Skift Take
Hotel companies are betting big on the smaller towns in India. With spiritual tourism accounting for 60% of the domestic tourism, the segment is likely to drive the growth in the Indian hospitality industry for the next few years.
Spiritual tourism will help develop more tourism-related infrastructure in emerging cities in India, according to a report by real estate services firm Colliers.
In its latest report, Colliers identified 7 emerging cities, all religious hubs, where hospitality is set to drive real estate growth: Amritsar in Punjab; Ayodhya and Varanasi in Uttar Pradesh; Dwarka in Gujarat; Puri in Odisha; Shirdi in Maharashtra; and Tirupati in Andhra Pradesh.
The report highlighted that spiritual tourism is set to be a major growth driver for the development of several temple towns in India, thanks to government policy support and infrastructure developments.
The improvements in infrastructure, such as upgraded roads, flagship trains, and new airports, are expected to attract real estate investors to these spiritual destinations.
Smaller towns are emerging as dynamic contributors to India’s economy, driven by improved infrastructure, affordable real estate, skilled talent, and government initiatives, said Colliers India CEO Badal Yagnik. “Significant momentum is expected across residential, commercial, retail, hospitality, and industrial segments,” he said.
How Religious Travel Powers India’s Tourism
In the 2022-2023 financial year, the travel and tourism industry contributed about $199 billion to India’s GDP. The Colliers report revealed that spiritual tourism holds a 30% market share in the country’s travel and tourism sector and accounts for 60% of the domestic tourism market.
Data from India’s Ministry of Tourism showed that in 2022, over 1.4 billion tourists visited religious sites across the country. These places of religious tourism generated INR 1,340 billion (over $16 billion) during the year.
Destinations like Ayodhya and Varanasi in Uttar Pradesh have seen significant upgrades to better accommodate tourists. In a recent interview with Skift, Preeti Srivastava, the tourism deputy director in Uttar Pradesh, mentioned that the state’s tourism industry has been transformed following the inauguration of the Kashi-Vishwanath corridor for visitor management in Varanasi in December 2021.
Spiritual Tourism and Hospitality Development
Spiritual destinations in India have been witnessing significant investment by hotel companies. Some of these cities include:
Ayodhya
- Ayodhya is looking at an annual footfall of 23 million, and a report by brokerage firm Jeffries estimates that it could attract over 50 million tourists annually. Due to its recent development, the land value appreciation in 2024 as compared to 2019 is expected to be over 100%. However, it has a low hospitality sector presence currently, as most projects are under development.
- In January, Radisson Hotel Group opened Park Inn by Radisson in Ayodhya, with another project under development.
Indian Hotels Company (IHCL) also signed two hotels in the city under the Ginger and Vivanta brands last year, while a third one under the IHCL SeleQtions brand was signed this year.
Lemon Tree Hotels is planning a 200-key hotel in Ayodhya, while a hotel under Wyndham’s Ramada Encore brand has been signed.
Amritsar:
- According to the Colliers report, Amritsar has been witnessing an annual footfall of 30 million. This has resulted in the city having a high presence of branded hotels in the city.
- Last year, Marriott opened a Le Meridien hotel in Amritsar, while in December.
- IHG Hotels announced the signing of a new voco hotel in the city.
- Home to the holiest temple in Sikh faith — Golden Temple — the city also marked the entry of the Trademark Collection by Wyndham brand in India earlier this year.
- Accor is also set to open a Grand Mercure-branded property in the city.
Varanasi:
- Varanasi, post its upgrade, has had a significant increase in tourists. According to Srivastava, after the inauguration of the Kashi-Vishwanath corridor, a total of more than 130 million tourists visited the pilgrim city in 2022 and 2023.
- Last month, IHCL signed its fourth hotel in city under its budget brand Ginger.
- Wyndham Hotels opened a Ramada Plaza in the city last year,
- Hilton Opened DoubleTree by Hilton in Varanasi in September 2023.
Government Boost to Spiritual Tourism
The report said that the focus by the government on spiritual tourism is boosting this segment. “Given the latent potential, the segment’s market size grew from $44 billion in 2020 to about $60 billion in 2023,” it said, adding that the segment is expected to grow 9-10% annually to reach $130 billion by 2032.
Recent government schemes including Pilgrimage Rejuvenation and Spiritual Heritage Augmentation Drive (Prashad) and Swadesh Darshan 2.0 – to develop sustainable destinations – has led to an increase in tourist-friendly pilgrimage destinations.
“Various government initiatives in recent years have also uplifted the infrastructure and real estate market of select spiritually inclined tourist destinations,” the report said.
The government has replicated the upgradation of Varanasi in Ujjain, Madhya Pradesh for the Mahakaleshwar Temple, and is now looking to uplift Mathura. This has led to a more systematic tourist flow in these destinations, creating the potential for better tourist management. Madhya Pradesh tourism is considering implementing a tourist registration system to tackle overcrowding and overtourism.
There has also been a boost in aviation sector for spiritual tourism destinations as the number of airports have doubled over the past 10 years. Airports have come up in smaller cities such as Shirdi in Maharashtra and Kushinagar in Bihar for devotees.