“Fir damak raha hai Ayodhya, laut raha hai bankar roshniyon ka samrajya… Ayodhya— a kingdom reborn,” Bollywood actor Amitabh Bachchan’s words in an advertisement for land developer The House of Abhinandan Lodha’s 7-star land development project ‘The Sarayu’ in the temple town may indicate the scale of investments Ayodhya attracted, but the city as a destination—both for investment and tourism—seems to have dimmed post the initial euphoria.
While the Uttar Pradesh government anticipated a daily influx of at least 100,000 pilgrims following the consecration ceremony on January 22, estimating that a minimum of 20 million individuals will visit Ayodhya in the next six months, there has been a gradual decline in the number of tourists, as per reports.
In January, Ayodhya was witnessing an average footfall of 100,000-150,000 pilgrims daily after the consecration ceremony. Later, in March, the tourism department said an average of 125,000 pilgrims were visiting the town daily = with the footfall even going up to 150,000 on Tuesdays and weekends. However, the figure kept dropping to about 100,000 daily visitors from April to May, and 60,000-80,000 in June, with e-rickshaw drivers saying they were struggling to earn even Rs 250 post the election results, compared to Rs 500-800 daily that they used to earn earlier.
While the Lok Sabha election result might indeed have a role to play in perception, the tangible challenges include land acquisition as farmers are not ready to sell their land owing to poor compensation and reluctance to be displaced. Some investors evaluating Ayodhya, such as those considering large MICE hotels with around 200 rooms and extensive banquet facilities, are cautious, points out Nikhil Shah, senior director of capital markets and investment services (hospitality) at Colliers India, because of reasons like the incomplete expressway connection from Lucknow, which remains a pivotal factor for potential investors to consider.
Barring a proposal by Tata Sons to invest Rs 650 crore towards building a museum of temples, ‘Indian Temple Museum’ (approved by the state cabinet in June), in Manjha Jamthara village in Sadar tehsil of Ayodhya, and another Rs 100 crore on developing basic infrastructure at the site, the city hasn’t attracted any fresh proposal since the opening of the temple in January. Airlines like SpiceJet have terminated direct flights to Ayodhya from as many as six cities citing demand issues.
Realty bites
Real estate company Anarock Group’s research senior vice-president Abhai Chaturvedi told FE that there has been a dip in investments in recent times because demand has stagnated post the elections. However, he felt that the dip may be more seasonal than permanent. “The excessive heat wave coupled with ongoing monsoon may have caused some decline in the number of visitors, but it is unlikely that it will continue to drop further,” he says. Colliers India also says no fresh investments have been reported, but pegged it likely due to the monsoon season.
Noting that initially there was significant interest with many hospitality brands considering hotel development in Ayodhya, investment management company Colliers India says an overall development timeline of two-three years is needed for hotels to come up. “While the interest remains, many are adopting a wait-and-see approach,” it says.
The House of Abhinandnan Lodha claims 98% of the inventory opened for sale has been sold. “With a phased RERA date of completion starting March 2027, the project is being planned for delivery ahead of schedule. The construction phase has already begun with land levelling alongside road widening,” chairman Abhinandan Lodha told FE.
“With world-class infrastructure development, the city may witness rapid urbanisation fuelling urban growth in terms of residential development, commercial, retail, hospitality and industries,” says Swapnil Anil, executive director and head of advisory services, Colliers India, estimating that around Rs 5,000-crore investment is being planned from private players which could soon be a reality in the city.
“Nearly 37 state and national agencies are collaborating to develop Ayodhya as a major pilgrimage destination with a dedicated budget of Rs 31,662 crore,” says Prashant Thakur, regional director and head of research, Anarock Group.
Hospitality huddle
Hospitality chains such as Indian Hotels Company Limited (IHCL), Marriott International, Sarovar Hotels, and Wyndham Hotels & Resorts have signed hotels in Ayodhya. IHCL’s two hotels under Vivanta and Ginger brands are expected to come up in early 2027, Suma Venkatesh, executive vice-president for real estate and development, IHCL, was quoted as saying in a media interview.
Wyndham’s Ramada Encore by Wyndham, a 72-key hotel, is set to open by late 2025, Sakshi Sehdev Dogra, head of sales and marketing, Eurasia, told FE. “We acknowledge Ayodhya’s growth potential and plan to open multiple hotels in the future to capitalise on the destination’s appeal,” she adds.
Sarovar Hotels opened an 80-room property under the brand Park Inn by Radisson Hotels last year. “We are doing more than 90% occupancy and over Rs 11,000 average room rate,” Ajay Bakaya, managing director, Sarovar Hotels, told FE, adding that they are in discussion for a second hotel project too. Travel agency EaseMyTrip has announced a Rs 100-crore five-star hotel in Ayodhya which, it says, will be finished by 2027. Budget hospitality chain OYO inaugurated 65 properties, 50 homestays, and 15 hotels in Ayodhya and claims an occupancy of 70-80%.
Mandeep S Lamba, president and CEO (South Asia) of HVS Anarock, says the hospitality sector in Ayodhya is currently offering just over 300 quality hotel keys, primarily dominated by unbranded hotels. Only only one branded hotel— Park Inn by Radisson, managed by Sarovar Hotels — opened its doors to guests recently. The House of Abhinandan Lodha has also announced plans to open a luxury hotel in the city in collaboration with The Leela Palaces, Hotels and Resorts.
“As a result, over 1,200 rooms are expected to be added to the city’s inventory between 2024 and 2030,” says Lamba of Anarock. However, connectivity to the city might hinder investors evaluating Ayodhya as a MICE destination.
Nikhil Shah, senior director of capital markets and investment services (hospitality) at Colliers India, says initially there was considerable enthusiasm and rapid development underway, but now only four to five big hotel projects are in progress. He also notes that the decrease in influx of tourists over the past few months might be due to summer and monsoon seasons, as the market experienced seasonal fluctuations. Anticipating most of the big ticket announcements to be completed by 2025 to 2027, hospitality players say some of them are in discussion stages for a few more projects.
Govt overdrive
Government officials are, however, upbeat. Commenting on the progress of infrastructure development as per its Master Plan 2031, Ayodhya commissioner Gaurav Dayal says everything is proceeding as per plan and government deadlines. Under Ayodhya’s ambitious Master Plan 2031 to transform the city over the next decade, the Uttar Pradesh government has announced an investment of around Rs 85,000 crore. The Central government, too, has committed around Rs 11,000 crore while the state government has announced to invest another Rs 30,500 crore by the end of this year.
Pramod Kumar Singh, superintending engineer, Uttar Pradesh Housing and Development Board, Ayodhya, says Rs 600 to Rs 700 crore has already been spent on land acquisition in the city.
In December last year, PM Narendra Modi laid the foundation stone of a greenfield township in Ayodhya being developed at a cost of more than Rs 2,180 crore and the Vashishtha Kunj Residential Scheme to be developed at a cost of about Rs 300 crore.
Spread over 1,407 acres, the greenfield township project is envisaged to be developed over the next five years. Aman Tyagi, executive engineer, Uttar Pradesh Housing & Development Board, Construction Division-1, Ayodhya, says most of the allotments of land parcels so far have gone to state guest houses, mutts and hotels.
Of the Rs 300 crore outlined for the Vashishtha Kunj Residential Scheme, Satyendra Singh, secretary of Ayodhya Development Authority, says Rs 35 crore has already been spent on the purchase of 75 acres. “Three hectares of land are yet to be acquired because farmers are not ready to sell them yet,” he adds.