Wednesday, February 28, 2024

Business

EaseMyTrip plans to build 5-star hotel in Ayodhya, triggers surge in share price

IANS | February 12, 2024 02:31 PM

NEW DELHI: Travel agency EaseMyTrip has announced plans of building a luxury five-star hotel in Ayodhya near the Sri Ram Mandir which led to a surge in the company’s share price on Monday.

The company’s board of directors has approved the Rs 100 crore proposal to invest in Jeewani Hospitality Private Limited for implementing the hotel project that is expected to be located about 1 km from the Sri Ram Mandir.

The company shares rose 5.6 per cent to Rs 53.7 a piece in morning trade on the BSE.

"...we have greenlit a groundbreaking proposal to venture into the hospitality sector with the establishment of a luxurious 5-star hotel in Ayodhya, strategically located less than 1 km from the revered Shree Ram Mandir. This decision marks a significant investment milestone of up to Rs 100 crore in Jeewani Hospitality Pvt Ltd, the entity spearheading this ambitious project, " EaseMyTrip CEO and co-founder Nishant Pitti wrote on X.

The announcement led to a surge in the company’s share price on the on stock markets on Monday

Ram Mandir in Ayodhya is expected to have a big economic impact in the region as tourism is projected to surge to 5 crore visitors every year to the holy town, according to global brokerage firm Jeffries.

Ayodhya has witnessed a surge in hotel construction and development. Currently, the city has approximately 17 hotels with around 590 rooms. To meet the anticipated increase in tourist arrivals, 73 new hotels are in the pipeline, with 40 of them already under construction, as per the report.

Several renowned hotel chains and hospitality companies, including IHCL (Indian Hotels Company Limited), Marriott International, Wyndham, and OYO Rooms, are planning on creating more hotels in Ayodhya.

The hospitality projects are expected to add significant room capacity to accommodate the growing number of tourists and pilgrims visiting Ayodhya.

Jefferies has picked Indian Hotel Company and EIH as the potential beneficiaries from hotel space, while it sees ITC, Jubilant Foodworks, Britannia Industries, Godrej Consumer, Westlife Foodworld, Hindustan Unilever, Devyani International and Sapphire Foods from the FMCG and QSR space. InterGlobe Aviation (Indigo), SpiceJet, IRCTC and Ease My Trip shall benefit from the travel sector.

"A $10 billion makeover (around Rs 82, 500 crore) which includes a new airport, revamped railway station, township, improved road connectivity, etc. will likely drive a multiplier effect with new hotels and other economic activities. It can also set a template for infra-driven growth for tourism, " the Jefferies report states.

Amid increased economic and religious migration to Ayodhya, "multiple sectors stand to benefit including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc, " the report added.

"The makeover is now set to transform the ancient city from a sleepy town to a global religious and spiritual tourist hotspot. Tourism is projected to surge and increased economic and religious migration to Ayodhya, multiple sectors stand to benefit including hotels, airlines, hospitality, FMCG, travel ancillaries, cement etc, " the Jefferies report added.

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