Mumbai: Family offices are investing in hospitality assets around major pilgrimage centres across India, from Deoghar and Mathura to Saurashtra and Udupi, opening a new frontier for the domestic hotel industry. From a Mumbai family office acquiring a nearly completed upscale hotel in Udupi to RR Kabel's investment in Salasar Balaji, family capital is flowing into branded hotels around India's biggest pilgrimage centres.
Nearly Rs 2,000 crore has been committed across key religious destinations over the past 12-18 months, according to Noesis Hotel Advisors, as some of India's wealthiest business families turn their conviction in these destinations into a hospitality investment play.
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The Udupi acquisition involves a nearly completed 137-room upscale hotel that will operate under a premium brand of Indian Hotels Company (IHCL). In Salasar Balaji, a family office is developing a 108-room property, while ITC Hotels has signed a 145-room Welcomhotel project on a six-acre site near the temple.
ET BureauIn Khatu Shyamji, Royal Orchid Hotels has signed a 120-room hotel with the Agarwal family, around 2 km from the temple.
The deals signal a shift from traditional dharamshalas and independent lodgings towards branded, professionally managed hotels. IHCL, ITC Hotels, Sarovar Hotels and Radisson are among the operators expanding across religious markets.
For Mahendra Kabra, managing director at RR Kabel, the investment in Salasar Balaji is driven by personal faith as well as commercial conviction.
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Resilience of Religious Travel
"I am a big believer in Salasar Balaji and go there every year. Instead of having a dharamshala there, I thought it would be better to invest in a hospitality asset in Salasar Balaji," he said. The hotel will be managed by Sarovar Hotels.
The appeal for investors lies in the relative resilience of religious travel. "A metro hotel lives and dies by corporate cycles; a pilgrimage hotel draws guests in good years and bad years alike," a representative of a Mumbai-based family office that recently invested in the segment said on condition of anonymity.
"Faith is India's most reliable demand generator," said Ajay Bakaya, chairman of Sarovar Hotels, an early entrant in several religious destinations. Occupancy is strong in these markets, according to him, particularly for mid-tier properties with 80-100 rooms. "A lot of family offices also see development potential in investing in properties in such religious locations," he said.
Much of the capital comes from regional trading, industrial and real estate families in Rajasthan, Madhya Pradesh, Uttar Pradesh, Karnataka and Andhra Pradesh. Individual investments range from ₹60 crore for a midscale hotel to ₹150 crore or more for an upscale asset, according to Noesis Hotel Advisors.
"This is not speculative money. These are families who have watched pilgrim footfall in their own towns double in a decade and are now converting that conviction into branded, institutional-grade assets," said Nandivardhan Jain, founder and CEO of Noesis Hotel Advisors, which has advised on some of the deals. "The capital is patient, it is local and it is backed by land the family already owns. That combination makes it one of the most stable sources of hotel equity in India today." Jain cautioned, though, that resilient demand and family-owned land do not guarantee a viable hotel. "A temple is not a feasibility study," he said.
Better roads, airports, expressways, and pilgrimage corridors are turning day-trip destinations into overnight stops, improving the economics of branded hospitality. For hotel chains looking beyond saturated urban markets, temple towns offer a growing pool of demand and relatively limited branded supply. For family offices, experts say the bet is on faith-an enduring reason to travel.