Ram Temple at Ayodhya Could Unlock India’s Tourism Potential: Jefferies Report
- ByStartupStory | January 23, 2024
In a recent report, global brokerage firm Jefferies highlighted the potential economic impact of the grand opening of the Ram temple at Ayodhya, stating that it could lead to the unlocking of India’s tourism potential by attracting over 50 million tourists annually.
According to Jefferies, the inauguration of the Ram temple by Prime Minister Narendra Modi on January 22nd is not only a significant religious event but also holds substantial economic implications. The firm estimates that the makeover of Ayodhya, including a new airport, revamped railway station, township, and improved road connectivity, with an investment of Rs 85,000 crore, could have a multiplier effect on economic activities such as the development of new hotels and other infrastructure.
The report emphasizes that the Ram temple’s opening could set a template for infrastructure-driven growth in the tourism sector and create a substantial economic impact. It predicts that the main pilgrimage site, spread over nearly 70 acres, will be capable of hosting about a million devotees simultaneously, with the number of pilgrims expected to increase to 1-1.5 lakh per day.
Highlighting the significance of religious tourism in India, Jefferies notes that despite existing infrastructural bottlenecks, several popular religious centers attract annual tourist traffic of 10-30 million. Therefore, the creation of a new religious tourist center like Ayodhya with improved connectivity and infrastructure is expected to have a significant economic impact.
The report also underscores the transformation of Ayodhya from a quiet town to a global religious and spiritual tourist destination. With the construction of the new Ram temple at a cost of Rs 1,800 crore, Jefferies predicts a surge in tourism and increased economic and religious migration to Ayodhya, benefiting sectors such as hotels, airlines, hospitality, FMCG, travel ancillaries, and cement.
Jefferies further mentions that tourism contributed $194 billion to India’s GDP in FY19 and is projected to grow at an 8% CAGR to $443 billion by FY33. However, it points out that India’s tourism-to-GDP ratio of 6.8% is below that of most large emerging and developed economies.
The report also highlights the strategic advantage for businesses in the hospitality and quick-service restaurant (QSR) sectors, with several chains planning to establish or already setting up outlets in Ayodhya. Additionally, airlines like Indigo, Air India, SpiceJet, and Akasa Air have announced direct flights to Ayodhya from various cities, further boosting the tourism potential of the region.
Jefferies has identified potential beneficiaries from various sectors, including Indian Hotel Company and EIH in the hotel space, and ITC, Jubilant Foodworks, Britannia Industries, Godrej Consumer, Westlife Foodworld, Hindustan Unilever, Devyani International, and Sapphire Foods in the FMCG and QSR space. InterGlobe Aviation (Indigo), SpiceJet, IRCTC, and Ease My Trip are expected to benefit from the travel sector, according to the report.
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