What IHCL’s 4th Hotel in Varanasi Says About India’s Religious Tourism Boom

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Religious tourism is booming in India and hospitality companies are now catching up to cater to this demand.

Indian Hotels Company (IHCL) announced the signing of a fourth hotel in Varanasi, a 101-key Ginger hotel. It currently has two Taj Hotels and a SeleQtions hotel (as part of the Tree of Life conversion) in Varanasi, a city with deep cultural and religious significance.

On Thursday, IHCL also announced the signing of its reimagined Gateway brand in Sarnath further strengthening the hotel company’s spiritual tourism circuit.

With these two additions, IHCL will have 24 properties in the north Indian state of Uttar Pradesh, of which 11 are under development. 

Once popular for being home to the Taj Mahal in Agra, Uttar Pradesh is now looking to build itself as a religious tourism hub through cities like Prayagraj, Kashi, Ayodhaya, Varanasi and Sarnath.

The Uttar Pradesh government has launched about 500 projects with an investment of more than INR 850 billion ($10.2 billion) to develop religious and spiritual tourism spots.

Impact of Religious Tourism

The tourism industry in Uttar Pradesh has been transformed after the inauguration of the Kashi-Vishwanath corridor in Varanasi in December 2021, according to state tourism deputy director Preeti Srivastava said.

“After that, in 2022 and 2023, a total of more than 130 million tourists visited the pilgrim city. The success from this project was also implemented in other parts of the country, including Ujjain in Madhya Pradesh.”

She added that with Ayodhya now being developed as a religious destination, and Mathura next in line the tourism prospects of Uttar Pradesh are set to bolster. 

Booking.com while noting the Holi and Easter Holiday trends in March had also noted that spiritual destinations were among the most-searched. 

In January, the public opening of a controversial Hindu temple in Ayodhya saw half a million visitors on the first day.

On December 31, Oyo Group CEO Ritesh Agarwal had tweeted, “80% more users are searching for stays in Ayodhya today! Seeing one of the highest spikes.”

“If a destination like Varanasi, Ayodhya, or Mathura is developed, the tourists that visit will then spill over to other regions. Since these are one or at most two-day destinations, tourists then prefer to club more cities in Uttar Pradesh together. There are many tourists who come to Lucknow, which allows them to explore the Mughal heritage. They then go to Ayodhya, Prayagraj, and Varanasi,” she said, adding that tourists also visit smaller destinations along the way. 

Entry of Hospitality Brands

Expecting its annual tourist footfall to reach 850 million by 2028, the state is seeking to create a robust hotel supply chain, paving the way for the entry of major hospitality brands.

Accordingly it is eyeing investments to the tune of INR 320 billion ($3.8 billion) in the hospitality sector to cater to the expected increase in demand. The focus is on tourism hotspots of Varanasi, Ayodhya, Prayagraj and Agra.

Last year, Japanese hotel chain Hotel Management International (HMI) signed an agreement to develop 30 new hotels in the state. These will be located in Agra, Varanasi and Ayodhya. 

HMI public relations director Takamoto Yokoyama said, “Uttar Pradesh’s efforts to realize and develop the tourism potential have created immense possibilities for the hotel industry. Varanasi has seen a significant increase in tourism after the development of the Kashi-Vishwanath corridor. For us, this is a great chance.”

Some recent key developments in the spiritual destinations in Uttar Pradesh include:

  • Wyndham Hotels and Resorts opened a Ramada Plaza in Varanasi last year
  • ITC Hotels signed boutique hotel Storii Prayagraj in May 2023
  • IHCL and Radisson Hotels Group have expressed interest in opening five-star hotels in Prayagraj
  • Hilton Opened DoubleTree by Hilton in Varanasi in September 2023

The Ayodhya Effect

Currently, this boom is led by hotel development in Ayodhya, which was revamped recently in the run-up to the consecration ceremony of the Ram temple held in January.

The town could attract over 50 million tourists annually, according to a report by brokerage firm Jeffries.

In January, Radisson opened its Park Inn by Radisson in the city. In an interview with Skift, Radisson Hotel Group executive vice president Elie Younes said that religious cities in India are a focal point. Another Radisson hotel is coming up in Ayodhya, while it has one under development in Vrindavan in Uttar Pradesh. 

Last year, IHCL signed two hotels in Ayodhya under the Ginger and Vivanta brands. The company signed its third hotel at the destination this year, under the IHCL SeleQtions brand, and is planning a fourth property under the Taj brand. 

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