spots in 2022. A recent E&Y report estimates that number to touch 30.5 million in 2028.
The central and state governments have been promoting religious tourism. Uttar Pradesh plans to develop Ramayana and Buddhist tourist circuits, while Uttarakhand is improving infrastructure for pilgrims.
The symbiotic relationship between infrastructure development and religious tourism is proving to be a catalyst for growth, transforming local economies. Thank god for that.
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