After the recent unveiling of the Ram Temple, Ayodhya has emerged as a notable destination for tourists. It is anticipated that between 50 and 100 hotels of various types will be established in the area over the next three to five years.
While high-ranking officials from the Hotel Association of India feel that Ayodhya should not be focused on just as a religious tourism destination, they see an opportunity for India to develop it into a cultural and spiritual centre similar to the Vatican.
Several top hotels like the Taj, Marriott, and Trident have committed major investments to open 5-star hotels in Ayodhya. So, why should online travel agencies be left behind? EaseMyTrip, one of India’s largest online travel companies, has recognised this business opportunity and is planning a 5-star hotel near Ram Mandir.
So, how will this affect the hotel and tourism sector, and how will this impact EaseMyTrip’s stock price? Let’s see.
About EaseMyTrip
EaseMyTrip, or Easy Trip Planners, is an online travel company based in India. Nishant Pitti, Prashant Pitti, and Rikant Pitti founded the company in 2008 in Delhi. It offers an online platform to book hotels, bus tickets, flights, and holiday packages, both nationally and internationally. Apart from India, it has offices in UAE, Singapore, New Zealand, and Thailand. The company also has specific websites for the UK, UAE, and Thailand. EaseMyTrip went public in March 2021 with an initial public offering.
The company offers various transportation options and solutions to satisfy the needs of individuals travelling domestically or internationally. They provide a broad portfolio of products that help transport travellers within the nation as well as to and from other places globally.
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What is the news about EaseMyTrip?
For its first venture into hospitality, EaseMyTrip is preparing to construct a five-star hotel in the city of Ayodhya. This represents the travel technology giant’s entrance into the hotel industry, demonstrating their ambition to diversify beyond online travel booking.
The Ayodhya 5-star hotel will be constructed in partnership with Jeewani Hospitality Private Limited, a subsidiary of the Jeewani Group. The company will receive an investment of up to ₹100 cr from EaseMyTrip, with a 50% stake. This will be the first venture of the Jeewani Group, which has businesses in contract manufacturing, coal trading, and animal husbandry, into the hospitality industry.
The company’s new hotel project, which will be constructed within a one-kilometre radius of the newly established Ram Mandir, recently received preliminary consent from the company’s board of directors.
EaseMyTrip’s move into the hospitality sector in Ayodhya comes as other major hospitality companies are looking to boost their presence in the holy city. OYO has launched 65 new hotel properties in Ayodhya after the inauguration of the temple to cater to the growing number of pilgrims and tourists visiting the city.
Following the announcement, EaseMyTrip’s share price jumped over 5% in early exchanges on February 12th. However, EaseMyTrip’s share price NSE ended 3.72% lower at ₹48.95.
EaseMyTrip is aiming to strengthen its presence in the travel tech sector with this latest move. It also bought majority shares of three Indian travel firms last year, namely TripShope Travel Technologies, Guideline Travels Holidays, and Dook Travels.
The company stated in a stock exchange report that the new venture will help it secure its place in the industry and serve a market worth ₹7.9 lakh crore.
What does the future hold?
The town of Ayodhya, known for Ram Mandir, is witnessing a surge in tourism and hospitality development. Many hotel chains, such as Marriott, Sarovar Hotels & Resorts, IHCL, and Wyndham Hotels & Resorts, have secured deals for new properties in the area.
Travel service MakeMyTrip has also launched a new train trip to Ayodhya. It includes live music and special temple visits. With more people wanting to stay, land and hotel costs in Ayodhya are going up. There are also 126 new tourism projects planned worth about ₹4,000 crore.
The travel and tourism industry in India has been doing exceptionally well of late, with hotels and destinations experiencing high occupancy levels and room rates. This positive trend has particularly helped religious and spiritual sites, which have seen many visitors looking to experience places of worship or retreat.
While the performance of this sector remains robust, some hotels in religious locales have gained more from the ongoing interest in spiritual tourism.
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Online travel agency industry in India
In India, the travel and tourism sectors are among the most substantial, contributing approximately US$178 billion to the nation’s GDP. Moreover, it is anticipated that by the fiscal year 2027, India’s travel market will escalate to US$125 billion.
As more sectors transition to digital platforms, the online travel industry in India is experiencing significant growth. Online travel bookings are expected to surge at a double-digit rate, surpassing the overall travel sector.
The rise of the internet and the introduction of augmented reality (AR) have swiftly revolutionised India’s online travel sector, with a growing number of Indians resorting to the internet for better travel bargains and lodging options.
The growth of the Indian online travel sector will be predominantly driven by the increasing adoption of international flight and hotel bookings provided by online portals such as Cleartrip, EaseMyTrip, MakeMyTrip, and Yatra, among others.
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Financials
Let’s see some financial metrics of EaseMyTrip:
| Metric | Value |
| Market cap | ₹8475.72 crores |
| Book value per share | ₹3.46 |
| Revenue from operations (FY 2022-23) | ₹430 crores |
| Net profit (FY 2022-23) | ₹147 crores |
| Dividend yield | 0.20% |
| ROCE | 54.57% |
| ROE | 46.86% |
Bottomline
In conclusion, while the development of Ayodhya as a cultural and spiritual centre presents significant opportunities for the hotel and tourism sector, it also brings challenges and uncertainties.
Companies like EaseMyTrip need to navigate these complexities effectively to reap the potential benefits. In the long run, the success of this venture and its impact on EaseMyTrip’s stock price would depend on factors such as the successful execution of the hotel project, the growth in tourism in Ayodhya, and the overall performance of the company.
